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Whyinsightsabout
yourpeopleshould
playapartinevery
businessdecision
Inside this issue
At a glance: Four ways people analytics can
shape strategy.
01: From product launches to new growth
plans, how insights about your talent impact
the whole business.
02: Three common barriers in the path to
finding real value in data on your people.
03: How to create a people analytics capability
that reaches every business process.
04: Shift the culture so leaders seamlessly use
people analytics in their decisions.
March 2016
10Minuteson people analytics
While many business leaders believe they’re
making the right moves to become a data-
driven enterprise, they often ignore a crucial
piece of the puzzle: people analytics, which are
insights derived from a company’s talent data.
After all, it’s the rare business that doesn’t
depend on data to inform big decisions. For
example, to learn if customers are likely to
buy a new service, you look to past purchasing
behavior. But why not also analyze people data,
like the sales team’s skills and engagement
levels? This may tell you if the team’s equipped
to deliver on the goal—which can be as crucial
to success as understanding customer demand.
The majority of CEOs acknowledge their
employees have a high impact on business
strategy.1
And people analytics are the way to
tangibly see and shape that impact. Yet people
insights are often missing from even routine
activities, like quarterly business reviews.
Most companies have yet to make the
investment to act on people data—and if they
have, they relegate the practice to HR. But it’s
time for business leaders to accept a new role. In
an era of big data, your business should invest in
using data about your biggest investment of all.
Getting the most value out of your most
valuable asset
Integrating people analytics into core business
activities enables you to better:
1.	Execute strategy
Forty-seven percent of executives said
it’s a long-term challenge to determine
the people they need to support business
strategy.2
On average, talent deficiencies
undermine strategy 40% of the time.3
2.	Account for the real costs of talent
Your workforce is the single largest annual
investment for most companies, at more than
30% of revenue.4
Regularly reviewing people
data, like hidden labor costs and turnover
trends, can bring to light issues that’ve held
back your business, or opportunities where
your people could work more effectively.
3.	Maximize your people investment
Despite a drop in labor costs per full-time
employee, in 2014, companies earned
less revenue on people investments. And
employee turnover, including that of high
performers, has reached the highest levels
since 2011.5
1 PwC, 2016 US CEO Survey.
2 Project Management Institute, Rally the Talent to Win:
Transforming Strategy into Reality, 2014.
3 PwC and Project Management Institute, Talent Management:
Powering Strategic Initiatives in the PMO, November 2014
4 PwC analysis, Focus on Five series, 2016.
5. PwC, Trends in People Analytics, 2015.
At a glance
At a glance
…in your operating plans to
grow and create competitive
advantage in a new country:
•	 Should you support the expan-
sion with expatriates? How do
you best repatriate them?
•	 Can you build a team with
the cultural dexterity and
local know-how to hit
growth objectives?
•	 Do you have enough people
prepared to work with new
processes and technology?
•	 How can you ensure your
teams uphold safety and
quality standards?
…in quarterly reviews to align
costs with business strategy:
•	 How accurately can you
project next quarter’s
labor costs?
•	 What options do you have to
control labor costs besides
blanket hiring freezes? Which
have the best returns?
•	 What hidden costs might
result from turnover or the
aftermath of workforce
reductions?
…as part of your strategic
business plan to stimulate
innovation:
•	 Can you identify the talent
you need to develop or hire
based on your business goals?
•	 Are you developing both
Producer and Performer
talent to be successful?
•	 How consistently do your
leaders share top talent with
the rest of the organization,
both locally and globally?
•	 Do you know which roles
are most pivotal to your
organization’s success?
…as part of your annual sales
strategy to create unique
customer experiences:
•	 Do you have enough
manpower and the ability to
ramp up or down to address
market fluctuations and
changing customer needs?
•	 Is your sales force structured to
best deliver the new sales goals?
•	 How do you keep people
engaged in the midst of
intense work demands?
How people analytics propel the business
Big business decisions don’t commonly include people analytics—but they should.
Here are four examples where unlocking people data possibilities can shape your
strategy and help you make more informed decisions…
01
The power of people
analytics in your
biggest decisions
Q: How often have talent deficiencies significantly hampered the implementa-
tion and execution of strategy in the last three years?
