A recent study conducted by HR.com's HR Research Institute (HRRI) sheds light on the current state of people analytics within organizations, revealing both advancements and areas needing improvement. The research indicates that while there is progress in data gathering and evaluation, a significant gap remains in utilizing HR analytics to its full potential. Only 22% of companies feel they are 'very' or 'extremely' effective in maximizing their HR analytics capabilities, pointing to a disconnect between data collection and its application in strategic decision-making.
On the brighter side, the study notes an improvement in data evaluation skills among HR professionals, with 50% now rating their organization's capabilities as 'good' or 'very good', up from 36% in 2021. This improvement suggests a growing competence in handling HR-related data. However, challenges such as integrating business data with HR data persist, with only about 20% of organizations consistently achieving this integration. This limitation obstructs a holistic view of the workforce in relation to broader business goals.
The study identifies three main obstacles in people analytics: integrating disparate data sources (47%), implementing analytics-derived decisions (41%), and distributing and communicating data (33%). These findings highlight the difficulties organizations face in transforming data insights into actionable strategies that drive business outcomes. Debbie McGrath, CEO of HR.com, emphasizes the need for organizations to focus on making data-driven decisions that yield tangible business impacts, beyond just collecting and analyzing data.
The implications of this study are profound for the HR industry and businesses overall. As the importance of data-driven decision-making grows, so does the necessity to effectively leverage people analytics. Organizations that can address the identified challenges may secure a competitive advantage by making more informed workforce decisions aligned with their business strategies. The study underscores the importance of investing in both tools and skills to enhance data integration, communication, and the implementation of data-driven programs.
For those interested in delving deeper into the findings and recommendations, the full research report, HR.com's State of People Analytics 2024-25, is available for free download. Additionally, HR professionals can access a recorded webcast presentation, How to Boost People Analytics Effectiveness in Your Organization, for further insights on improving HR data practices.
