CHAPTER 57

Talent Development’s Role in Aligning People Analytics With Strategy

Larry Wolff

According to Gartner HR, “People analytics is the collection and application of talent data to improve critical talent and business outcomes. People analytics leaders enable HR leaders to develop data-driven insights to inform talent decisions, improve workforce processes, and promote positive employee experience.” Today, people analytics apply artificial intelligence, machine learning, and data visualization techniques to large databases of talent information. The result is better informed decisions throughout the workforce life cycle.

The term business outcomes is critical to Gartner’s definition of people analytics. The impact on business outcomes is what separates a great talent development team from a good one, and that is what we will explore here.

Strategic Business Outcomes

Having spent much of my career in digital transformation and strategy management (the marriage of strategy and execution), I have seen countless businesses that dream up a strategy that they have no coherent way to execute or ability to measure. I also see many transformation efforts fail because of a technophobic culture and fear of change. These are challenges that talent development must consider, plan for, and overcome to successfully embed people analytics in the organization.

The purpose of strategy is to protect and extend our differentiators. You do this by developing:

•  Customer-focused objectives

•  Related process improvement objectives

•  Organizational objectives that address people, tools, systems, and data

Talent development translates those strategic objectives into measurable goals and action plans. Then, they carefully manage the execution and measure the results.

Alignment with the company strategy and understanding how to measure the impact of people analytics are key challenges for talent development. Here are some important tips on how to embed people analytics in the company strategy so that talent development can have a much greater impact on the business than ever before.

Enhancing Strategy With People Analytics

When talent development studies the company’s strategic objectives, it can contemplate how people analytics will help achieve those objectives. This next part is key. You collaborate with business leaders, managers, and staff across the organization to help them consider decisions and internal processes based on the insights the TD function gains from people analytics. The business managers can then update their goals in the company strategy to reflect these process improvements.

Many talent development teams still only consider the impact of people analytics on hiring and talent development. But few can objectively measure the strategic business impact. It is talent development’s role to not only apply people analytics, but also measure how the results influence the customer experience, employee experience, and top and bottom lines. You achieve that by collaborating with leaders, managers, and staff across the business.

Strategic Impact of People Analytics

People analytics are commonly used to improve hiring, guide and track training, and improve retention. They help you identify top talent and understand career pathing, anticipate skills gaps and talent shortages so you can be more strategic in your talent acquisition decisions, and understand why employees leave so you can drive down the cost of attrition. These all affect the company’s financial results. Much of that impact can be felt outside HR and within business operating units. It is up to the talent development team to bring it to light and influence change across the organization.

Here is an entertaining story to demonstrate how my TD team helped a large insurance company through people analytics a few years ago. The company was shifting into a digital transformation and needed data science and other related skills to execute that strategy. So, I was asking about the business strategy so we could align specific services. When we reviewed our online people analytics platform, we discovered that the company’s geographic recruiting area simply didn’t have the people it needed. It turned out that a few small insurtech startups were scooping up these people. In that moment, the insurance company changed its strategy. It decided to acquire one of the insurtech companies rather than spending a year or more trying to recruit talent that may not exist. This small element of people analytics had a dramatic impact on the company’s business outcomes because it allowed it to accelerate its digital transformation.

Impact of People Analytics Beyond HR

Talent development needs to look beyond hiring, training, and retention. You need to focus on how people analytics may change business processes, improve the customer experience, and give your business a sustainable competitive advantage.

If the manufacturing team suffers from poor quality due to high turnover, talent development can use people analytics to understand the root causes of that turnover, which may lead to improvements in training and changes in business processes. The team can also drive better hiring decisions, which will reduce turnover and improve quality. Thus, it is not just about the people analytics you deliver, but also the process improvements they enable.

While the data may pertain to hiring, training, and retention, talent development needs to demonstrate how the application of people analytics and the improvements it drives will have a measurable impact on the customer, employee, and business outcomes. These improvements should be embedded in the company’s strategic plan, not by talent development but by the business leaders that apply the people analytics.

Talent development is the facilitator of the analytics, and the business leaders are accountable for the results. That is a very important point.