Bases: 548 senior executives; 726 HR and business leaders.
Sources: Project Management Institute, Rally the Talent to Win: Transforming
Strategy into Reality, 2014. PwC and Project Management Institute, Talent
Management: Powering Strategic Initiatives in the PMO, November 2014.
Will your talent strategy help or hinder business?
Lacking mature talent practices, such as analytics use among
leaders, is costly…
35%of execs
say talent
deficiencies
heavily
hampered
more than
1/2 of recent
strategy efforts
40%the average
amount of
time that talent
deficiencies
undermine
strategy
implementation
…but investing in them brings payoff:
85%of executives with mature talent processes see
above-average financial performance
77%see better strategy implementation
75%report higher revenue growth
At a recent workshop, we didn’t hear the common
trope of “HR gaining a seat at the table”; rather,
one executive said, “people data is now buying a
seat at the table.” Here are two examples where
people analytics made a real difference in a business
initiative—not an HR one.
Pivotal in a product launch
At a Midwest-based technology company, creating
a new product to meet Wall Street growth
expectations meant redefining delivery. Leadership
wondered: Would there be enough talent for new
senior-level technical roles, especially if product
demand met projected sales goals? As the company
prepared for the transition, they discovered a
problem: There weren’t enough employees to take
on elevated job responsibilities.
Looking closely at people data formerly confined
to HR, business unit (BU) leaders learned that
internships were talent feeders that moved people
up from junior roles to mid-level roles and on to
senior-level positions. But unwritten HR practices
inhibited upward talent flow by capping raises at
10%. As a result, high performers didn’t take on new
responsibilities—and managers didn’t promote them.
Historically, these issues wouldn’t have surfaced
as concerns. But enabling BU leaders to access and
understand people data uncovered the real source
of pipeline problems—and how to address them as a
business. Managers enacted development programs
to flow needed skills through the company and
ensure they’d have enough leaders for future product
launches. They adjusted compensation practices to
retain high performers, who were crucial for keeping
the business on track for three-year sales objectives.
And they treated the internships as business
priorities to accelerate their people’s potential.
Gearing the business for growth
A B2B agency—whose core product was its people—
suffered high turnover, threatening its ability to
serve clients and meet growth goals. Face-to-face
exit interviews indicated most employees pursued
“better opportunities elsewhere,” so leaders
assumed compensation wasn’t competitive and kept
increasing budgets. Yet turnover continued.
To understand what was going on, the organization
put a people analytics pilot in place and enacted a
formal, quantitative survey with every departure to
collect anonymous, standardized data. For the first
time, it identified the roles that drive the most value
for the agency, then analyzed how top performance
correlated with pay. This focus unveiled surprising
findings: The most pivotal roles weren’t senior
vice presidents, but rather the managers and
directors who led the client experiences. And high
performers in these roles didn’t leave for more
money, but for better work/life balance and fewer
monotonous tasks.
These insights revealed where the company
could invest in the right remedies. So it enacted
flexibility programs, increased career development
opportunities, and incorporated job rotations.
Instead of viewing these as HR costs, the business
recognized them as crucial investments for long-
term growth and sustainability.
02
Three factors holding
you back from real
value in people data
What people data can tell you
These sample insights derived from people data can take the
guesswork out of decision making.
Level of engagement
for top-performing
employees
Sources where top
employees come from
and how to find more
Predictions of
which people
will leave or stay Employee
preference for
rewards and
working stylesROI on training and what
development activities
are most impactful
Effectiveness of
diversity inclusion
programs
Forecasts of future
labor costs, by
quarter and by year
Value of an effective
global mobility program
If people data is crucial to the whole business,
why don’t companies prioritize it? We see three
common mistakes:
1.	Questions asked about talent are too simplistic.
Today, many business leaders limit their thinking
about people data to merely headcount: How many
people do I need? This question is far too narrow, and
doesn’t take into account people data like employ-
ees’ productivity, capabilities, willingness to stay,
ability to develop, and so on.
Deeper questions should be considered:
•	 How do I design jobs to maximize the time people
spend on their most valuable activity?
•	 How can I retain employees when they’re tasked
with tedious work for months at a time?
•	 What is the right place to physically or virtually
locate jobs?
