The Difference Between HR Analytics & People Analytics

By: Ralf Bovers

Businessmen discussing difference between people analytics hr analytics

Technology, big data and analytics have become important items in the strategic decision-making toolkit. One of the reasons is that the drivers of business value have changed dramatically over the past 30 years. In the past, the business value was tangible. Think about warehouse stock, money in the bank, real estate, etc. And they were accounted for on the balance sheet. 

The business value nowadays can also be related to having a highly talented workforce that can disrupt markets and bring radical innovation. Just think about Amazon as an example. Their valuation is skyrocketing but is that because of their warehouse operations or is the real value of its talented workforce?

Companies are actively looking for good measures to capture this workforce value. There have been initiatives, such as the Embankment project, to even account for the workforce on the balance sheet as an intangible asset. Whilst companies are more aware of the value and potential of their workforce, they are searching for metrics and methods to maximize the effectiveness to optimize business outcomes. This is exactly what people analytics is about and why companies are actively exploring how to implement and embrace this. 

The main difference(s) between HR Analytics, People Analytics & Workforce Analytics. 

What is the difference between HR analytics and people analytics? From the onset, it is vital for us to clear up the misunderstandings around the terminologies HR analytics, people analytics and workforce analytics. In practice these terms have been often used interchange, however, they are not the same. HR analytics captures and measures the functioning of the HR team itself – for example, analyzing KPIs (Key Performance Indicators) such as employee turnover, time to hire, etc. Such analytics are only relevant to the HR team and they can be held accountable for. With this in mind, it is important for us to understand the limitless scope of people analytics. True people analytics aims to encompass HR, the entire workforce data and customer insights. people analytics inculcates the approach of measuring and analyzing all this information and knitting it together to improve decision making and business performance. Nevertheless, it is important to understand that workforce analytics encompasses the entire group of workers (not just full-time employees) and allows for the future inclusion of AI and robots that will potentially replace current jobs within an organization. workforce analytics, therefore, is more descriptive when it comes to making a holistic workforce strategy. 

A managerial implication: how can People Analytics be used to deliver business outcome(s). 

Deloitte (2018) reports that people analytics does not only assist organizations to comprehend the changing workplace but also provides insight to drive customer behavior and engagement. Furthermore, a recent survey by CIPD (2018) confirms that using people data leads to improved business outcomes. Nevertheless, it is important to understand that a crucial barrier to attaining people analytics is the absence of a people analytics strategy of any kind – let alone a coherent one that aligns with the business strategy. 

For the business to prosper with people analytics, it is important to have a well-thought-out strategy that focuses on what really matters to the overall business; this should ultimately align with people actions and behaviors. Therefore, people analytics should enable a business to not only measure and track progress in relation to the business strategy but also assist HR to manage the overall people strategy by prescribing future actions to ultimately reach strategic business objectives. 

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