Keys to Implementation and Adoption

Several steps are required to implement or adopt a people analytics effort. Use the strategy map in Figure 57-1 to guide you. Note that while strategic objectives are defined from the top down, they are then refined from the bottom up. Talent development contributes to the organizational perspective at the foundation of the company strategy by introducing people analytics. Collaborating with business leaders, you then define process improvements that are informed by people analytics. Those improvements enable you to make the changes your customer requires, resulting in improved financial outcomes. You can download this template from the handbook website, ATDHandbook3.org.

Define People Analytics in the Context of Your Business

The first step of mastering people analytics is aligning with the company strategy. The strategy should begin with customer-facing objectives, followed by specific internal processes that you need to start, change, or stop to deliver on the customer objectives. Talent development then looks at the organization and examines the structure, skills, tools, and culture. This is where you need to have a strong voice in shaping the strategy.

The organization layer builds the very foundation of the strategy. Any flaw in the organizational components will diminish your ability to execute the internal processes that your customers need.

When talent development translates the objectives (customer, process, and organization) into measurable goals, you must consider people analytics. This is one of the most important and impactful roles of talent development.

You can refine the process improvements in the company strategy to exploit people analytics. Can the company develop the needed skills or does it need to hire or outsource them? And how will that affect the timing of process improvements? How will you retain key talent to reduce turnover and improve the customer experience? What do people analytics tell you about training requirements and how they will affect the company’s financial results? In general, how do analytics drive changes to company processes and, more important, can you influence business leaders to make those changes?

Can you imagine ways in which people analytics may improve your customer experience and employee engagement? The TD function can brainstorm these ideas with leaders in HR and across the company. You will be amazed by the creative ways in which people view their business functions once they see what is possible with people analytics.

All these questions should translate into how people analytics will enable the company to improve the customer experience and business outcomes.

Master People Analytics Across the Organization

People analytics are only as good as the people who use them. If nobody embraces people analytics, then you’ll gain no value. Engaged users translate to great value. People tend to dislike change—and forget about change that uses technology. Throw in some heavy analytics and you’ll really scare some people.

So, how does talent development get people across the business excited to adopt people analytics? You need to embrace all available change management resources, including contracting outside expertise to coach your team through the rollout. You also need to recognize people’s apprehension. Some of your colleagues may be afraid of technology. Others may not trust the numbers. Yet others may resist changes to their organizations and processes.

Once again, linking the initiative to the company’s strategic plan is an important first step. When executive leadership underscores the importance of people analytics, management and staff will pay attention. It is also important to educate the entire company slowly and carefully. Take the mystery away. Show how people analytics will not only help you delight your customers by providing what they need, but also make people’s jobs better and more rewarding.

Employees want to understand their role in the big picture. They want to know how their work influences the overall strategy. Help people personalize the experience, relate to the role of people analytics, and understand how it will improve their ability to contribute to the big picture.

Finally, train, train, and train. Teach the company how to interpret analytics. Help them understand where the data comes from and, in simple terms, how it is crunched. Build their confidence in what the analytics tell them and let them know it is OK to occasionally challenge the data.

Change the Culture of the Organization

Talent development, through people analytics, should change the culture of the company in two important ways:

•  By building a data-driven culture, the company shifts from gut reactions or emotional responses to well-informed decision making. People also become more inclined to challenge one another to prove their assumptions. And they develop better ways to measure results.

•  By building a certain level of technical proficiency, the company can leverage technology more and more to create a differentiated customer experience. This is critical in today’s digital age.

Talent development must take the lead on cultural change. You can explain the benefits, coach people through the changes, share success stories, and demonstrate the business benefits derived from the adoption of people analytics.

Engage Marketing and Corporate Communications

Talent development has a job: developing talent. It is not marketing, and it is not internal communication. You will need your colleagues in other departments to help you manage the change that people analytics introduce. Use these resources to communicate frequently and tailor the messaging to the audience.

Here are some tips on communicating the changes driven by people analytics:

•  The board may want brief progress updates.

