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How some companies reap rewards of people analytics tools

Using people analytics to gain insight is incredibly tricky, and it's not necessarily for the reasons you might think. Here's a look at how some companies are approaching the issue.

JetBlue felt confident that its rigorous screening of aspiring flight attendants would best evaluate their abilities to serve passengers with consistent good cheer in the confined space of an airliner.

The company looked for eight characteristics in candidates by conducting several interviews, studying work samples and making psychological assessments. But all those steps only answered JetBlue's question about whether a prospective flight attendant could be nice on the job. The airliner realized it was focusing on the wrong characteristic -- the wrong question, really -- after giving people analytics tools (also known as HR analytics) a try three years ago.

Data showed that being helpful meant more than being nice, prompting JetBlue leaders to acknowledge that, like many other organizations, instinctively believing what makes an ideal candidate is different from scientifically knowing it. Now applying people analytics tools to hire for all positions, JetBlue claims it has found a more precise way to pick the best employees generally or in this category out of the 125,000 applications it receives annually for companywide positions, a new approach that's backed by higher employee engagement and retention, as well as a 12% decrease in absences.

people analytics

HR consultant Andrew Spence pointed to JetBlue's awakening to the power of people analytics tools as an example of how organizations need to have "an experimental mindset." That means having HR employees figuratively wear a white coat and literally apply scientific exactitude to the data they collect on employees and applicants. JetBlue got help from the Wharton School on its first go-around with people analytics, but commercial technologies, Spence said, are improving to help organizations go it alone. All companies first need to do is form hypotheses about their employees, test and refine them, find their people problems (as JetBlue did) and keep applying analytics to ensure the problems are solved.

Right questions critical for people analytics tools

"What makes a successful employee in a company is a million-dollar question," Spence said. "Is it productivity? Is it teamwork?" The question is just as important as the answer, and both will differ depending on the organization, he added. Employees in call centers are frequently studied because they have a distinct, measurable type of output, but jobs with varying shades of production and responsibilities have been harder to define. "A nurse," he said. "How do you measure that?"

Spence and many others in HR believe people analytics solves those tough-nut questions about employee performance, retention and recruitment. But there still seems to be a gap between what people analytics can do and what many organizations are doing with it.

"Many companies are using it effectively. We're seeing a lot of experiments with it," said Jean Martin, a talent solutions architect at CEB-Gartner. "But not a lot of companies get every aspect right." Most often, companies fail to master people analytics not by the answers that analytics provides but by an inability to ask the questions that best fit organizational goals and realities, she said.

Telefónica Europe has found success with people analytics by posing fitting questions, Martin said. Before any project starts, the HR analytics team meets with other company leaders to establish what the analytics should accomplish and ensure the results will be used by the business. Analytics projects include Telefónica having applicants simulate the tasks they'd perform in their potential jobs and giving hiring managers the results so they can best align people with skill sets, she said.

There are not many things that are competitive in HR, but when you're competing for talent, you bet companies aren't going to spill the beans about everything.
Jason AverbrookCEO, Leapgen

The energy industry is also making use of people analytics, with competitors Shell Oil and Chevron respectively trying to get an edge on the recruitment and retention of highly skilled professionals. For example, according to a Deloitte interview with Shell VP of HR Data and Analytics Esther Bongenaar, Shell Oil's HR leaders assess whether their policies lead to improved employee performance. They also review whether the company should strive to increase job tenure, question if high-salaried expatriates should work in places where they add the most value and examine how directly management influences individual employee engagement.

Chevron saw people analytics as a means to review how it could increase revenue per employee. The company constructed an HR analytics team that spread across departments to include all important stakeholders, and it created a core squad that was charged with creating an in-house analytics curriculum so that everyone would have a clear understanding of the process. People analytics has become so trusted within Chevron, according to the Deloitte article, "People analytics: Recalculating the route," that the core group commonly runs standard reports for all talent metrics and is consulted for decisions on reorganization, restructuring and other business decisions.

Secrets to using people analytics tools

If those examples and other case studies for people analytics seem vague -- if they lack detailed applications and outcomes from the practice -- that's because most organizations purposely want to keep that information private, according to Jason Averbook, CEO of the HR consultancy Leapgen.

Sure, companies will generalize how they're applying people analytics and how it's transforming decision-making and creating operational efficiencies, but few will detail exactly how they're doing it and what answers it provides, Averbook said. It is, after all, proprietary information. "There are not many things that are competitive in HR, but when you're competing for talent, you bet companies aren't going to spill the beans about everything."

That means competitors of Foot Locker, for example, will have to wonder if its cited reduction in turnover and increase in retention is purely a result of the retailer using Infor's Talent Science predictive analytics software or a combination of other practices.

"The analytics capabilities that companies have is one of the true differentiators," Averbook said. "If I'm an HR department spending a lot of money, I wouldn't share much information. That's a true advantage."

This was last published in December 2017

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