•	 How do I minimize risks during a change manage-
ment program?
Analyzing people data allows you to make fully informed
business decisions on how to inspire stronger perfor-
mance, and yield better return on your investments.
2.	Leaders aren’t expected to use people data in
decision making.
Making strategic moves without factoring in people
data continues to be the norm, as leaders in business
units and support functions often haven’t used this
type of information—and aren’t required to take
responsibility for using it.
For instance, when readying for a change initiative,
leaders aren’t typically required to know which
employees are the most impactful in aiding the
spread of corporate communications. They’re not
held accountable for changing group dynamics if
25% of their new hires leave in the first year.
Leaders don’t feel accountable for these and therefore
don’t see the need to change their current business
processes to incorporate people data, in spite of the
inefficiencies and gaps in historic processes.
3.	 People data is confined to a single function.
At some large companies, people analytics teams
are the fastest-growing part of HR. But the problem
with that approach is that it pigeonholes people
analytics to a single function instead of embedding
the data widely, similar to the way financial data is
routinely used throughout a business.
As a result, people data is trapped among a select
few, so the right insights don’t always get to those
who need it most. For instance, when a new market
event or new regulation suddenly creates a talent
shortage, there’s little data-based discussion among
leaders as to what skills are available both internally
and externally to best close the talent gaps.
Likewise, during a merger, culture integration is
considered one of the biggest success factors. Yet
people data—such as which top performers are
at risk of leaving, or which reward programs are
most desired by employees —is rarely included in
the conversation.
How to supply
people analytics
to the business
03
The evolution of people analytics
What does people data look like in your company?
Leading
•  Analytics is part of all big decisions
•  Data is automated and integrated
•  HR business partner sits with business leaders
•  Predictive modeling in place
•  All of HR takes action based on business
decisions
Advanced
•  Data is integrated around employee life cycle
•  People data includes non-HR sources
•  HR business partners apply insights
•  Forecasting in use
Foundational
•  Core employee data available quickly
•  Data is credible
•  HR owns but shares people data
Pre-foundational
•  Data lives in spreadsheets
•  Pulling data is time-	 •  Data stays primarily
 consuming	   in HR
•  Data accuracy is
questionable
With many companies already committed to broader
data and analytics investments, what does it mean
to incorporate people analytics as well?
Who leads the change?
Whether led by HR, the chief data officer, or chief
information officer, a centralized people analytics
team should work closely with operations, finance,
and other functional leaders to get people data
into the hands of every decision maker. They’ll also
be responsible for data governance, technology
adoption, and shepherding culture change. The
group should comprise full-time employees;
tasking an HR reporting team with people analytics
won't work.
What parts of the business should you start with?
Rather than compile people data and search for a
way to use it, look at existing business processes,
from supply chain to RD, and see if they
sufficiently use people data. Typically, they don’t.
For example, is the finance function budgeting for
a new innovation group without first assessing
employees' skills?
Is your data and technology ready?
Consider four areas:
Metrics you need: Begin with the basics. For
example, the finance function might start with
turnover rate and labor costs as percentage of
revenue. As a function matures in people data
usage, identify broader people metrics that impact
a business process, like how often the successor
pipeline is actually used. Also, measure metrics
consistently, such as agreeing if turnover data
includes part-time workers or not.
Where you’ll bring data together: Distribute
data through a central dashboard so leaders can
access and visualize it. Many vendors exist, but
spreadsheets won’t cut it—you need software that
lets users access data from both inside and outside
the company. People data may be able to piggyback
onto other existing platforms and eventually
integrate with other functions, like finance and sales.
Incorporating your people’s perceptions:
Examine how to include your people’s sentiments.
Is survey data integrated with your metrics, or
is it held by your survey vendor? Can you more
effectively turn data into insights, such as through
broader distribution or by asking better questions?
Your ability to model and forecast: While many
companies haven’t yet built predictive models for
people analytics, they’re key for shifting out of trend
analysis and reactive mode. Do you have a model to
understand whose résumés should go on top of the
candidate pile, beyond anecdotal input? Can you
forecast how MA would impact your people?
Remember that technology is just a piece of the
solution. More important is ensuring the supply
of people data keeps pace with the organization’s
ability to use it. We’ve seen one bank invest millions
in a people analytics function but fail to see ROI
when leaders didn’t understand why they should
alter time-tested processes with new data.