•  Executive leadership wants to know about risks, adoption rates, and adherence to budget.

•  People managers likely need the most communication because they will probably be the top users of the analytics.

•  Staff need to know that talent development is not playing big brother but, rather, is using data to improve their jobs, engagement, and development.

Utilize change managers, if you have them, across the organization. And work closely with marketing, corporate communications, and influential end users to reinforce that change is here and is wonderful.

Use Performance Objectives

A key to the adoption of people analytics will be to measure staff at all levels on how they use the analytics and the results they deliver. If talent development believes they can reduce the time a requisition is open by 20 percent, put that in the performance goals for your recruiters and recruitment managers. If you determined that you could reduce undesired attrition by 15 percent through targeted training, build that into the training team’s objectives. Understand how people analytics will improve internal processes in various parts of the company and measure how that will influence the customer experience and financial results. Measure individuals across the company on the metrics that are stated in the strategic plan.

Of course, performance management is outside the scope of talent development. Just as you need to partner with managers and staff across the company’s operating units, you also need to coordinate across HR to help implement performance objectives and the policies and processes that reinforce the adoption of people analytics.

Identify Tools

Talent development needs to seriously consider the goals of the company and use them to define the requirements for people analytics software. Do you invest in Tableau or is Lattice a better fit? Do you like the SplashBI reports or can you do more with Sisense? You know the answers only when you understand the company’s strategic goals and can match software features to those goals.

Do not be distracted by a pretty user interface and colorful dashboards. Understand precisely what you want to achieve and have the vendors demonstrate how their products will satisfy your needs. Work with the IT department to ensure compatibility with existing systems, verify security, and support the installation.

Justify the Investment

Once talent development understands the goals and how a software package will help, the team should shift its focus to documenting the return on investment. Accounting can help break down capital costs versus operating expenses and amortization. That is the easy part.

The real fun, and I do find this to be fun, is evaluating how your people analytics will influence the employee experience, employee engagement, and, ultimately, the customer experience. This can then be translated into cost savings and revenue-growth opportunities.

Cost savings may come in the form of reduced recruitment costs, reduced cost of attrition, or increased productivity of a better trained staff. Savings will also come from the process changes across the business that are informed by people analytics. Revenue opportunities may include reduced product development time, faster speed to market, or more creative ways to serve your customers. People analytics can directly or indirectly affect all of these.

Meet with organizational leaders, department heads, and staff. Let them drive the ROI analysis. They must own the results and be held accountable for delivering the desired business outcomes that are enabled through people analytics.

Own Implementation

Talent development will own the implementation of people analytics but will engage the help of others. Marketing and corporate communications play a role in the change management process, which begins long before implementation of any software tools. IT will surely play a role in software installation and security. And your operating units need to be involved in the application of the analytics.

Remember that every change initiative, transformation, system implementation, or other disruption will have its peaks and valleys. Talent development needs to manage expectations at all levels of the company. The implementation project will take on a personality with emotional highs and lows, just like in any other change.

Recognize and reward achievements. Watch for the first person to alter a business decision based on the new analytics and send them to a nice dinner. Reinforce positive behavior and nip negativity in the bud. Word will get around and people will adapt.

If the implementation feels like it is going off the rails, acknowledge it and discuss the actions required to recover. And let everyone know when the project turns the corner and is back on track.

These peaks and valleys are a recognizable phenomenon in any significant initiative. Anticipate them, communicate, and let the company know that everything will be OK.

Make It Actionable

Talent development should have already embedded people analytics in the company’s strategic plan and worked with managers and staff to identify the process improvements that are anticipated as a result of what you learn from the analytics. During implementation and as you develop the analytic reports and dashboards, you need to remind your business colleagues about the objectives in the strategic plan.

It is easy to lose sight of your goals when you are in the thick of an implementation. Check in periodically with your colleagues. Verify that the business outcomes you anticipated are still likely to materialize. Make sure the analytics are delivering the expected insight. And make changes, as needed, to keep the implementation on track with the strategic goals.

