10Minutes
on people analytics
Why insights about
your people should
play a part in every
business decision
Inside this issue
At a glance: Four ways people analytics can
shape strategy.
01: From product launches to new growth
plans, how insights about your talent impact
the whole business.
02: Three common barriers in the path to
finding real value in data on your people.
03: How to create a people analytics capability
that reaches every business process.
04: Shift the culture so leaders seamlessly use
people analytics in their decisions.
While many business leaders believe theyre
making the right moves to become a data-
driven enterprise, they often ignore a crucial
piece of the puzzle: people analytics, which are
insights derived from a companys talent data.
After all, its the rare business that doesnt
depend on data to inform big decisions. For
example, to learn if customers are likely to
buy a new service, you look to past purchasing
behavior. But why not also analyze people data,
like the sales teams skills and engagement
levels? This may tell you if the teams equipped
to deliver on the goalwhich can be as crucial
to success as understanding customer demand.
The majority of CEOs acknowledge their
employees have a high impact on business
strategy.1 And people analytics are the way to
tangibly see and shape that impact. Yet people
insights are often missing from even routine
activities, like quarterly business reviews.
Most companies have yet to make the
investment to act on people dataand if they
have, they relegate the practice to HR. But its
time for business leaders to accept a new role. In
an era of big data, your business should invest in
using data about your biggest investment of all.
1 PwC, 2016 US CEO Survey.
2 Project Management Institute, Rally the Talent to Win:
Transforming Strategy into Reality, 2014.
March 2016
Getting the most value out of your most
valuableasset
Integrating people analytics into core business
activities enables you to better:
1. Execute strategy
Forty-seven percent of executives said
its a long-term challenge to determine
the people they need to support business
strategy.2 On average, talent deficiencies
undermine strategy 40% of thetime.3
2. Account for the real costs of talent
Your workforce is the single largest annual
investment for most companies, at more than
30% of revenue.4 Regularly reviewing people
data, like hidden labor costs and turnover
trends, can bring to light issues thatve held
back your business, or opportunities where
your people could work more effectively.
3. Maximize your people investment
Despite a drop in labor costs per full-time
employee, in 2014, companies earned
less revenue on people investments. And
employee turnover, including that of high
performers, has reached the highest levels
since 2011.5
3 PwC and Project Management Institute, Talent Management:
Powering Strategic Initiatives in the PMO, November 2014
4 PwC analysis, Focus on Five series, 2016.
5. PwC, Trends in People Analytics, 2015.
At a glance

At a glance How people analytics propel the business

Big business decisions dont commonly include people analyticsbut they should.
Here are four examples where unlocking people data possibilities can shape your
strategy and help you make more informed decisions

as part of your strategic

business plan to stimulate
innovation:

Can you identify the talent

as part of your annual sales
in your operating plans to
strategy to create unique
grow and create competitive
customer experiences:
advantage in a new country:
Should you support the expan-
sion with expatriates? How do
you best repatriate them?
Can you build a team with
the cultural dexterity and
local know-how to hit
growthobjectives?
Do you have enough people
prepared to work with new
processes and technology?
How can you ensure your
teams uphold safety and
quality standards?
in quarterly reviews to align
costs with business strategy:
Do you have enough
manpower and the ability to
ramp up or down to address
market fluctuations and
changing customer needs?
Is your sales force structured to
best deliver the new sales goals?
How do you keep people
engaged in the midst of
intense work demands?
you need to develop or hire
based on your business goals?
Are you developing both
How accurately can you
Producer and Performer
project next quarters
talent to be successful?
laborcosts?
How consistently do your
What options do you have to
leaders share top talent with
control labor costs besides
the rest of the organization,
blanket hiring freezes? Which
both locally and globally?
have the best returns?
Do you know which roles
What hidden costs might
are most pivotal to your
result from turnover or the
organizations success?
aftermath of workforce
reductions?
01
The power of people At a recent workshop, we didnt hear the common
trope of HR gaining a seat at the table; rather,
retain high performers, who were crucial for keeping
the business on track for three-year sales objectives.
analytics in your one executive said, people data is now buying a And they treated the internships as business
seat at the table. Here are two examples where priorities to accelerate their peoples potential.
biggest decisions people analytics made a real difference in a business
initiativenot an HR one. Gearing the business for growth

