June 13, 2018
Organisations with a strong people analytics culture are much more likely to report strong business performance claims new global research from the CIPD in association with Workday. However, the survey also highlights that the wide scale adoption of people analytics practice is still low and that more needs to be done to improve skills and confidence in the HR function, particularly in the UK which is lagging behind other markets in both capability and confidence. The research also highlights the importance of access to data. It found that access to people data improves outcomes but only 71 percent of HR professionals have access to this data, and just 42 percent of finance professionals do. For those with access to people data, just 22 percent use it daily in their decision-making and almost a quarter (23 percent) use it in decision-making just once a month or less. The research, People Analytics: driving business performance with people data, surveyed 3,852 business professionals globally – including HR and finance professionals – to understand attitudes towards people analytics and how it is being used in organisations.
It found that:
People analytics is far from being business as usual:
- Just over half (54 percent) of global respondents stated that they had access to people data and analytics
- Two-fifths (39 percent) have no access to people data for decision-making purposes
- Just half (52 percent) of HR professionals stated that their organisation uses people data to tackle business problems
- Just 42 percent of finance professionals have access to their workforce’s people data, despite the relationship between access to workforce data and strong business outcomes
However, when people analytics is used, it is adding value to organisations
- 75 percent of HR professionals globally who are using people data are using it to tackle workforce performance and productivity issues
- 65 percent of those who said that they work in an organisation with a strong people analytics culture said that their business performance was strong when compared to other competitors, but only 32 percent of those in organisations with a weak analytics culture report strong business performance
- Using people data was shown to predict the effectiveness of tackling key organisational challenges, such as workforce performance and productivity, showing that using people data leads to good business outcomes
There are clear regional differences – the UK is lagging far behind other markets in data analytics capability and confidence:
- Just 21 percent of UK HR professionals are confident conducting advanced analytics compared to 46 percent of HR professionals in South-East Asia
- Two-thirds (67 percent) of HR respondents in South-East Asia and 60 percent in the Middle East and North Africa (MENA) agree they have a standardised approach to using people data in projects compared to 50 percent of US respondents and just 42 percent of UK respondents
- South-East Asia is also leading the way in using AI and/or machine based learning to compile data reports. Almost half (45 percent) of HR professionals in South-East Asia are applying it in this way compared to 36 percent of respondents in MENA, 20 percent of respondents in the USA and just 13 percent of UK respondents
Global confidence in HR capability is low:
- Just 40 percent of global respondents said that their HR team was able to tackle business issues using analytics data
- Only 53 percent of HR professionals globally think their HR team has demonstrable numerical and statistical skills and just 36 percent of finance professionals agree
- Only 35 percent of non-HR professionals think their HR team are experts at using people data.
Edward Houghton, Human Capital and Governance adviser for the CIPD said: “It’s hugely encouraging to see that the use of people analytics in organisations is leading to positive outcomes. The more access HR and non-HR professionals have to people data, the higher they rate their organisation’s performance. However, there are still clear challenges in terms of access to data and the confidence and capabilities in the HR function needed to get the best results from it, particularly in the UK.
“We need to see greater investment in the skills needed to understand people data and we need to encourage the use of people analytics across different functions in organisations, and in finance in particular. HR must lead the development of cultures that share a ‘common language’ when it comes to people data and a shared understanding and appreciation of the positive impact people data can have on business outcomes.”
The CIPD and Workday make the following recommendations for HR practice:
- Build people analytics skills and confidence into the profession: Low skills and low confidence have a clear impact on business outcomes. There needs to be greater investment in people analytics skills but HR professionals also need to build it into their daily decision-making in order to grow in confidence and capability.
- Build strong, cross–functional relationships to improve the impact of people analytics: There are clear differences in the perspectives of HR and finance professionals, and other professionals using people data. Non-HR functions need encouragement to increase the use of people data in their decision-making and HR has a role to play in generating trusted, relevant people data to serve wider business needs.
- Make better use of people data to understand business risks: People data can provide a unique way to understand value creation and risk within organisations.