Why HR Analytics is Critical to Employee Experience Success

In an open talent economy, in which job seekers and employees have more choices than ever, companies realize that the war for talent is played out daily through how employees experience their work. Providing the best, most personalized experience is increasingly being seen as a critical differentiator in attracting and retaining highly-talented people.

Making a meaningful impact on employee experience and business outcomes however, requires investing in HR analytics early on in the transformational effort. And that is where organizations struggle.

Too limited visibility into who, how and where to invest

Whereas many organizations herald the potential benefits of an employee-centric HR function (e.g., more satisfied and engaged employees, increased loyalty and retention, higher productivity,…), most have limited visibility into who, how and where to invest.

Some tend to view good employee experience as solely a digital issue, starting their transformation by investing in digital apps and tools. Others have started designing an employee experience strategy or journey maps but haven’t thought about building in data and measurement into the process.

Common to these and other organisations is that HR typically does not invest sufficiently in understanding what a superior employee experience is worth and exactly how it will generate value. As a result, efforts are likely to end up having clear costs and unclear results.

3 ways HR analytics can boost employee experience programs and investments

1. Employee segmentation

Whereas each organization might have an opinion or idea on what characterizes a good workplace, there is precious little scientific certainty around how to build great work environments, cultivate high-performing teams, maximize productivity, or enhance happiness. More importantly, what employees need to enhance their work-related experience may strongly depend on a variety of different factors, including the stage in their career, what kind of work they do, or what motivates them as a person.

Each employee is on a unique journey – and so are the factors that engage or disengage people as they experience their work through each critical phase in the employee lifecycle. Building an understanding of employees that allows for personalization therefore requires integrating and analyzing different types of data (across different touch points) and applying clustering techniques to identify groups of employees with similar needs/preferences or with different drivers of satisfaction across touch points.

2. Targeting and prioritizing investments

Organizations may want to prioritize or direct a greater level of investment to employee clusters that are more critical than others (e.g., because they perform exceptionally well or because they are scarce on the market or business-critical) in order to improve satisfaction, retention and boost productivity of people in those segments.

HR analytics can be used to determine the current and potential value of employees and determine who to target with which initiative, in which channel, and when. Similarly, it can help to proactively determine which employees are at risk of poor engagement or leaving the organization and what tactics are most likely to keep them engaged or want to stay. All these insights can be used to understand where and how to allocate resources more intelligently and maximize ROI.

3. Understanding and demonstrating value

To set priorities and quantify payouts for improving the employee experience, every organization with a program to improve it should be able to link employee experience and satisfaction directly to HR KPI’s and business outcomes. Linking experience and satisfaction data with HR and business metrics will show what works (from an employee or business perspective), for whom (which clusters of employees) and why (which drivers contribute to success). These insights can be used to further inform the development of initiatives.

Using data and applying HR analytics to employee experience management will become the lifeblood of your success. 

Conclusion

Don’t skip this critical focus on data and analytics for the sake of speed. Programs and efforts aimed at moving towards a more employee-centric organization will soon invariably raise questions about how and where to invest in digital, technology and innovation. Without a quantified link to value, such efforts won’t show early gains or build momentum and therefore stall before they ever really get going.

Applying HR analytics will also deliver a significant step towards personalization of employee experience and will provide the insights you need to develop and sustain experiences that truly delight and engage your best employees. A huge opportunity for the HR analytics role! 

This article is the first in a series. Other articles that I've published on LinkedIn on this topic:

The Number 1 Challenge to Data-driven Employee Experience Success and How to Start Addressing it.

Why Data-Driven Employee Experience Should Include a Continuous Listening Strategy