Changing how your
people think about
people metrics
04
Follow the leaders
Outside of identifying and recruiting top talent, the C-suite
isn’t heavily invested in making strategic people decisions to
transform human capital.
Q: Are C-suite executives at your organization heavily involved—as part of
their regular work—in the following?
Base: 548 senior executives
Source: Project Management Institute, Rally the Talent to Win: Transforming
Strategy into Reality, 2014.
Recruiting top talent from outside
the company
55%
Setting talent management
priorities
46%
Forecasting future strategically
important talent requirements
44%
Identifying unmet strategically
important talent requirements
41%
Tracking top talent internally 40%
Identifying top talent internally 60%
Coaching/mentoring top
talent within the company
36%
Here’s how to start the shift required:
1.	Admit you have blind spots.
People analytics need full commitment—not just
the practice of using people data in pockets of the
organization. We’ve noticed it’s often the long-
established, well-oiled business processes that may
be most in need of people analytics. For example,
many leaders’ annual budgets don’t factor in
whether they have the best skillsets or the right
number of senior-level roles they need to support
and deliver on their plans. So it’s crucial you
acknowledge that a lack of people analytics truly
holds back the business.
2.	Quell the desire for direct ROI.
Much like brand success can’t be traced to a single ad
campaign, and corporate responsibility investments
can’t be linked directly to profits, defining ROI on
people analytics is typically not measurable in a
single unit in savings or time. But your business
case should address a number of people factors at
play—and explain that people analytics’ real ROI is
pinpointing hidden talent problems.
3.	Evangelize change—especially in the middle.
Decision-makers are at different levels of the orga-
nization, so don't overlook the role of mid-level em-
ployees. It is not enough for the C-suite to see value
if there are operational leaders stuck in old ways of
thinking. Define what all leader, mid-management,
and staff roles and expectations are, but particularly
focus on the middle of the organization. We’ve seen
companies that rolled out the right people analyt-
ics tools, but failed to include mid-level employees
because they feared the change process.
What helps win them over? Share stories of when
people data changed a business strategy for the
better. Or curate the most intriguing learnings from
a sea of data that might otherwise be overlooked.
You might weave people data usage into incentives
programs. Be transparent about how employee data
is anonymized and secured to dissuade any data
privacy worries.
4.	Make the tools inviting to use.
Smartphones have trained people to expect
appealing, hassle-free technology. So it’s important
that your people analytics tools are user-friendly
(extensive training not required), mobile-friendly
(should be just as usable on a small screen), and
accessible across the organization.
Consider consulting a user experience expert on
your internal applications design, as adoption of
people analytics tools requires you to apply the same
standards of experience for your employees as you
do for customers.
Ensure data visualizations are a key output, so
users can easily understand people data trends.
And consider gamification or online simulations
to make the concept of change feel more realistic.
For example, scenario planning could become
more conceivable in a simulation that allows users
to visualize what your company would look like if
turnover spiked or hiring declined.
At a glance
If you have more
than 10 minutes
10Minutes are now available in
60 seconds.
Install the PwC 365 app, available in the
iTunes and Google Play stores, and advance
your business thinking everyday.
See more detail on building a people
analytics function
Our PwC Saratoga benchmarks measure where
435 US companies stand in workforce trends and
people data usage. Understand how you compare
and how you can get to the next level of people
analytics maturity to unlock data possibilities.
For more on the technology side, read our latest
Global HR Technology survey on the challenges
and opportunities companies face when shifting
HR applications into the cloud.
Transform human capital through
people engagement
Our report identifies the four types of engaged
employees and the impact of each on your
business outcomes.
Follow us on Twitter for the latest insights
on this issue and other important topics
@PwC_LLP
@strategyand
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How PwC
can help
© 2016 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the United States member
firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure
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Solicitation.
PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with more than
180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out
more by visiting us at www.pwc.com. 138783-2016
Contacts
Shebani Patel
Principal, People Analytics
(408) 817-7445
shebani.patel@pwc.com
Nik Shah
Principal, People Analytics
(703) 918-1208
nik.shah@pwc.com
Jeff Hesse
Co-leader, US People and Organization
(773) 251-7132
jeff.hesse@pwc.com
Scott Olsen
Co-leader, US People and Organization
(646) 471-0651
scott.n.olsen@pwc.com
To have a deeper discussion about how your business can unlock data possibilities
and transform human capital through people analytics, please contact:
Authors
Scott Pollak
Principal, People Analytics
(408) 817-7446
scott.pollak@pwc.com
Rishi Agarwal
Principal, People Analytics
(408) 872-2544
rishi.agarwal@pwc.com

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People Analytics

  • 1. Whyinsightsabout yourpeopleshould playapartinevery businessdecision Inside this issue At a glance: Four ways people analytics can shape strategy. 01: From product launches to new growth plans, how insights about your talent impact the whole business. 02: Three common barriers in the path to finding real value in data on your people. 03: How to create a people analytics capability that reaches every business process. 04: Shift the culture so leaders seamlessly use people analytics in their decisions. March 2016 10Minuteson people analytics While many business leaders believe they’re making the right moves to become a data- driven enterprise, they often ignore a crucial piece of the puzzle: people analytics, which are insights derived from a company’s talent data. After all, it’s the rare business that doesn’t depend on data to inform big decisions. For example, to learn if customers are likely to buy a new service, you look to past purchasing behavior. But why not also analyze people data, like the sales team’s skills and engagement levels? This may tell you if the team’s equipped to deliver on the goal—which can be as crucial to success as understanding customer demand. The majority of CEOs acknowledge their employees have a high impact on business strategy.1 And people analytics are the way to tangibly see and shape that impact. Yet people insights are often missing from even routine activities, like quarterly business reviews. Most companies have yet to make the investment to act on people data—and if they have, they relegate the practice to HR. But it’s time for business leaders to accept a new role. In an era of big data, your business should invest in using data about your biggest investment of all. Getting the most value out of your most valuable asset Integrating people analytics into core business activities enables you to better: 1. Execute strategy Forty-seven percent of executives said it’s a long-term challenge to determine the people they need to support business strategy.2 On average, talent deficiencies undermine strategy 40% of the time.3 2. Account for the real costs of talent Your workforce is the single largest annual investment for most companies, at more than 30% of revenue.4 Regularly reviewing people data, like hidden labor costs and turnover trends, can bring to light issues that’ve held back your business, or opportunities where your people could work more effectively. 3. Maximize your people investment Despite a drop in labor costs per full-time employee, in 2014, companies earned less revenue on people investments. And employee turnover, including that of high performers, has reached the highest levels since 2011.5 1 PwC, 2016 US CEO Survey. 2 Project Management Institute, Rally the Talent to Win: Transforming Strategy into Reality, 2014. 3 PwC and Project Management Institute, Talent Management: Powering Strategic Initiatives in the PMO, November 2014 4 PwC analysis, Focus on Five series, 2016. 5. PwC, Trends in People Analytics, 2015.
  • 2. At a glance At a glance …in your operating plans to grow and create competitive advantage in a new country: • Should you support the expan- sion with expatriates? How do you best repatriate them? • Can you build a team with the cultural dexterity and local know-how to hit growth objectives? • Do you have enough people prepared to work with new processes and technology? • How can you ensure your teams uphold safety and quality standards? …in quarterly reviews to align costs with business strategy: • How accurately can you project next quarter’s labor costs? • What options do you have to control labor costs besides blanket hiring freezes? Which have the best returns? • What hidden costs might result from turnover or the aftermath of workforce reductions? …as part of your strategic business plan to stimulate innovation: • Can you identify the talent you need to develop or hire based on your business goals? • Are you developing