Companies that share people data with business unit leaders across their organization stand a better chance of making effective decisions to change work processes and unleash employee productivity.
That's the conclusion of a recent report titled Sharing People Data Outside HR to Drive Business Value, published by Harvard Business Review Analytic Services and sponsored by Visier, a people analytics software company in Vancouver, British Columbia, Canada.
In addition to interviews with subject matter experts, human resource executives, academics and consultants, the report relied on a survey of 80 respondents, mainly knowledge workers, from 62 organizations with more than 2,000 employees. The companies are customers of Visier, which conducted the poll in June and July of 2021.
Forty-three percent of respondents described their company as "advanced" users of people analytics—those who use employee data beyond simple reports and metrics and are strategic about using the data to boost competitive advantage financially.
Examples are cloud-based people analytics platforms equipped with application programming interface software to connect to large data sources, visual tools that illustrate data trends, and artificial intelligence and other software that can track workplace behaviors and employee sentiment data.
By contrast, 58 percent described themselves as "emerging" users of people data. They noted that they use employee data displayed on paper-based or spreadsheet-based formats that are nonstandardized and are transaction-, report- or dashboard-focused.
The report notes that 54 percent of advanced users said they use people analytics to achieve value in business outcomes, such as increasing revenue, improving margins and improving customer satisfaction, compared with just 11 percent of emerging users.
"Trying to run your business without good access to the insights you have about your people is like flying with one arm," said Ian Cook, vice president, people analytics at Visier.
Cook added that changes spurred on by the pandemic such as remote and hybrid work, the Great Resignation, an increasing focus on employees' mental health, skills shortages and employee retention efforts have elevated the people analytics agenda. However, understanding the employee through the lens of people data takes a level of sophistication.
Alex Clemente, managing director of Harvard Business Review Analytic Services, put it this way: "Companies that unlock their people data and share it with non-HR managers actually perform much better and are able to improve business processes and performance, as well as retain staff and attract new talent."
Sharing employee data with other business unit leaders can raise the HR manager's role to a new level of importance.
"Everywhere where HR business partners use people data elevates HR managers' relevance, it elevates their credibility, it changes the conversation and it positions them as the strategic advisor that they have always been striving to be," Cook said.
Advanced users of people data are also armed with the ability to make better decisions during the flow of work.
The survey showed that 62 percent of advanced users were able to empower their non-HR business leaders, such as financial, marketing, sales and operations managers, with the capabilities of choosing interventions or action steps, influencing decisions, and consulting on strategy, compared with only 39 percent of emerging users who said they could do the same.
Additionally, 21 percent of advanced users can build hypotheses and tell stories from the data, which emerging users haven't been able to do, the report states.
"A successful people analytics project requires figuring out what is the right data to share, who is the right audience and how to communicate a story to them," said Matthew Hamilton, vice president, people analytics and HRIS at Birmingham, Ala.- based Protective Life Insurance Company.
Last year Protective Life, an insurance services company, began analyzing people data to drive insights into the correlation between paid-time-off usage and employee retention.
Another example is The LEGO Group, a Danish toy producer based in Billund, Denmark. The company allows non-HR managers to access pulse surveys that measure employee sentiment and engagement. The company also uses their people analytics platform to gain insights and take action on diversity and inclusion measures.
The report provides several recommendations to support HR executives who want to distribute people data to non-HR managers in an effort to achieve business value:
*To tie employee-related activity to strategy and evidence that shows there is a return on investment in people data-driven decision-making, HR must combine people data with data from the finance department.
*HR managers must articulate a vision for effective use of people data, establish a thoughtful rollout process and ensure non-HR leaders have access to the data they need to understand the value of actionable insights.
*Providing data to non-HR business partners must be done with guardrails in place. Employee-related data should be anonymized in cases where, for example, an employee feels there will be retribution if they criticize a manager. Aggregating and anonymizing data is an important part of sharing people data.
*Having clear policies that broadcast to workers how data is collected and used is another best practice for leveraging people data successfully.
*A vision of a data-driven culture must be defined and supported by HR and business executives. Additionally, a center of excellence to support the widespread use of people analytics should be established.
Nicole Lewis is a freelance journalist based in Miami.