It's no longer necessary to emphasize the importance of human capital for a business's success, right? Entrepreneurs and managers already recognize how crucial it is to have an engaged team within the company, which is why the focus has been on continuously improving people management.

Currently, there are several practices to improve this management, such as the so-called “People Analytics.  The concept is simple: it's about the Human resources metrics from a company, widely used in the HR field to attract and retain talent, as well as to increase employee motivation and productivity.

In short, we are talking about a data analysis process that makes management much more strategic and is capable of transforming the way organizations deal with their employees. Keep following along and understand why.

Data and human resources

Today, business decision-making is based on the analysis of large volumes of data, thanks to technologies that allow for their storage. In human resource management, there are data analysis models that facilitate the identification, recruitment, development, and retention of the right talents for the organization's demands.

Simply put, by using People Analytics, a company demonstrates that it recognizes its workforce as its most valuable asset. And, therefore, it needs to know it very well!

New data information systems facilitate the standardization of data related to business operations and employee performance and competencies.

With standardized data on employee performance, project progress, business operations, and team competencies available to human resources managers, team leaders can use this information to link talent management to professional performance. This allows for an understanding of what makes people happy and engaged in their roles.

Furthermore, the process of analyzing data about the human resources available in the organization enables the company to identify patterns that are not obvious from the cross-referencing of different types of data, pointing to the causes of problems that need to be mitigated or eliminated within a company.

It is possible, for example, to correlate performance data with the demographics, age, or education of employees, revealing the best profile for performing a certain role and generating better results.

How People Analytics can be useful

The highlight is its usefulness in decision-making related to hiring and layoffs, also in the development of career and succession plans, training programs, and variable compensation policies.

This is because, based on data analysis, decisions are less partial and subjective, as they are based on statistics, facts, and previously established parameters.

As well as helping to choose the most suitable professional, this process also favors talent retention, as the analyses point to adjustments needed in human capital management practices.

The use of People Analytics also facilitates the formation of multidisciplinary teams and an adequate distribution of tasks. Finally, another advantage is the possibility of evaluating the performance of managers and candidates for leadership positions, aiming at the improvement of technical, behavioral, and managerial skills.

See also: 9Box Matrix: how to identify leaders?

How to start?

Your company can begin implementing a “People Analytics” culture by collecting data from your company's management software, social media, performance reviews, among others. With this data, it is possible to identify behavioral patterns by observing what makes certain employees more productive and motivated and others not. The idea is to seek commonalities. For example, does area X have very efficient employees? It's worth checking if the manager is well-evaluated, if everyone has clarity on their goals and the reasons for their activities, if the compensation is in line with the market, if interpersonal relationships are good, among many other factors.

Based on the data, the manager can also see who on the team has low engagement and even why the company has high employee turnover.

More productivity and motivation

As we've already discussed, when HR uses employee-related metrics, they can hire the best professionals and plan more effective training, according to individual strengths and weaknesses, resulting in a more motivated and productive team.

If internal policies also undergo transformations and begin to meet employee aspirations, this interferes with their engagement and commitment, resulting in a high-performing team.

Data analysis allows for the identification of reasons impacting talent retention, and then the organization can take steps to resolve issues and improve engagement.

In performance analysis, the application of People Analytics reveals data not perceived in a more superficial evaluation. From there, it's possible to promote changes in employee relationships and appreciation, which increases their performance rates, as employees who feel comfortable and valued tend to produce more and better.

Performance appraisals and organizational climate surveys are often frowned upon by employees, because the results are not always used to improve something in the workplace.

With People Analytics, information gathering is more precise and provides more material for significant changes that affect the company culture and employees. The consequence of this is an increase in the motivation and involvement of the entire team.

And so, does your company already use the concept of People Analytics? What advantages are already being perceived? Share your experience with us in the comments section!