both Producer and Performer talent to be successful? • How consistently do your leaders share top talent with the rest of the organization, both locally and globally? • Do you know which roles are most pivotal to your organization’s success? …as part of your annual sales strategy to create unique customer experiences: • Do you have enough manpower and the ability to ramp up or down to address market fluctuations and changing customer needs? • Is your sales force structured to best deliver the new sales goals? • How do you keep people engaged in the midst of intense work demands? How people analytics propel the business Big business decisions don’t commonly include people analytics—but they should. Here are four examples where unlocking people data possibilities can shape your strategy and help you make more informed decisions…
  • 3. 01 The power of people analytics in your biggest decisions Q: How often have talent deficiencies significantly hampered the implementa- tion and execution of strategy in the last three years? Bases: 548 senior executives; 726 HR and business leaders. Sources: Project Management Institute, Rally the Talent to Win: Transforming Strategy into Reality, 2014. PwC and Project Management Institute, Talent Management: Powering Strategic Initiatives in the PMO, November 2014. Will your talent strategy help or hinder business? Lacking mature talent practices, such as analytics use among leaders, is costly… 35%of execs say talent deficiencies heavily hampered more than 1/2 of recent strategy efforts 40%the average amount of time that talent deficiencies undermine strategy implementation …but investing in them brings payoff: 85%of executives with mature talent processes see above-average financial performance 77%see better strategy implementation 75%report higher revenue growth At a recent workshop, we didn’t hear the common trope of “HR gaining a seat at the table”; rather, one executive said, “people data is now buying a seat at the table.” Here are two examples where people analytics made a real difference in a business initiative—not an HR one. Pivotal in a product launch At a Midwest-based technology company, creating a new product to meet Wall Street growth expectations meant redefining delivery. Leadership wondered: Would there be enough talent for new senior-level technical roles, especially if product demand met projected sales goals? As the company prepared for the transition, they discovered a problem: There weren’t enough employees to take on elevated job responsibilities. Looking closely at people data formerly confined to HR, business unit (BU) leaders learned that internships were talent feeders that moved people up from junior roles to mid-level roles and on to senior-level positions. But unwritten HR practices inhibited upward talent flow by capping raises at 10%. As a result, high performers didn’t take on new responsibilities—and managers didn’t promote them. Historically, these issues wouldn’t have surfaced as concerns. But enabling BU leaders to access and understand people data uncovered the real source of pipeline problems—and how to address them as a business. Managers enacted development programs to flow needed skills through the company and ensure they’d have enough leaders for future product launches. They adjusted compensation practices to retain high performers, who were crucial for keeping the business on track for three-year sales objectives. And they treated the internships as business priorities to accelerate their people’s potential. Gearing the business for growth A B2B agency—whose core product was its people— suffered high turnover, threatening its ability to serve clients and meet growth goals. Face-to-face exit interviews indicated most employees pursued “better opportunities elsewhere,” so leaders assumed compensation wasn’t competitive and kept increasing budgets. Yet turnover continued. To understand what was going on, the organization put a people analytics pilot in place and enacted a formal, quantitative survey with every departure to collect anonymous, standardized data. For the first time, it identified the roles that drive the most value for the agency, then analyzed how top performance correlated with pay. This focus unveiled surprising findings: The most pivotal roles weren’t senior vice presidents, but rather the managers and directors who led the client experiences. And high performers in these roles didn’t leave for more money, but for better work/life balance and fewer monotonous tasks. These insights revealed where the company could invest in the right remedies. So it enacted flexibility programs, increased career development opportunities, and incorporated job rotations. Instead of viewing these as HR costs, the business recognized them as crucial investments for long- term growth and sustainability.