Measuring Business Impact

Remember that the whole point of people analytics is to drive better business outcomes, and it is the responsibility of talent development to make sure that happens. So how do you measure the impact before, during, and after implementation?

Before you implement any people analytics solutions, talent development will examine the company’s strategic plan to identify where it could improve the customer experience, employee experience, and the top and bottom lines. You’ll then collaborate with business managers to establish metrics and introduce improved processes that enable the company to achieve the desired results.

During implementation, talent development will check in with managers that are using people analytics and ensure that they are maintaining their focus on the critical strategic outcomes. A gentle reminder of why everyone is doing this work often goes a long way.

The most important measurements come after implementation and are ongoing. The company won’t always see the results of people analytics immediately because it takes time for talent decisions, process improvements, and cultural changes to settle in. It is, therefore, crucial that talent development continue to track the metrics you established during the initial strategic planning stage.

The expectation is that the investment in people analytics will be far outpaced by the return. Are the financial impacts always directly related to the work that talent development did? Not necessarily. But did that work enable others to introduce better business processes, hiring practices, training, and other improvements? Absolutely. Would those changes have happened without people analytics? Probably not.

So, talent development needs to work with business leaders to establish metrics and track the results on an ongoing basis. This will also inform you when it is time to add, change, or delete analytics as the business matures in its application of, and reliance on, people analytics.

Final Thoughts

The role of talent development in people analytics goes far beyond just the implementation and decisions that follow within HR. Success depends on definitive strategic alignment, careful implementation, and ongoing tracking of business outcomes. You will find an implementation road map on the handbook website at ATDHandbook3.org.

A successful people analytics deployment puts talent development in a leadership role in the company. The analytics that we align with the company strategy will drive critical decisions, improve internal processes across the company, and, ultimately, improve the customer experience—which gives the company a competitive advantage in the markets they serve.

About the Author

Larry Wolff is the founder and CEO of Wolff Strategy Partners, a boutique consulting firm specializing in enterprise strategy management and digital transformation. Larry has served as CEO, COO, CIO, CTO, chief digital officer, and management consultant for public, private, international, and emerging growth companies. He devoted more than 12 years of his career to higher education and corporate training and has worked closely with human resources organizations for more than 20 years to innovate and deliver breakthrough results. His specialties include corporate and IT strategic planning, technology-led business transformation, business and IT turnarounds, merger integration, and large-scale project rescues. His methodologies have spanned industries and scaled to companies of all sizes. You can learn more at WolffStrategy.com and reach Larry via email at [email protected].

References

Gartner HR. n.d. “Definition of People Analytics.” Gartner Glossary. gartner.com/en/human-resources/glossary/people-analytics.

Guenole, N., J. Ferrar, and S. Feinzig. 2017. The Power of People: Learn How Successful Organizations Use Workforce Analytics to Improve Business Performance. Upper Saddle River, NJ: Pearson FT Press.

Van Vulpen, E. 2019. The Basic Principles of People Analytics. Rotterdam: AIHR.

Wolff, L. 2014. “The Paradox of Business Intelligence: How to Prevent BI from Crippling Your Business.” Wolff Strategy Partners, March 5. wolffstrategy.com/strategic-planning-facilitator/paradox-business-intelligence-prevent-bi-crippling-business.

Recommended Resources

Becker, B., M. Huselid, and D. Ulrich. 2001. The HR Scorecard. Boston: Harvard Business School Press.

Duarte, N. 2019. DataStory: Explain Data and Inspire Action Through Story. Oakton, VA: Ideapress Publishing.

Edwards, M.R., and K. Edwards. 2016. Predictive HR Analytics: Mastering the HR Metric. New York: Kogan Page.

Waters, S.D., V.N. Streets, L. McFarlane, and R. Johnson-Murray. 2018. The Practical Guide to HR Analytics: Using Data to Inform, Transform, and Empower HR Decisions. Alexandria, VA: Society for Human Resource Management.

Wolff, L. 2021. The Authentic C-Suite Guide to Digital Transformation. Scottsdale, AZ: Wolf Strategy Partners. wolffstrategy.com/the-authentic-c-suite-guide-to-digital-transformation.