People analytics has emerged in the last few years as an area of increasing importance and focus. It’s driven by organizations’ need to understand their most significant asset—their talent—and, by extension, their culture.  Data around hiring, retention, performance, and engagement provides valuable insights to diagnose success and improvement areas.

People analytics is one of the most powerful tools that an organization has to continue developing and positioning itself as a top place to work. Having a great company culture positively impacts employer brand and employees’ perception of the organization. When leadership is aligned, employees perform, and you’re attracting the talent you need, it provides a solid competitive advantage. Being able to identify how to get there is step one of the process. 

When using people analytics to improve culture, start with the business questions and then ask yourself,  “What metrics should I be tracking and analyzing?” By digging into four areas—hiring, retention, performance, and engagement—you’ll have a  solid foundation of data to build or improve your company culture. Below we’ve outlined the benefits of these areas of people analytics to continue improving your company culture.

1.Hiring analytics

Hiring analytics help organizations make better recruitment decisions. The benefits of recruitment analytics include recruitment performance, identifying top-performing pipelines and applicants, and understanding future recruiting trends.

• Predicting the right candidate: Recruiters and hiring managers can use data to find the ideal employee right from the start. Using recruitment systems that support behavioral interviews and help measure cultural fit, managers can make more strategic decisions that will ultimately help them build stronger teams.
• Better sourcing: Sourcing is one of the most time-consuming parts of recruiting. Improved analytics around sourcing can help recruiters streamline how they target candidates, leaving them to focus on areas that will bring more value.
• Future trends in recruitment analytics: Another goal of recruiting teams and hiring managers is to stay on top of the latest recruiting trends. By improving analytics, teams can make faster and more agile decisions, leading them to stay ahead of the game and adjust their strategy as needed for better efficiency and outcomes.

2.Retention analytics

Voluntary turnover costs organizations millions of dollars every year in additional hiring, onboarding, and training. Retention analytics can help organizations pinpoint the ‘why’ behind people leaving, which vary from place to place. There is no one size fits all solution to improve retention, so these analytics provide more insight on key areas of focus and strategy.

• Reducing turnover hassle: Employee turnover is a natural, sometimes even necessary, part of the employee lifecycle. However, it starts to become problematic when it becomes excessive. By analyzing employee retention, you’ll find out if these were desirable terminations that make room for stronger employees or if there’s an underlying problem that needs to be addressed before more people jump ship.
• Reduce acquisition and training time: It takes time and money to get a new employee up to speed. Anytime an employee leaves a company, hiring managers and recruiters spend precious time reviewing job descriptions and compensation while matching them to the ideal sourcing pipelines. On average, it takes anywhere from 90-200% of an employee’s salary to find a replacement.
• Improving overall productivity: Constant turnover comes with several issues, the main one being decreased productivity and engagement. Understaffing means that employees are taking on more than they can handle, which might mean delays, errors, overtime, or more frequent mistakes. It also takes time for new people to form good working relationships with their teammates, leading to delayed productivity as they build trust.

3.Performance analytics

Measuring employee performance can be tricky, but it’s crucial to gain information on how to develop and retain your employees. Performance analytics help diagnose potential issues before they even begin and keep people aligned with company strategy.

• Measuring goal progress and alignment: Company leaders always want to know that their teams are working on business priorities. By tracking and reporting on goals, managers of all levels can have more insight into the day-to-day and high-level work that their employees are working on and adjust directions as needed.
• Improving career development: Career development is a top priority for most employees and one of the main reasons they stay at a company. Measuring the quality and effectiveness of career development at your organization can also provide insight into general performance and engagement.
• Leadership potential assessment:  Promoting people just because they’ve done an excellent job in their current role does not always tell us if they’ll be a good leader. By measuring leadership potential, you’re making a conscious effort to improve managers’ quality at the organization, which translates to improved performance. Alternatively, understanding the common traits of good managers and leaders can help you develop cohesive manager training to get everyone to the same page.

4.Employee engagement analytics

Employee engagement is crucial to attract and retain talent and remain competitive in the global market. Research also shows a direct link between employee engagement and company performance.

• Engagement: Measuring engagement as a whole can provide you with a great starting point to uncover underlying issues. Low engagement can signify many things, including bad managers, poor work-life balance, a lack of transparency, or siloed communication that prevents collaboration.
• Recognition: Employee recognition is a key part of effective management.  Manager recognition for high-quality work improves retention and encourages high performance. By measuring this metric, you can emphasize the importance of having a culture where good work is rewarded.
• Relationships with managers: The employee-manager relationship is at the center of productivity and engagement. Good managers can completely transform your organization by supporting employee development and implementing solid strategies, whereas poor managers can tear apart the most carefully planned teams. Getting feedback on management provides organizations with an important data point to develop manager training or recognition plans.

Having a great company culture brings a strong competitive advantage. Therefore, it’s only logical to use people analytics to help drive your company forward in performance, engagement, and culture. “What gets measured gets managed,”  meaning that as you collect data on these items, you’ll be better prepared to make improvements.