HR Analytics Use Is Growing, But Lags In Benefits, Engagement

Turn on Netflix and it’ll recommend the next set of binge worthy shows, personalized to you based on your viewing activity. This is mainstream data analytics benefitting consumers, and it’s positively impacting us as employees too – it’s just that these benefits are less well-known.

Technology has transformed every industry by enabling and empowering organizations to think and act strategically. And HR is no different. During a time of digital disruption, HR professionals are able to utilize technology and people data to gain a competitive edge by engaging, upskilling, or even improving workforce wellbeing to help employees work more efficiently and proactively.

While technology has played a pivotal role in enabling the HR function to achieve more than ever before, without the data to support their strategy HR professionals are often not as effective as they could be. Our recent research found a huge rise in organizations building out people analytics teams as HR takes on a larger role in business performance. The use of people data is a growing effort that is helping HR make better decisions that drive a more effective people strategy.

Organizations lag on data use

Despite people analytics teams having expanded by 53% in three years, many organizations are still lagging behind when it comes to truly utilizing and understanding the power behind their data.

Our report found that 15% of organizations in the US are still not reporting on employee insights, meaning they lack critical insights that could help them keep track of worker performance and the effectiveness of benefits programs. However, there are some organizations like Zerox that are using data analysis to help retain employees and lower attrition rates.

Organizations spend heavily on employee benefits, with most spending upwards of 15% of employees’ base salaries, so it’s crucial for these organizations to analyze their spend to know what’s effective. Without data analytics, there’s the potential for wasting resources. However, by using data to spend more effectively on benefits, HR departments are able to reinvest more resources back into their employee base.

Sentiment analysis

Many organizations understand the benefits of using employee data, yet a large proportion are missing the mark when it comes to translating this to support initiatives. For example, employee wellbeing is a high priority for organizations, yet our survey shows just 46% are collecting data from employees on their wellbeing and using it to inform decisions.

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Employee sentiment is another key area that is measured by less than half (44%) of organizations. Measuring employee sentiment can provide powerful insights to how employees are feeling toward their benefits, culture, and management.

Organizations collecting and using employee data are likely to see a huge impact on employee engagement as they start to make better, smarter decisions creating a benefits strategy that will make a real difference to their people.

We know that employee sentiment lags behind all other areas of measurement we explored in our research. But in contrast, when organizations measure employee sentiment, they outperform or meet their annual engagement scores in 92% of the cases. This number is impressively high, showcasing the power behind collecting these metrics.

The future of people analytics is bright with an abundance of untapped data. Up until recently, HR was missing out on the use of people data, searching in the dark for ways to gain insights into their employees and the organization as a whole. With new HR technology, organizations now have the ability to harness data to inform strategic decision making that benefits the entire organization. People analytics is rising in significance – organizations must get to grips with it if they want to strengthen their decision making to help them compete more effectively.

Matt Jackson is the VP of Proposition and Client Solutions at Thomsons Online Benefits where he is responsible for the evolution of its Mercer Marsh Benefits powered by Darwin value proposition. While at Thomsons Online Benefits, he has previously served as Partner Account Director and EMEA account manager.

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