HR Analytics vs. People Analytics: What’s the Difference?

Whether it is for the improvement of marketing, sales, or the customer experience, gaining actionable insights from data is becoming a necessity for those that want to stay ahead of the competition and get the most out of their resources. However, when it comes to HR and people operations, data-driven decisions have been traditionally underutilized by organizations.

This is mostly due to the fact that the traditional approach to HR analytics has been limited to measuring basic metrics such as average tenure, employee turnover rate, and performance ratings, but this didn’t provide the insight needed to make informed decisions about their people operations.

As a result, a much more comprehensive approach to collecting and analyzing data across human resourcing operations was needed. This is where HR and people analytics comes into play.

The Importance of Gaining Insights into the Workforce

At their core, both HR analytics and people analytics are focused on using data to understand the workforce. Using the insights derived from such analysis, organizations are able to make more informed decisions about their people operations, from recruitment and hiring to performance management and succession planning.

Not only that, but companies are able to better engage and motivate employees and foster a more productive and positive work environment. In a time where top talent is increasingly hard to find, having the right data-driven tools and approaches in place is essential for staying competitive.

However, the terms HR and people ana­lytics are often used interchangeably, and while they have a lot in common they do also have some key differences that are worth noting.

What is HR Analytics?

HR analytics is the process of using data and predictive analytics to better understand and improve human resourcing operations across an organization. In other words, it’s the practice of using data to gain insights into how things like time-to-hire and retention rates affect the overall effectiveness and efficiency of HR performance.

As such, HR analytics is typically most concerned with measuring and monitoring existing HR operations in order to identify areas for improvement rather than extrapolating trends or predicting future behaviors across the bigger business picture. Thus, properly implemented HR analytics should result in improved decision-making within HR departments while providing the information needed to better optimize and align HR operations with the organization’s overall goals.

In many ways, HR analytics paints the picture with a broad brush, providing a basic overview of how HR is performing and where it should focus its efforts.

What is People Analytics?

People analytics, on the other hand, has a more specific approach to data-driven decision-making. It’s focused on identifying, understanding, and studying all people-based processes, functions, challenges, and opportunities. This includes all stakeholders in the business, from customers to employees and beyond.

The goal of people analytics is not just to understand the present, but also to use data to predict the future and uncover potential areas for improvement. And, instead of just providing a top-level overview of the HR landscape, it digs deeper into the data, focusing on specific metrics and correlations in order to provide a more detailed understanding of the workforce.

How to implement HR/people analytics

No matter what approach you take to HR/people analytics, the overall implementation process is largely the same. It begins with collecting and organizing data from existing HR systems and processes. This includes everything from employee performance reviews to recruitment data and more.

Typically, you will need to automate the data collection process using tools such as compensation management software, employee management systems, and applicant tracking systems. After all, the data needs to be organized and easily accessible in order to make sense of it.

Once the data is collected, you can begin running analytics to uncover insights and trends. This typically involves using data visualization tools such as dashboards and reports in order to gain an understanding of the workforce, identify areas for improvement, and make more informed decisions about HR operations.

Things to Keep in Mind When Implementing HR/People Analytics

When implementing HR/people analytics, there are a few things to keep in mind.

First, make sure you have the right data at your fingertips. It’s important to have access to data from all parts of the business, including customer data and market trends. This will help ensure that you are able to make more accurate predictions and uncover deeper insights.

Second, keep in mind the goal of the analytics program. This means that you need to develop a hypothesis and determine the metrics that you need to measure in order to reach your goals. For example, if your goal is to reduce time-to-hire, you need to measure metrics such as the number of applications received and the time it takes to evaluate them.

Finally, make sure to use the insights you uncover. With HR/people analytics, it’s not enough to just identify trends and potential areas for improvement. You need to actually put this data to use by making changes and improving operations within your organization.

Remember, insights without action are meaningless. So, use the insights you uncover to develop strategies and plans that will help your organization succeed.

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