Capability in Focus: People Analytics

In the early 2000s, I spent a few years working on a product to help organizations translate transactional HRIS (HR information system) data to usable scorecards and dashboards. The technology was groundbreaking at the time, involving massive data extracts and processing protocols, Cognos cubes that precalculated every possible data filter and crosstab, and a web-based delivery system that was only as fast as the organization’s connection (in 2002 this was . . . not fast). 

At the time, a lot of organizations were struggling to calculate basic people data like number of internal transfers, HR staff per FTE, or even accurate real-time headcount. This tool helped alleviate some (but not all) of the technical barriers around people data and helped raise the visibility of key people metrics for the organization. But as these barriers were reduced, the people capability challenges became more evident. The goal was to use HR metrics to help drive decision-making at all levels of the organization, but the HR teams weren’t used to having access to this information, and in many cases weren’t equipped to confidently use the data to partner with the business and help make decisions.

Today, people data is more easily accessible than we dreamed of back then (though there’s still a ways left to go). Line leaders now look to HR data to help manage their business and an entire discipline of people analytics has become a critical part of the way HR operates. But to this day, when I talk to HR leaders about the highest-priority development needs for their teams, the ability to understand and use people data is at the top of the list. And so we decided to dig a little deeper into this capability area.

Drawing Industry Insights on HR Capability

We launched the Global HR Capability Assessment as a pilot in May 2020 and began formally offering it to all Josh Bersin Academy members in March 2021. To date, nearly 5,000 HR professionals from companies spanning all major industries, geographies, and sizes have used this tool to catalog and benchmark their knowledge, skills, and experience in critical HR domains. The assessment offers each participant targeted learning pathways based on their greatest developmental priorities.

Users aren’t the only ones to benefit from the assessment; their companies benefit as well. HR leaders from participating organizations can review and benchmark their participants’ results to better understand if they have the right capability profiles in the right roles to meet business needs. But beyond the individual and organizational benefits of the assessment, we’re most excited about the opportunity the data provides to better understand current capability trends, coverage, and needs across the HR field broadly. 

Current State of People Analytics Capability

Of the 5,000 global HR professionals who have taken the assessment, one in five identified people analytics as a top priority for their development in the coming year (second only to change and transformation, which was a priority for a quarter of respondents). However, current people analytics capability is also the second highest performing of the 20 areas we measured. HR professionals are reporting relatively strong capability in this area, yet they are prioritizing building even broader capability.

When we ask HR professionals to assess their capabilities, we use a five-point scale that directly relates to their knowledge, skills, and experiences in each capability. The scale ranges from Novice (“I’ve never done this and may not even know what it is.”) to World Class (“I’m a leader in this field and could write a book on this.”). The Intermediate level is the third point on the scale and identifies those who have done this work and can confidently do it again. When we’re looking for professionals with solid current capability in an area, we typically look at those at the Intermediate level and above.

People Analytics Capability Distribution for HR Professionals

Source: The Josh Bersin Company, 2021.

Looking at the capability-level distribution across the domain, there’s a good amount of variation across different people analytics capabilities. The strongest areas center around using analytical tools (including Excel), consulting, and using data to drive decisions. However, more data-centric capabilities like performing statistical analyses, managing data privacy and ethics, and using advanced analytical techniques are much lower, with more than half of respondents reporting capabilities below the Intermediate level.

With this in mind, organizations should consider which people analytics capabilities are most important for subject matter experts and the people analytics function vs. which are a priority for all HR professionals. As technology increases the scope of possibility, the diverse set of analytic skills needed to succeed in many roles also expands. Across the scope of HR functions, who needs to be able to perform statistical analyses and who needs to understand, contextualize, and communicate these findings? To some extent, the answer will depend on the HR operating model and how data is accessed, analyzed, and used within the organization. 

People Analytics Capability Across Roles and Functions

Bearing in mind that different HR functions will require and use analytics capabilities differently based on their role, we next looked at the distribution of people analytics capability across different HR functions. The function with the greatest proportion of respondents reporting Intermediate or higher capability was, not surprisingly, people analytics. However, we also found stronger capability among those in a strategic/leadership role, as well as in several areas with more quantitative responsibilities, such as compensation and HR technology. We also found stronger analytics capability in global mobility teams. 

People Analytics Current Capability Compared to Developmental Prioritization

Source: The Josh Bersin Company, 2021.

When we compared each function’s current capability with the percent of respondents prioritizing people analytics development, those areas with the highest-current capability were also those who most wanted to further develop this area. Perhaps this is less surprising than we might think. HR professionals whose jobs require this capability are most likely to have it, but they also are most acutely aware of how much more they can know and the need to continuously develop this capability. 

Perhaps more surprising are the functions less likely to prioritize people analytics. HR business partners play a critical role in identifying and acting on the people implications of business units’ strategies and needs. But business partners report lower capability in this domain relative to many other functions, with nearly half (47%) of business partners below Intermediate, meaning they are not regularly and confidently doing this work. 

HR business partners are the face of the newly available people and business data, and they need to be consistently and effectively bringing these insights to their conversations with other business leaders in the organization. But do they need to have deep statistical expertise? We know these are difficult skills to build, and success does not necessarily mean making a stats expert out of every HR practitioner. However, every HR practitioner does need to build comfort and facility in core HR and business data, metrics, and analyses, and communicating the implications throughout the company.

Implications for HR Professionals

Here are some actions HR professionals and leaders can take to get started on the path of accelerating people analytics capabilities.

Source: The Josh Bersin Company, 2021.

As technology continues to evolve, real-time access to accurate people data is becoming less of a barrier. The challenge ahead is for HR capabilities to keep pace with what is possible and to ensure we are effectively using the available data to best inform and support HR and business decisions.

Learn more with these resources:

• Visit our website to learn more about the Global HR Capability Project
• Watch my video detailing the Global Capability Assessment and in-depth discussion.