The more CHROs focus on the customer journey relevant to them, the more we see a shift in the focus of people analytics.

There is still a focus on HR topics such as acquisition & recruiting, personnel development and employee retention. At the same time, we are seeing a second, rapidly growing strategy focus on culture & risk, employee experience, and – depending on the core HR strategy – strategic workforce planning.

What fields of action and questions are currently at the forefront of these topics?
How are companies currently implementing the topics – exemplary use cases?
What new approaches are currently being developed in these topics?

HR Focus Areas

I would like to start with the “classics” in the topic of people analytics.

Acquisition & Recruiting

Fields of action and key questions:

  • Which recruiting channel delivers the best return on investment?
  • Which recruiting channels are most successful?
  • What makes the company attractive as an employer to certain target groups?
  • How is the employer brand perceived?
  • Which candidate best fits the desired skills, the job, the team and the company?
  • What features of the job posting are likely to attract the talent you are looking for?
  • Which candidate is most likely to demonstrate excellent performance once hired?

Implementation – exemplary use cases:

  • Adolf Würth GmbH & Co. KG, Heidelberg Cement AG and several others regularly conduct touchpoint surveys among school students – from initial contact to onboarding as trainees or dual students. The companies thus gain insights into the above-mentioned key questions and improve both the effectiveness and efficiency of relevant processes.
  • HelloFresh Deutschland SE & Co. KG goes even further in the process and determines, on the basis of anonymized employee data, which influencing factors are decisive for an employee to show sustained excellent performance. These factors are given particularly high weighting in the recruiting process.

New approaches:

  • Artificial intelligence can be used in several places in recruiting: from job advertisements, chatbots and applicant selection to job interviews.
  • Frequently, the (partially) automated analysis of CVs is also currently being considered.
  • Along the IMPACT Cycle and with the help of statistical methods, it is possible to identify suitable applicants more quickly and to assign recruiters to higher-value tasks.
  • Natural Language Processing (NLP) is a fast growing area – also along the HR value chain.

Personnel Development

Action areas and guiding questions:

  • What impact does an onboarding program have on early turnover?
  • What career paths are most likely for our talent based on their current skills?
  • Which employees will make good leaders and who should be promoted?
  • What training and development practices drive employee engagement and job performance?
  • How can we ensure effective succession planning?

Implementation – Example Use Cases:

  • Standard Chartered Bank addressed the key skills of a people analytics leader: strong business acumen, a consultative approach to understanding business issues, and highly developed communication skills.
  • A1 Telekom’s “AI Meets Learning” project has focused on developing customized learning offerings, among other things. A proprietary AI algorithm was used to perform matching to the employee profile, and also to suggest individual development opportunities. As a result, skill gaps were identified and development opportunities were highlighted and created based on new requirement profiles.

New approaches:

  • In the wake of skills shortages and digitalization, some skills are crystallizing as strategically necessary. In addition, employees need to acquire a digital mindset – a set of attitudes and behaviors that enable people and organizations to recognize how data, algorithms and AI open up new opportunities and chart a path to success in an increasingly technological world.
  • Digital learning formats have been growing rapidly, and not just since the Corona pandemic. They can be used on demand and are cost- and resource-efficient. However, in order to evaluate the impact of these learning offerings, valid metrics and reference values are necessary, which often have to be established or developed first.
  • The Predictive Learning Impact Model by Nick Bontis should form the basis.

Employee Retention

Action areas and guiding questions:

  • Who is most likely to quit and why?
  • What actions can managers and companies take to increase the likelihood that employees will stay?
  • Which key employees are at risk of leaving, when and why?
  • What is the likelihood that a regrettable leaver will be rehired in the near future?
  • What impact does the employee wellness program and health have on employee retention and performance?

Implementation – example use cases:

  • Nielsen was consistently losing valuable employees in key business areas and functions. In investigating the attrition problem, the people analytics team identified two specific groups of employees it suspected were high risk and tested those suspicions against two hypotheses. As a result, the voluntary turnover rate dropped to half of the rate experienced during the same period the previous year.
  • Westpac tested hypotheses that challenged anecdotes, myths, and beliefs related to employee well-being: (1) work flexibility is associated with well-being, (2) employees with higher team volatility are more likely to experience stress. The statistical models showed that stress events were indeed predictable based on the observed behaviors.

New approaches:

  • According to Gianni Giacomelli, analysis of network strength in terms of emotional support and ability to make a difference is a reliable predictor of turnover risk. Two reasons are worth highlighting: (1) Do you feel like you are part of a (good) group? Do your strong and weak network connections give you a sense of emotional support, “group flow,” and functional help? (2) Are you able to make a difference – and something that is recognized and rewarded?

