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Andrew Woolnough


Director of HR Solutions

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Employee experience: the evolution of people analytics?


People analytics is morphing from an HR-led function to a top-down business-led function, otherwise known as employee experience, explains Andrew Woolnough, Director of HR Solutions at Equiniti.

The use of people analytics is growing as companies realise the capabilities required in terms of HR technology, tools and analytics expertise. But what started out as an HR function, focused on discrete projects to identify and address any problem areas, has now evolved to include all the various functions of a business and their associated analytics efforts.

This integration of everything that impacts people during their working lives is known as employee experience.

Why isn’t everyone doing people analytics?

Most businesses recognise they need data to help them understand what makes people join, perform well and stay with an organisation; who will likely be successful; and what is required to deliver the highest quality customer service.

People analytics – also referred to as human capital analytics – was borne some years ago out of the need to directly inform all of the above. Although slow to take off, the use of analytics in HR is growing, driven largely by the increasing adoption of cloud-based HR technology, allowing HR to look at data in a more integrated way.

Still, only 3 in 10 people use people analytics at the moment to calculate cost, ROI and the impact of rewards and benefits, according to research carried out last year by Employee Benefits, on behalf of Equiniti. Furthermore, 6 in 10 didn’t know what tool they used.

The reason why analytics has been slow to take up off might be because HR is often caught in a vicious circle: the value of analytics needs to be evidenced in order to secure necessary investment from the board, yet in order to evidence the value of analytics, investment in technology and expertise is essential.

This problem is further highlighted by the fact that 71% of CEOs say human capital is a key source of competitive advantage, according to an article in Harvard Business Review.

Yet HR often struggles to secure technology investments. In fact, ‘justification of additional spend’ is currently the main barrier to an enhanced benefits and rewards offering, with just under two thirds (59%) of HR respondents stating so in research by Employee Benefits and Equiniti.

There’s a growing understanding that a strong employee experience drives a strong customer experience as well as having a significant impact on the bottom line.

What’s more, just over 1 in 5 (21%) receive no management information around employee benefits at all at present. Of those that do, only very high-level data on benefits take-up is received, with very few including a breakdown of take-up by location, demographic, job role and salary band.

Employee experience, on the other hand, is perfectly placed to help overcome such problems by communicating the message that people are a firm’s biggest asset in terms to which the C-Suite can better relate

What is employee experience?

Simply put, employee experience refers to the collective experiences an individual employee has within an organisation – beginning from their initial perceptions of a company and their first point of contact for a job opening to the last day of their employment and beyond.

Why is employee experience important?

Progressive organisations are moving away from a narrow focus on employee engagement and culture, and breaking down the silos between HR, occupational health, risk and payroll. Instead they are focused on understanding and improving the whole employee experience.

As part of this, there’s a growing understanding that a strong employee experience drives a strong customer experience as well as having a significant impact on the bottom line.

For example, research by London startup Soma Analytics found that FTSE 100 businesses that used the words ‘mental health’ or ‘wellbeing’ more than twice in their annual reports enjoyed a mean profit of £1.4tn, three times that (at £563bn for the year) of those that didn’t use such phrases.

Employee experience is about everyday life and needs to be calculated as such.

The study pushes forward the argument that the more a company holds itself publicly accountable for the wellbeing of its employees, the more they will invest in it. This, in turn, is in investors’ interests, with sick days and lost productivity costing billions of pounds each year.

The UK government is also pushing employee experience up the agenda with its proposed reforms to corporate governance. As stated in the government’s response to the consultation (August 2017), a new set of principles are being established with the aim of strengthening the voice of employees and other non-shareholder interests at board level. These aspects are highlighted as important components of running a sustainable business.

On the subject of employee voice, it’s worth bearing in mind that brands are bestowed upon companies by employees these days, as opposed to companies shaping their own brands via marketing and advertising. And brand perception has a huge impact on recruitment and retention, not to mention customer loyalty.

How do you measure employee experience?

Employee experience is about everyday life and needs to be calculated as such. It is the sum of many different parts that pull together to create a tangible value to a company’s productivity and profitability.

People analytics provides the framework, integrating all the disparate analytics efforts within a company – employee engagement surveys, recruitment, compensation, workforce planning analysis, career development reviews and utilisation of the analytical skills of IT and marketing.

Transforming insights into real value

The data and insights obtained only form part of the solution though. The real value is in turning these insights into change that delivers business value. The hardest part of the analytics journey is engaging directly with the business and helping to directly apply the findings to real interventions or management changes.

But with a partnership working approach and honest evaluation, employee experience will soon be viewed as pivotal in today’s highly competitive, global economy.

Author Profile Picture
Andrew Woolnough

Director of HR Solutions

Read more from Andrew Woolnough