As the business landscape continues to evolve, Human Resources has gained more clout in driving business strategy. However, to truly take a seat at the table, HR leaders need data at their fingertips.
So far this has proven challenging. According to research published by McKinsey, 90% see analytics as a core component of HR strategy but just 42% currently have a data-driven HR function.
So, how can people analytics drive better service delivery, smarter decision-making, and more strategic alignment between HR and the business?
In this article, we’ll break down how to go from thinking people analytics is a good idea — to actually using analytics to get better business outcomes at every stage of the employee journey.
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People analytics is about taking a data-driven approach to assessing and improving all your People processes. People analytics lets you get really granular in understanding your people, what motivates them, what affects their performance, and why.
There are four interconnected fields of people analytics — descriptive, diagnostic, predictive and prescriptive.
These types of analytics become especially powerful when tied to specific journeys—like onboarding, promotions, or offboarding—so HR can identify where friction exists and redesign the experience accordingly.
It’s a bit like diagnostic medicine. Your doctor first listens to your description of your symptoms, examines you to diagnose the cause, and uses their past knowledge to predict the probable progression of your condition. With that information to hand, they can then prescribe the best treatment.
Not all businesses will need to apply all four approaches. But to see how people analytics can transform the workplace, HR teams should widen the lens and look at how to action people analytics across the whole employee experience.
Applying a data-driven mindset to the People function can transform the way you work — and let you take a seat at the leadership table, instead of acting purely as an internal service provider.
Data on recruitment processes — such as hiring patterns, onboarding effectiveness, or the frequency of one-to-ones with managers — can be very valuable.
These insights allow HR to orchestrate better journeys—streamlining recruitment steps, automating onboarding workflows, and resolving friction before it affects retention.
Some suggested metrics to capture:
People analytics can help HR teams be more efficient, fill skills gaps and strengthen both employee and organizational performance.
Whether comparing benchmarks for expected performance with real-time outputs, or aligning talent pipeline data with employee skill sets, clear actionable evidence helps HR teams get to the root of any issues.
Abhishek Shah, CEO of talent assessment platform Testlify, explains how people analytics has impacted their performance culture:
“By identifying high-performing individuals and teams, we have been able to allocate resources strategically, recognize and reward exceptional performance, and foster a culture of continuous improvement.”
Suggested metrics:
Measuring the value, impact and cost-effectiveness of learning and development interventions is vital.
So is understanding the learning needs of your employees.
This means identifying skills gaps, which L&D approaches can address those gaps, and what learners will find engaging and valuable.
Suggested metrics:
In the era of the Great Resignation, companies need to understand what’s driving attrition.
Are there any patterns, such as higher turnover in certain departments, or among different age brackets or genders?
Are employees motivated and satisfied at work?
Being able to answer these questions helps companies take the most appropriate action.
“Combining quantitative data with qualitative feedback—via embedded surveys or interaction-level analytics from platforms like Applaud—lets HR pinpoint where to intervene, without waiting for a crisis.
Suggested metrics:
Key to that employee sentiment is feeling included and welcome in the work environment, regardless of individual circumstances.
It’s crucial that HR teams track and analyze the diversity, equality, inclusion and belonging (DEIB) elements of the employee experience.
According to McKinsey, for the majority of companies, DEIB is one of the top 3 areas where people analytics is adding the most value.
“People analytics has played a pivotal role in driving diversity and inclusion initiatives within Testlify,” says Abhishek Shah. “By comprehensively analyzing demographic data, performance metrics, and other relevant factors, we’ve been able to identify potential biases in our processes, implement corrective measures and create a more inclusive work environment.”
When DEIB metrics are layered into broader people analytics—rather than tracked in isolation—organizations gain clearer insight into systemic issues and can respond with targeted, inclusive policy or journey updates.
Suggested metrics:
According to HR expert David Green, “You’ve got to take quite complicated insights and turn them into a compelling story that drives action you can then measure.”
Here are some questions to ask to help you gather the ingredients and tell your People story.
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In this dispersed and digital world of work, it’s never been more important to understand your people — your employees, your leaders and your teams — and what they need.
People analytics is invaluable for sustaining a personalized employee experience that delivers organizational success.
By capturing data and leveraging it effectively across all People processes, your HR teams can drive real improvements in talent acquisition, employee engagement, performance and productivity.
Book a demo to see how Applaud helps HR teams turn people analytics into action—streamlining service delivery, improving journeys, and driving more strategic HR decisions.
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