When we use data to uncover the workplace behaviors that make people effective, happy, creative, experts, leaders, followers, early adopters, and so on, we are using “people analytics.”

—Ben Waber

People Analytics author and Humanyze CEO, Ben Waber, defines people analytics as a “data driven approach to people-related decisions and practices.” Analytics are data points that help organizations improve their business practices. People analytics, therefore, is the application of what you can learn about your business from the people who work for you. For instance, if you have a salesperson who has increased her sales using new techniques that she learned from a training, you might use that data point to create a new training program for the whole sales team.

People analytics are insights derived from an organization’s employee data. When people work for an organization, there are data points that businesses can use to improve the organization. That data provides value for HR and business leaders to use when they are trying create actionable insights that improve business outcomes. Leaders may use people analytics to create strategies and plan for the future of the business. People analytics may be used for quarterly planning or long-term business strategy.

RiskIQ chief data scientist, Adam Hunt, notes: “The amount of data you can grab, if you want, is immense, but if you’re not doing anything with it, turning it into something interesting, what good is it? Data science is about giving that data a purpose.”^[1] In other words, the data should help drive continuous improvement of a business’ performance.What is the purpose of using people analytics? People analytics help business leaders make informed decisions. In Human Resource Management, people analytics can help influence strategies for recruiting, training, and retaining talent in your organization.

According to People Analytics for Dummies author Mike West, the term “people analytics” was derived from Google’s reference to Human Resources as People Operations and, thus, the associated analytics “people analytics.”^[2]

Google, who West notes aspires to make all management decisions using data, formed its first formal people analytics group in 2007. The insight point is key to understanding the purpose of people analytics.

Although the terms “people analytics,” “HR analytics,” and “workforce analytics” are often used interchangeably, people analytics is the broader or umbrella concept for data science in a business context. In practice, however, the ideas are the same, which is to integrate data to improve decisions that have historically been made based on people’s experience and intuition.^[3]

The first instance of a group focused on Human Resource-specific analytics is believed to be the “HR Decision Support” team formed by pharmaceutical maker Merck in 2001. Although people analytics as a practice has been in existence for approximately 20 years, organizations adoption of associated tools and processes is still far from maturity—a point we’ll explore in this course.