Pivotal in a product launch A B2B agencywhose core product was its people
suffered high turnover, threatening its ability to
At a Midwest-based technology company, creating serve clients and meet growth goals. Face-to-face
a new product to meet Wall Street growth exit interviews indicated most employees pursued
Will your talent strategy help or hinder business? expectations meant redefining delivery. Leadership better opportunities elsewhere, so leaders
Lacking mature talent practices, such as analytics use among wondered: Would there be enough talent for new assumed compensation wasnt competitive and kept
leaders, is costly senior-level technical roles, especially if product increasing budgets. Yet turnover continued.
demand met projected sales goals? As the company
35% 40% prepared for the transition, they discovered a To understand what was going on, the organization
put a people analytics pilot in place and enacted a
of execs
the average problem: There werent enough employees to take
say talent
amount of on elevated job responsibilities. formal, quantitative survey with every departure to
deficiencies collect anonymous, standardized data. For the first
time that talent
heavily
hampered
deficiencies Looking closely at people data formerly confined time, it identified the roles that drive the most value
undermine
more than
strategy
to HR, business unit (BU) leaders learned that for the agency, then analyzed how top performance
1/2 of recent internships were talent feeders that moved people correlated with pay. This focus unveiled surprising
implementation
strategyefforts
up from junior roles to mid-level roles and on to findings: The most pivotal roles werent senior
senior-level positions. But unwritten HR practices vice presidents, but rather the managers and
but investing in them brings payoff: inhibited upward talent flow by capping raises at directors who led the client experiences. And high
85% of executives with mature talent processes see
10%. As a result, high performers didnt take on new
responsibilitiesand managers didnt promote them.
performers in these roles didnt leave for more
money, but for better work/life balance and fewer
above-average financial performance
monotonoustasks.
77% see better strategy implementation Historically, these issues wouldnt have surfaced
as concerns. But enabling BU leaders to access and These insights revealed where the company
75% report higher revenue growth understand people data uncovered the real source could invest in the right remedies. So it enacted
of pipeline problemsand how to address them as a flexibility programs, increased career development
Q: How often have talent deficiencies significantly hampered the implementa-
tion and execution of strategy in the last three years? business. Managers enacted development programs opportunities, and incorporated job rotations.
Bases: 548 senior executives; 726 HR and business leaders. to flow needed skills through the company and Instead of viewing these as HR costs, the business
Sources: Project Management Institute, Rally the Talent to Win: Transforming
Strategy into Reality, 2014. PwC and Project Management Institute, Talent
ensure theyd have enough leaders for future product recognized them as crucial investments for long-
Management: Powering Strategic Initiatives in the PMO, November 2014. launches. They adjusted compensation practices to term growth and sustainability.
02
Three factors holding If people data is crucial to the whole business,
why dont companies prioritize it? We see three
For instance, when readying for a change initiative,
leaders arent typically required to know which
you back from real commonmistakes: employees are the most impactful in aiding the
spread of corporate communications. Theyre not
value in people data 1. Questions asked about talent are too simplistic. held accountable for changing group dynamics if
Today, many business leaders limit their thinking 25% of their new hires leave in the first year.
about people data to merely headcount: How many
Leaders dont feel accountable for these and therefore
people do I need? This question is far too narrow, and
dont see the need to change their current business
doesnt take into account people data like employ-
processes to incorporate people data, in spite of the
ees productivity, capabilities, willingness to stay,
What people data can tell you
inefficiencies and gaps in historic processes.
ability to develop, and so on.
These sample insights derived from people data can take the 3. People data is confined to a single function.
guesswork out of decision making.
Deeper questions should be considered:
At some large companies, people analytics teams
How do I design jobs to maximize the time people are the fastest-growing part of HR. But the problem
Level of engagement spend on their most valuable activity?
for top-performing with that approach is that it pigeonholes people
employees
Sources where top How can I retain employees when theyre tasked analytics to a single function instead of embedding
employees come from with tedious work for months at a time? the data widely, similar to the way financial data is
Predictions of
and how to find more routinely used throughout a business.
which people What is the right place to physically or virtually
will leave or stay Employee locate jobs? As a result, people data is trapped among a select
preference for few, so the right insights dont always get to those
rewards and How do I minimize risks during a change manage- who need it most. For instance, when a new market
ROI on training and what working styles
development activities
ment program? event or new regulation suddenly creates a talent
are most impactful shortage, theres little data-based discussion among
Forecasts of future Analyzing people data allows you to make fully informed
labor costs, by business decisions on how to inspire stronger perfor- leaders as to what skills are available both internally
quarter and by year
Effectiveness of mance, and yield better return on your investments. and externally to best close the talent gaps.
diversity inclusion
programs
2. Leaders arent expected to use people data in Likewise, during a merger, culture integration is
Value of an effective
global mobility program decision making. considered one of the biggest success factors. Yet
people datasuch as which top performers are
Making strategic moves without factoring in people at risk of leaving, or which reward programs are
data continues to be the norm, as leaders in business most desired by employees is rarely included in
units and support functions often havent used this theconversation.
type of informationand arent required to take
responsibility for using it.
03
How to supply With many companies already committed to broader
data and analytics investments, what does it mean
pipeline is actually used. Also, measure metrics
consistently, such as agreeing if turnover data
people analytics to incorporate people analytics as well? includes part-time workers or not.

