Why People Analytics is Key to Solving CEOs' Most Critical Business Issues: New Report
Stacia Garr of RedThread Research reveals why C-suite leaders who embrace people analytics outpace competitors who haven’t unlocked this superpower.
People analytics can unlock millions, if not billions, in business outcomes if used effectively by C-suite leadership, says Stacia Garr in a new report published by RedThread Research.
In a new report co-authored by Stacia Garr, Unlocking the C-Suite’s Hidden Superpower: People Analytics, the analyst turns a keen eye to top C-suite decision-making pain points within the context of longer-term, significant trends such as diversity and population shifts, a focus on machine learning and artificial intelligence, and an increased demand for more stringent reporting on human capital metrics. Stacia sat down with us to answer a few questions about the surprising findings and why the need for people analytics at the top level when making key business decisions is key.
Stacia Garr, Co-Founder and Principal Analyst with RedThread Research, was a co-author of the new report, Unlocking the C-Suite’s Hidden Superpower: People Analytics
Hi, Stacia! What inspired you to research this “hidden superpower?”
We saw a statistic that showed that more than 90% of C-suite leaders thought that HR had made a meaningful contribution during the pandemic, but 85% of them said they didn’t expect that to continue after the pandemic was finished. So we thought, why are they not seeing the impact in what HR can do more broadly to drive business outcomes? We decided to look for stories to help us understand the impact that people analytics can make on business decisions at a C-suite-level.
And what was the impact you discovered?
One of our key findings was that if you use people analytics effectively, you can drive significant business outcomes in the millions and sometimes billions of dollars. People analytics cannot just live under HR and be seen as serving only HR, but rather these teams (and technologies) must be a partner to the business, and C-suite leaders in particular. People analytics leaders need to be brought into the conversation as soon as the conversation starts, especially now.
One of our key findings was that if you use people analytics effectively, you can drive significant business outcomes in the millions and sometimes billions of dollars.
During the pandemic many folks began working from home and we didn’t know how to do that. Now we’re having a large percentage of the workforce being remote or hybrid. And once again we’re going to need the insights from people analytics to understand how it’s working: Are people being able to connect as they need to? Do they feel safe in the workplace? Do they feel like they have the connections and information and everything that they need to do their best work?
A second component that is really in this moment is around diversity, equity, inclusion, and belonging (DEIB). We know that it’s incredibly important right now, and that data can help us measure and understand our progress in that area.
Is there anything from your conversations with research participants that surprised you?
What we didn’t necessarily expect was the importance of a balanced relationship between the C-suite, CHRO, and people analytics. While culture is important—and a data-driven culture is important more broadly—one of the things I heard was the importance of the personalities of C-suite leaders in setting the expectations.
We know that some of the greatest power of this data is when you combine people data with business data such as sales, finance, and customer data. But we were surprised by how often we heard HR encountered blockages within the organization.
These unexpected obstacles were a little bit of a surprise given how powerful we know the combination can be. C-suite leaders wouldn’t make a decision about the business without using finance data, and are unlikely to make that decision without using marketing data, so people analytics should be a data point that goes into all leaders’ decision making. The most important thing to know is it’s actually not just about the business’ bottom line. It’s about the top line as well.
What keeps C-level leaders hesitant to embrace people analytics?
Lacking a single source of truth. How in the world are we going to make decisions based on information that could impact millions of dollars for our company without that? There’s a lack of trust in HR’s ability to deliver on this, and that the information and insights that they provide will be accurate and should be at the level of making business decisions. Another component is speed. If the C-suite needs an answer and it takes four weeks to provide it, that’s just not going to meet the need.
What can people analytics and HR leaders do to get them on board?
Once your baseline data issue gets the credibility people analytics needs, the second step is really helping C-suite leaders understand that people analytics can do more than just reporting or just giving them basic data. The power of people analytics is answering the questions that are specific and critical to the business, and being able to quickly turn that around and provide those data-driven insights to making better decisions.
Conversely, what work do C-suite leaders need to do to inspire more data-driven leadership?
First: make that investment in data within HR, make it within finance, and encourage the connection between the two. Second: C-suite leaders are the ones who set the example by using this data and having fluency with it. It’s not enough to just tell your own people, “you go do this and I’ll look at some dashboards and it’ll be good enough.” That’s not enough.
C-suite leaders also need to invite people analytics teams in. They are obviously the most powerful leaders in the organization and it’s not like the people analytics team is going to be able to edge their way into the table. And so that means that C-Suite leaders need to say, “Hey, what’s the data on this? What’s the people data? What can we know about people that’s akin to what we know from Finance?”
So a big part of that is inviting in and setting clear expectations of what they need to know.
How can C-suite leaders use people analytics to help with the resignation wave?
One of the areas that people analytics has been able to really excel at is predicting turnover. We have a great example in the report that tells of one organization that could predict with 95% accuracy when people were going to turn over and they developed plans that they could put in place to address that. That program is 25% more effective at retaining employees and has a 100% return on investment because they are able to keep these critical employees within the organization. It’s really important for leaders to make these investments in people analytics as soon as they can, because in the middle of the great resignation is not necessarily the time to start trying to figure this out.
Great point about starting sooner than later. On that note, last question: How can leaders get started with using people analytics?
If C-suite leaders want to know what’s going to happen in 18 months from now, what they can prevent, and to use people analytics to do that, they need to start with that data foundation today. There was a really interesting statistic we saw in the IBM data that showed something like 80% of C-suite leaders thought that they were doing well by their employees during the pandemic—and only 40% of employees thought the same. Just a huge difference between the two. If you’re open to insight and new information, you’ll really be able to take that and make some positive change.
Some leaders may feel a bit overwhelmed. But I want to make clear to folks that you just get started by taking the first step to get your data in order and ask questions that will help make a specific business decision.
You don’t have to solve all the business decisions. You don’t even have to solve the biggest ones right away, but figure out what decisions you can make with people data that will make a big impact on that particular problem. The report, Unlocking the C-Suite’s Hidden Superpower: People Analytics, has a list of dos and don’ts that will give leaders a starting point to make some decisions.