People Power: The Predictive Analytics Revolution Changing Business Forever

Published On January 28, 2019

Your business won’t survive without people analytics, say the experts, so what are you waiting for?

Ask any leader for the secret of their success and the answer is rarely money, supply chain, or manufacturing, it’s people, people, and more people.

The human element is the single most critical part of any business, and yet the art of people analytics, which involves analysing employee behaviour to get a better understanding of how the workforce thinks and feels, has been strangely neglected. Until now.

People analytics is the new buzz amongst forward-thinking HR departments and businesses today, and the chatter of turning artificial intelligence and big data inward to significantly improve business is also reaching the boardroom.

“People analytics, a discipline that started as a small technical group that analyzed engagement and retention, has now gone mainstream,” said Laurence Collins, HR transformation expert at Deloitte. “Organizations are redesigning their technical analytics groups to build out digitally-powered enterprise analytics solutions.”

It’s a fairly simple concept; employees’ behaviour via communication data is aggregated and analysed, and the information is then mined by algorithms to give a clearer understanding of how people feel and interact within the business.

It is becoming clear that in an era of squeezed margins, regulatory pressures and even tighter resources, any businesses which do not seek to gain an advantage by adapting AI and big data techniques in such a manner are likely to fall behind their competitors.

“Your business, your organization, won’t survive without people analytics,” said Jacob Morgan, author, and co-founder of the Future of Work community. “People analytics is absolutely growing into a core business capability that every organisation must invest in heavily. It is truly the foundation of employee experience.”

Despite minimal mainstream press coverage, interest in people analytics is growing at a phenomenal pace. In the last five years, it has gained traction mainly in, as expected, human resources departments, but wider awareness is seeping through at higher levels of corporates.

While Artificial Intelligence (AI) is a catch-all label for technologies that use algorithmic computing to transform vast amounts of data into actionable insight, the technology is already rife in modern society through specific uses like Amazon Alexa, and Google’s Predictive Engine.

Total expenditure on the technology is predicted to rise from $8bn in 2016 to $47bn in 2020.

A 2017 report by Deloitte revealed that 71 percent of 11,000 companies surveyed view people analytics as a high priority, but the consultancy said progress in adoption had been slow. The percentage of companies correlating HR data to business outcomes, performing predictive analytics, and deploying enterprise scorecards has barely changed in the last year.

Of course, it’s not uncommon to hear the words ‘Big Brother’ in any discussion regarding surveillance of communications and analysis of the workforce, and experts warn that in order for us to feel completely satisfied with the introduction of such techniques, employees must be educated and made more aware of how this technology is going to help them and improve their ability to do their jobs.

“All we are seeing at the moment is the tip of the iceberg,” said Ben Weber, founder and chief executive of people analytics firm, Humanzye. He said his belief in the possibilities which could be achieved are endless, but greater awareness of the ups and downs is needed before people feel truly comfortable.”

AI still has negative connotations amongst large parts of the general public, often driven by science fiction narratives, however, uncertainty and trust issues surrounding the technology are very real. It is also difficult for people to trust something that they don’t understand completely.

The greater fear is simply that AI will replace jobs. Andy Haldane, chief economist at the Bank of England, in August warned that artificial intelligence could cause disruption “on a much greater scale” than anything since the Industrial Revolution.

He said that the UK would need a skills revolution to avoid significant numbers of people being made redundant as robots and AI take their place in the workforce, in remarks made to the BBC.

“Each of those [industrial revolutions] had a wrenching and lengthy impact on the jobs market, on the lives and livelihoods of large swathes of society,” he said. “Jobs were effectively taken by machines of various types, there was a hollowing out of the jobs market, and that left a lot of people for a lengthy period out of work and struggling to make a living.”

He said this is the “dark side of technological revolutions” and that dark side has always been there. “That hollowing out is going to be potentially on a much greater scale in the future, when we have machines both thinking and doing – replacing both the cognitive and the technical skills of humans,” he added.

However, a report in April by the consultancy Gartner estimated that AI will create 2.3m new jobs while eliminating only 1.8m jobs by 2020; so while there may be short-term pain, there is hope of long-term gain in terms of job creation.

According to Deloitte, scare stories of robots replacing humans often do not take into account that a large number of jobs are at risk anyway and that automation is a natural evolution of modern business; replacing dangerous or boring jobs would potentially free up human capital elsewhere.

Or as one anonymous compliance officer at a tier one global bank told Radar: “We now use an AI system to monitor traders, so I am free to actually do my job instead of being stuck behind reams of paperwork or scanning through hundreds of emails until my eyes go square.”

Other areas where efficiencies can be gleaned include exploring the relationship between productivity, sick leave, overtime and safety incidents; comparing the characteristics between high performers in a workplace versus underachievers; measuring the effectiveness of learning and development programs and examining the differences between the performance of permanent employees versus contractors.

Technology now exists which allows us to investigate the relationship between the employee experience, engagement and retention, and it can address specific business problems, such as sales productivity, fraud and customer satisfaction.

“It is clear that over time, people analytics will eventually help companies to create work environments where employees are more satisfied, and organizations are much more profitable.”

Companies that straddle the line between the responsible use of people analytics and understanding how best to use it, are those which stand the best chance of success, said Deloitte.

“Despite the progress that is being made, people analytics has yet to reach its full potential,” Collins said. “Many of the insights gleaned from today’s data are fairly straightforward results of the integration of employee attribute, movement, and operational data.”

He said the people analytics of the future will pull in behavioural data to help uncover information that organizations are only now beginning to understand, such as what drives future employee actions.

“And by having greater insight into the likelihood of future events, planners can make faster and more grounded decisions, resulting in increased efficiency and cost-effectiveness,” he said.

The message is simple; people are key, and the responsible use of such analytics can help any business gain powerful insights and influence programming in a way that attracts and retains the best employees—any enterprise’s most important customers.