tothebusiness
The evolution of people analytics
What does people data look like in your company?
Leading
Analytics is part of all big decisions
Data is automated and integrated
HR business partner sits with business leaders
Predictive modeling in place
All of HR takes action based on business
decisions
Advanced
Data is integrated around employee life cycle
People data includes non-HR sources
HR business partners apply insights
Forecasting in use
Foundational
Core employee data available quickly
Data is credible
HR owns but shares people data
Pre-foundational Data accuracy is
Data lives in spreadsheets questionable
Pulling data is time- Data stays primarily
consuming in HR
Who leads the change?
Whether led by HR, the chief data officer, or chief
information officer, a centralized people analytics
team should work closely with operations, finance,
and other functional leaders to get people data
into the hands of every decision maker. Theyll also
be responsible for data governance, technology
adoption, and shepherding culture change. The
group should comprise full-time employees;
tasking an HR reporting team with people analytics
won'twork.
What parts of the business should you start with?
Rather than compile people data and search for a
way to use it, look at existing business processes,
from supply chain to R&D, and see if they
sufficiently use people data. Typically, they dont.
For example, is the finance function budgeting for
a new innovation group without first assessing
employees' skills?
Is your data and technology ready?
Consider four areas:
Metrics you need: Begin with the basics. For
example, the finance function might start with
turnover rate and labor costs as percentage of
revenue. As a function matures in people data
usage, identify broader people metrics that impact
a business process, like how often the successor
Where youll bring data together: Distribute
data through a central dashboard so leaders can
access and visualize it. Many vendors exist, but
spreadsheets wont cut ityou need software that
lets users access data from both inside and outside
the company. People data may be able to piggyback
onto other existing platforms and eventually
integrate with other functions, like finance andsales.
Incorporating your peoples perceptions:
Examine how to include your peoples sentiments.
Is survey data integrated with your metrics, or
is it held by your survey vendor? Can you more
effectively turn data into insights, such as through
broader distribution or by asking better questions?
Your ability to model and forecast: While many
companies havent yet built predictive models for
people analytics, theyre key for shifting out of trend
analysis and reactive mode. Do you have a model to
understand whose rsums should go on top of the
candidate pile, beyond anecdotal input? Can you
forecast how M&A would impact your people?
Remember that technology is just a piece of the
solution. More important is ensuring the supply
of people data keeps pace with the organizations
ability to use it. Weve seen one bank invest millions
in a people analytics function but fail to see ROI
when leaders didnt understand why they should
alter time-tested processes with new data.
04
Changing how your
people think about
people metrics
Follow the leaders
Outside of identifying and recruiting top talent, the C-suite
isnt heavily invested in making strategic people decisions to
transform human capital.
Identifying top talent internally
Recruiting top talent from outside
the company
Setting talent management
priorities
Forecasting future strategically
important talent requirements
Identifying unmet strategically
important talent requirements
Tracking top talent internally
Coaching/mentoring top
36%