  • 4. 02 Three factors holding you back from real value in people data What people data can tell you These sample insights derived from people data can take the guesswork out of decision making. Level of engagement for top-performing employees Sources where top employees come from and how to find more Predictions of which people will leave or stay Employee preference for rewards and working stylesROI on training and what development activities are most impactful Effectiveness of diversity inclusion programs Forecasts of future labor costs, by quarter and by year Value of an effective global mobility program If people data is crucial to the whole business, why don’t companies prioritize it? We see three common mistakes: 1. Questions asked about talent are too simplistic. Today, many business leaders limit their thinking about people data to merely headcount: How many people do I need? This question is far too narrow, and doesn’t take into account people data like employ- ees’ productivity, capabilities, willingness to stay, ability to develop, and so on. Deeper questions should be considered: • How do I design jobs to maximize the time people spend on their most valuable activity? • How can I retain employees when they’re tasked with tedious work for months at a time? • What is the right place to physically or virtually locate jobs? • How do I minimize risks during a change manage- ment program? Analyzing people data allows you to make fully informed business decisions on how to inspire stronger perfor- mance, and yield better return on your investments. 2. Leaders aren’t expected to use people data in decision making. Making strategic moves without factoring in people data continues to be the norm, as leaders in business units and support functions often haven’t used this type of information—and aren’t required to take responsibility for using it. For instance, when readying for a change initiative, leaders aren’t typically required to know which employees are the most impactful in aiding the spread of corporate communications. They’re not held accountable for changing group dynamics if 25% of their new hires leave in the first year. Leaders don’t feel accountable for these and therefore don’t see the need to change their current business processes to incorporate people data, in spite of the inefficiencies and gaps in historic processes. 3. People data is confined to a single function. At some large companies, people analytics teams are the fastest-growing part of HR. But the problem with that approach is that it pigeonholes people analytics to a single function instead of embedding the data widely, similar to the way financial data is routinely used throughout a business. As a result, people data is trapped among a select few, so the right insights don’t always get to those who need it most. For instance, when a new market event or new regulation suddenly creates a talent shortage, there’s little data-based discussion among leaders as to what skills are available both internally and externally to best close the talent gaps. Likewise, during a merger, culture integration is considered one of the biggest success factors. Yet people data—such as which top performers are at risk of leaving, or which reward programs are most desired by employees —is rarely included in the conversation.
  • 5. How to supply people analytics to the business 03 The evolution of people analytics What does people data look like in your company? Leading •  Analytics is part of all big decisions •  Data is automated and integrated •  HR business partner sits with business leaders •  Predictive modeling in place •  All of HR takes action based on business decisions Advanced •  Data is integrated around employee life cycle •  People data includes non-HR sources •  HR business partners apply insights •  Forecasting in use Foundational •  Core employee data available quickly •  Data is credible •  HR owns but shares people data Pre-foundational •  Data lives in spreadsheets •  Pulling data is time- •  Data stays primarily  consuming   in HR •  Data accuracy is questionable With many companies already committed to broader data and analytics investments, what does it mean to incorporate people analytics as well? Who leads the change? Whether led by HR, the chief data officer, or chief information officer, a centralized people analytics team should work closely with operations, finance, and other functional leaders to get people data into the hands of every decision maker. They’ll also be responsible for data governance, technology adoption, and shepherding culture change. The group should comprise full-time employees; tasking an HR reporting team with people analytics won't work. What parts of the business should you start with? Rather than compile people data and search for a way to use it, look at existing business processes, from supply chain to RD, and see if they sufficiently use people data. Typically, they don’t. For example, is the finance function budgeting for a new innovation group without first assessing employees' skills? Is your data and technology ready? Consider four areas: Metrics you need: Begin with the basics. For example, the finance function might start with turnover rate and labor costs as percentage of revenue. As a function matures in people data usage, identify broader people metrics that impact a business process, like how often the successor pipeline is actually used. Also, measure metrics consistently, such as agreeing if turnover data includes part-time workers or not. Where you’ll bring data together: Distribute data through a central dashboard so leaders can access and visualize it. Many vendors exist, but spreadsheets won’t cut it—you need software that lets users access data from both inside and outside the company. People data may be able to piggyback onto other existing platforms and eventually integrate with other functions, like finance and sales. Incorporating your people’s perceptions: Examine how to include your people’s sentiments. Is survey data integrated with your metrics, or is it held by your survey vendor? Can you more effectively turn data into insights, such as through broader distribution or by asking better questions? Your ability to model and forecast: While many companies haven’t yet built predictive models for people analytics, they’re key for shifting out of trend analysis and reactive mode. Do you have a model to understand whose résumés should go on top of the candidate pile, beyond anecdotal input? Can you forecast how MA would impact your people? Remember that technology is just a piece of the solution. More important is ensuring the supply of people data keeps pace with the organization’s ability to use it. We’ve seen one bank invest millions in a people analytics function but fail to see ROI when leaders didn’t understand why they should alter time-tested processes with new data.
