6 Hurdles to Overcome When Implementing People Analytics

By Betterworks
Updated on April 13, 2022
3 minute read

Today’s companies are using powerful analytical data to make many vital business decisions. In fact, the efficiency and accuracy of this type of data allow companies to make real-time decisions on many aspects of the business, such as sales, marketing and production.

Considering the effectiveness of real-time data, it should be no surprise to learn that the number of companies using people analytics to improve their HR processes has increased significantly. People analytics is the process of collecting and analyzing data to assess and improve HR practices, programs, and processes.

According to research featured in the Harvard Business Review, implementing data analytics into many HR decision-making processes can:

  • Increase recruiter’s ability to find top quality candidates by 50 percent
  • Decrease attrition rates by 35 percent
  • Improve overall performance by 20 percent
  • Boost revenue-per-employee by 4 percent

As one can see, this doesn’t only have implications within HR processes. It will affect decision making in other departments and can positively impact overall productivity and revenue.

6 Hurdles to Overcome

However, many companies face various obstacles when trying to implement data-driven analytics into the HR process. Here’s a look at the top six hurdles to overcome when implementing people analytics.

1. Lack of Company Investment

Unfortunately, many companies make the effort to collect people analytical data, yet fail to really invest in its regular use. According to research from PwC, 52 percent of companies using people analytics have not established a dedicated team to handle this data, and 39 percent do not have a strategy in place for managing the data. The good news is that when fully implemented, the investment into HR analytics will more than pay for itself.

2. Not Collecting the Right Amount and Type Data

Can you imagine a marketer or product manager making important decisions based on customer data from a single day from a full year ago? Would this year-old data reveal insight into what their customers want today? The idea of annual or quarterly data collection from your employees isn’t enough. You need real-time solutions to real-time issues. Data-collection techniques, like pulse surveys and anonymous feedback tools, are so easy and efficient to implement, you can gather instant feedback on a monthly, weekly or even daily basis.

In addition, don’t only rely on management to set the topic of questioning. Instead, obtain input from all levels within the company with crowd-sourced data. Your employees need a place to openly discuss their work environment without being prompted by leadership. These bottom-up conversations will reveal insights that management wouldn’t have thought to look into.

3. No Central Location to Store and Manage Data

According to the Harvard Business Review, one of the biggest complaints executive have about HR analytics is that it can be “inaccurate, inconsistent, or hard-to-access data” and it requires “too much manual manipulation.” These issues typically stem from the lack of a centralized location to store, track and manage the data collected from the various polls, surveys, reviews, comments and anonymous feedback. This lack of centralization makes it nearly impossible to find and analyze the right data when needed.

4. Data Not Correlated

Even companies that do create centralized management solutions for their people analytical data can still have difficulty transforming this information into usable results. In most cases, this can be attributed to the lack of investments. If your HR team lacks the skills and tools necessary to analyze the data collected for actionable insights, it will provide no real value to the company.

5. Non-Specific HR Goals

While HR analytics can play a very important role in the decision-making process, it is not an instant cure-all for all the company’s issues. Too often, HR teams try to solve all their issues, such as attrition, retention and quality of hire, all at once. Instead, focus on specific goals. For example, instead of focusing on high turnover rates, narrow the task down to why a specific position, such as accountants, has a high turnover rate by the fifth month. This will allow you to analyze tangible results that can make a real difference.

6. Expertise Vs. Insight

It’s important to understand that data analytics is just one tool. Certainly, years of HR experience, industry assumptions and best practices also should play a pivotal role when making decisions. All business decisions should be made based on a combination of industry expertise and data-driven insight.

Understanding these primary hurdles to implementing HR analytics can help you avoid these pitfalls and develop an effective strategy. The important thing is to find tools necessary to properly collect, store and analyze vital workforce data you need to obtain clear, real-time results. This will enable you to make decisions that are ideal for the specifics of your company.

With Betterworks Engage’s pulse surveys and crowd-sourced, bottom-up employee conversations, we are helping HR departments overcome these hurdles to implementing people analytics. We’re helping companies easily identify segments where there might be issues and put in place measures to counteract and improve.