talent within the company
Q: Are C-suite executives at your organization heavily involvedas part of
their regular workin the following?
Base: 548 senior executives
Source: Project Management Institute, Rally the Talent to Win: Transforming
Strategy into Reality, 2014.
Heres how to start the shift required:
1. Admit you have blind spots.
People analytics need full commitmentnot just
the practice of using people data in pockets of the
organization. Weve noticed its often the long-
established, well-oiled business processes that may
be most in need of people analytics. For example,
many leaders annual budgets dont factor in
whether they have the best skillsets or the right
number of senior-level roles they need to support
and deliver on their plans. So its crucial you
acknowledge that a lack of people analytics truly
holds back the business.
60% 2. Quell the desire for direct ROI.
Much like brand success cant be traced to a single ad
55%
campaign, and corporate responsibility investments
cant be linked directly to profits, defining ROI on
46% people analytics is typically not measurable in a
single unit in savings or time. But your business
44% case should address a number of people factors at
playand explain that people analytics real ROI is
41% pinpointing hidden talentproblems.
40%
3. Evangelize changeespecially in themiddle.
Decision-makers are at different levels of the orga-
nization, so don't overlook the role of mid-level em-
ployees. It is not enough for the C-suite to see value
if there are operational leaders stuck in old ways of
thinking. Define what all leader, mid-management,
and staff roles and expectations are, but particularly
focus on the middle of the organization. Weve seen
companies that rolled out the right people analyt-
ics tools, but failed to include mid-level employees
because they feared the change process.
What helps win them over? Share stories of when
people data changed a business strategy for the
better. Or curate the most intriguing learnings from
a sea of data that might otherwise be overlooked.
You might weave people data usage into incentives
programs. Be transparent about how employee data
is anonymized and secured to dissuade any data
privacy worries.
4. Make the tools inviting to use.
Smartphones have trained people to expect
appealing, hassle-free technology. So its important
that your people analytics tools are user-friendly
(extensive training not required), mobile-friendly
(should be just as usable on a small screen), and
accessible across the organization.
Consider consulting a user experience expert on
your internal applications design, as adoption of
people analytics tools requires you to apply the same
standards of experience for your employees as you
do for customers.
Ensure data visualizations are a key output, so
users can easily understand people data trends.
And consider gamification or online simulations
to make the concept of change feel more realistic.
For example, scenario planning could become
more conceivable in a simulation that allows users
to visualize what your company would look like if
turnover spiked or hiring declined.
At a glance

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can help
Authors Contacts
Scott Pollak Shebani Patel
Principal, People Analytics Principal, People Analytics
(408) 817-7446 (408) 817-7445
scott.pollak@pwc.com shebani.patel@pwc.com

Rishi Agarwal Nik Shah

Principal, People Analytics Principal, People Analytics
(408) 872-2544 (703) 918-1208
rishi.agarwal@pwc.com nik.shah@pwc.com

Jeff Hesse
Co-leader, US People and Organization
(773) 251-7132
jeff.hesse@pwc.com

Scott Olsen
Co-leader, US People and Organization
(646) 471-0651
scott.n.olsen@pwc.com

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