  • 6. Changing how your people think about people metrics 04 Follow the leaders Outside of identifying and recruiting top talent, the C-suite isn’t heavily invested in making strategic people decisions to transform human capital. Q: Are C-suite executives at your organization heavily involved—as part of their regular work—in the following? Base: 548 senior executives Source: Project Management Institute, Rally the Talent to Win: Transforming Strategy into Reality, 2014. Recruiting top talent from outside the company 55% Setting talent management priorities 46% Forecasting future strategically important talent requirements 44% Identifying unmet strategically important talent requirements 41% Tracking top talent internally 40% Identifying top talent internally 60% Coaching/mentoring top talent within the company 36% Here’s how to start the shift required: 1. Admit you have blind spots. People analytics need full commitment—not just the practice of using people data in pockets of the organization. We’ve noticed it’s often the long- established, well-oiled business processes that may be most in need of people analytics. For example, many leaders’ annual budgets don’t factor in whether they have the best skillsets or the right number of senior-level roles they need to support and deliver on their plans. So it’s crucial you acknowledge that a lack of people analytics truly holds back the business. 2. Quell the desire for direct ROI. Much like brand success can’t be traced to a single ad campaign, and corporate responsibility investments can’t be linked directly to profits, defining ROI on people analytics is typically not measurable in a single unit in savings or time. But your business case should address a number of people factors at play—and explain that people analytics’ real ROI is pinpointing hidden talent problems. 3. Evangelize change—especially in the middle. Decision-makers are at different levels of the orga- nization, so don't overlook the role of mid-level em- ployees. It is not enough for the C-suite to see value if there are operational leaders stuck in old ways of thinking. Define what all leader, mid-management, and staff roles and expectations are, but particularly focus on the middle of the organization. We’ve seen companies that rolled out the right people analyt- ics tools, but failed to include mid-level employees because they feared the change process. What helps win them over? Share stories of when people data changed a business strategy for the better. Or curate the most intriguing learnings from a sea of data that might otherwise be overlooked. You might weave people data usage into incentives programs. Be transparent about how employee data is anonymized and secured to dissuade any data privacy worries. 4. Make the tools inviting to use. Smartphones have trained people to expect appealing, hassle-free technology. So it’s important that your people analytics tools are user-friendly (extensive training not required), mobile-friendly (should be just as usable on a small screen), and accessible across the organization. Consider consulting a user experience expert on your internal applications design, as adoption of people analytics tools requires you to apply the same standards of experience for your employees as you do for customers. Ensure data visualizations are a key output, so users can easily understand people data trends. And consider gamification or online simulations to make the concept of change feel more realistic. For example, scenario planning could become more conceivable in a simulation that allows users to visualize what your company would look like if turnover spiked or hiring declined.
  • 7. At a glance If you have more than 10 minutes 10Minutes are now available in 60 seconds. Install the PwC 365 app, available in the iTunes and Google Play stores, and advance your business thinking everyday. See more detail on building a people analytics function Our PwC Saratoga benchmarks measure where 435 US companies stand in workforce trends and people data usage. Understand how you compare and how you can get to the next level of people analytics maturity to unlock data possibilities. For more on the technology side, read our latest Global HR Technology survey on the challenges and opportunities companies face when shifting HR applications into the cloud. Transform human capital through people engagement Our report identifies the four types of engaged employees and the impact of each on your business outcomes. Follow us on Twitter for the latest insights on this issue and other important topics @PwC_LLP @strategyand Explore more content in our 365® app Our 365 app delivers fresh insights daily. You can customize the app to see only the content you care about from 10 topics (including Financial reporting, Strategy and growth, Risk, Operations, and Talent), 27 industries, and 9 thought leadership collections like 10Minutes.
  • 8. How PwC can help © 2016 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the United States member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. 10Minutes ® is a trademark of PricewaterhouseCoopers LLP US. Solicitation. PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com. 138783-2016 Contacts Shebani Patel Principal, People Analytics (408) 817-7445 shebani.patel@pwc.com Nik Shah Principal, People Analytics (703) 918-1208 nik.shah@pwc.com Jeff Hesse Co-leader, US People and Organization (773) 251-7132 jeff.hesse@pwc.com Scott Olsen Co-leader, US People and Organization (646) 471-0651 scott.n.olsen@pwc.com To have a deeper discussion about how your business can unlock data possibilities and transform human capital through people analytics, please contact: Authors Scott Pollak Principal, People Analytics (408) 817-7446 scott.pollak@pwc.com Rishi Agarwal Principal, People Analytics (408) 872-2544 rishi.agarwal@pwc.com