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PwC finds many companies creating, improving people analytics

A new PwC report finds people analytics slowed by a lack of technology, while HCI report says many organizations fail to make changes urged in engagement surveys.

An overwhelming number of organizations believe it is vital to either start or upgrade HR analytics, said a new...


According to the research by PwC, a network of consulting firms, 86% of organizations said that creating or improving "people analytics" is a strategic priority for the next one to three years, and 46% already have implemented dedicated people analytics.

Scott Pollak, principal at New York-based PwC, said the ability of organizations to make a business case for HR analytics has improved as the understanding of its impact on businesses has grown.

"This is a sign that senior executives, the CEO and C-suite, are continuing to put pressure on getting better information about people, getting better data to make decisions around talent," Pollak said. "That is what is driving so many CHROs [chief human resources officers] to build their analytic capability and invest in analytics in their department."

The 2015 PwC Saratoga Benchmarks report, Trends in People Analytics, is based on responses from leaders at 435 organizations in a range of industries, company sizes and revenues.

The report found a skills gap in the ability of business leaders to effectively interpret and use data effectively. Only 6% of participants said that all of their HR business partners had the right level of analytical skill to interpret and use predictive models to address business problems. Organizations cited deficient technology and a lack of a central data source as key barriers to producing successful reports on HR analytics. In the report, 46% of the organizations said they don't have the HR technology in place to produce top-rate assessments on people analytics. Also, 69% said the major obstacle is data stored in different computer and paper files, while 56% said they are hampered by paper processes.

Pollak said historically, HR has consisted of a series of individual departments, including many with their own transactional systems. As a result, core HR data, including, for example, learning, payroll, talent acquisition and succession data may be in different places and systems.

In a similar vein, especially for global companies, HR departments are regional in focus and take into account the laws of the jurisdictions in which they operate. As a result, it is difficult to obtain global data. Also, there are no standards for HR data -- nothing similar to generally accepted accounting principles (GAAP) for financial accounting, he said.

The report cited four key trends in HR analytics, including rising investments, a growing dissatisfaction with current approaches to data governance, an increasing effort to improve prediction of flight risk among top talent and a push to build targets and benchmarks into analytic tools.

The report said that 56% of organizations have a formal strategy for using HR technology and 25% plan to move their HR analytics technology to the cloud over the next one to three years.

However, it also warned that building a sustainable capability for people analytics requires more than a technology tool, and said a full strategy and adoption plan is essential for long-term success.

HCI: Organizations falling short on changes urged in engagement surveys

Another new report found that too many organizations are ineffective at making changes based on the results of employee engagement surveys.

The report by the Human Capital Institute found that many organizations simply share data from employee surveys instead of enacting meaningful change.

"Although most companies recognize that it is beneficial to survey employees to measure and analyze their engagement with the organization, many fall short when it comes to taking action based on those survey results," the report said.

In the survey, conducted by the institute in partnership with Oracle, 88% of respondents said they share the statistics with senior leaders after collecting engagement and attitude data, while 69% analyze the data and create a plan for changes in the organization. Also, 69% share feedback with employees.

The survey found 93% of respondents agree that high employee engagement is critical to business success, but more than 40% of organizations believe they possess more accurate and timely insights into the satisfaction of their customers than their employees.

HCI emailed a link to a 20-question survey to members between April 16 and May 6 and received 327 completed questionnaires.

The report comes as an increasing number of companies are using cloud software for weekly, monthly or quarterly "pulse surveys" of employee attitudes and job satisfaction. Most companies still rely on annual engagement surveys, the report said. The most frequently used measures of employee attitudes and sentiment are exit interviews, manager discussions with HR and surveys developed internally.

The report noted there is a clear need for more regular measurement because 43% of respondents said a lengthy time between data collection and action is a top barrier to effective measurement.

Analysis of employee social media posts is also among several engagement measures likely to see tremendous growth in the next three years, according to the report.

HR and business leaders find themselves stymied by roadblocks in effectively measuring employee engagement, including a failure of leaders to effect change based on feedback. Employees are also not convinced the surveys are anonymous, meaning employees feel hindered in providing negative comments, the report said.

It recommends strategies for companies to boost employee engagement, including starting a formal program to measure and assess engagement, conducting interviews with employees about what could make them stay at their company, encouraging employee feedback and committing to a long-term approach to improving or maintaining engagement.

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