Business Focus Areas

Now for the “shooting stars” in the topic of People Analytics.

Culture & Risk

Action areas and guiding questions:

  • Why is culture important, what does culture mean, and how can you change culture?
  • Is teamwork over? Is there a need for “co-acting groups” – loose associations of employees in the course of a project?
  • How can uncertainties be managed and burnout avoided?

Implementation – exemplary use cases:

  • The task at Merck KGaA was to create a data-driven culture in HR. Along a culture pyramid, the added value of the new culture was first demonstrated. In addition, investments were made in training and further education with a view to nine core competencies. In addition, tools and measures were put in place to establish people analytics across the breadth of HR. Finally, trust was built in an evidence-based approach and mindset change was promoted.

New approaches:

Employee Experience

Action items and guiding questions:

  • What are the moods and needs of our employees, especially in times of crisis?
  • How do employees react to our strategy and communication?

Implementation – exemplary use cases:

  • ABN AMRO’s strategy places the employee experience at the heart of its corporate and HR strategy. The dual emphasis on transforming employee and customer experiences and linking them under the motto “Happy People, Happy Customers” has proven to be an important milestone for the bank. The “listening” approach to this is an evolving area for the people analytics team. Advanced text mining is used in this effort.

New approaches:

  • According to surveys by Insight222, 45 percent of companies surveyed believe people analytics adds the most value in the area of employee engagement & listening. Dirk Petersen has taken an in-depth look at this.
  • Dave Ulrich has developed a concept for mental health. This concept about the why, what and how of promoting mental health leads to a better employee experience and better business results. An audit developed by Dave could be conducted to identify where to focus and track progress.
  • The EX factor: Serena Huang draws on research from McKinsey to highlight three ways people analytics can help leverage the employee experience as a key differentiator for talent retention.
  • TI people has developed EXI (Employee Experience Intelligence), an index that shows whether employee experiences at key touchpoints in an employment relationship deviate positively or negatively from the benchmark. Employee survey results are available in an intuitive dashboard that makes it easy to find, prioritize and leverage first-hand experience data.

Strategic Workforce Planning

Action items and guiding questions:

  • Plan for future talent needs
  • Do we have the talent we need today?
  • What talents and skills will we need in 24, 36 or 60 months?

Implementation – exemplary use cases:

  • Together with Joachim Volpert, I published an article on the digitalization of strategic workforce planning in “Digital HR” in 2021. The practical part of this article relates to MVV Energie AG.
  • I presented examples of competence-based HR planning in a blog post entitled “Competence wins”. In it, I discuss projects at ABB AG, Deutsche Bahn AG, E.ON Energie Deutschland GmbH and ENTEGA AG.
  • ING-DiBa AG is transforming itself into a bank focused on skills and competencies. Data analysis helps to understand the employees’ skills portfolio and offer specific learning paths. Benchmarking against skills in demand in the market can help HRBPs find the right talent for the right positions.

New approaches:

  • Four McKinsey authors looked at the ten new realities for finding, keeping, and developing talent and developed a workforce planning prioritization grid for identifying roles to build, buy or partner with. This is based on a study by The Conference Board, Buy, Build, Borrow, or None of the Above? New Options for Closing Global Talent Gaps.
  • According to a study by PwC, four forces drive HR strategy: specialization, scarcity, rivalry, and humanity. Companies across industries are managing the interplay of these four forces to support the creation of a future-ready workforce. The link between corporate and workforce strategy is strategic workforce planning.
  • The “Future of the Workforce” study conducted by MIT Sloan Management Review and Deloitte focuses on orchestrating workforce ecosystems. Such systems – sometimes also discussed under the term Total Workforce Management – are characterized by several features and require the integration of several functional areas.

Conclusion

People analytics is quickly becoming one of the most important areas of HR. In previous posts, I’ve focused primarily on people analytics basics, how to get started, necessary skills, and the culture required to support it.
This article gives a personal, certainly not complete, overview along currently essential focus areas.

Despite the obvious usefulness of the fields of action and initial implementation successes, the current level of implementation is low. However, according to current challenges (demographics, shortage of skilled workers, evidence-based HR, etc.) and our own observations, it can be assumed that the relevance of people analytics will increase significantly.

Major hurdles are still the sometimes missing competencies in psychometric methods and empirical social sciences, concerns about resistance within the workforce and insufficient data quality.
The biggest impact of people analytics is expected in strategic workforce planning and recruiting.