The top 5 trends in HR Analytics

Yes, HR is about people. That will never change. But technology and HR analytics are not the enemy of people-focused management – rather they help us understand our people better.

Technology gives us unprecedented insights into the patterns and trends which shape our workforce, and our business.

Research indicates that the HR leaders of the future will be those who understand what technology can do; who know how to mine intelligent insights from the technology, and know how to apply them to their workplace to achieve their business goals.

So what trends do you need to know about? We bring you the top five trends in data-driven HR.

Trend #1: The rising importance of analytics

The rise in the use of HR analytics is one of the top 10 trends in human resources, according to the report, Global Human Capital Trends 2016, produced by Deloitte Consulting and Bersin by Deloitte. The study includes responses from more than 7,000 business and HR leaders from 130 countries.

This prediction is echoed by numerous other reports, including What’s Next For HR in 2016? 11 Trends from HR Leaders, by insight and technology company CEB.

Trend #2: The capability gap in people analytics

While HR and business leaders understand the importance of analytics, there is a distinct lag in capacity to use it effectively.

According to the Deloitte report, 75% of companies believe that using people analytics is important, but only eight percent believe their organisation is strong in this area. In fact, people analytics was the biggest capability gap identified by Deloitte, next to good leadership.

Visit the Employee Recognition Hub to learn best practice recognition tips

Trend #3: Dedicated analytics positions

Many large organisations are looking to narrow this gap by hiring dedicated professionals to manage their HR Analytics.

A recent report by Price Waterhouse Coopers found that 86% of survey participants reported that creating or maturing their people analytics function is a strategic priority for the next one-to-three years. And nearly one-half (46%) of those organizations already have a dedicated people analytics function.

How do you know if your organisation can justify hiring a new person to handle your data and analytics? Well, the PWC report found that the median organisation has one individual focused on people analytics per 3,567 employees.

So if it’s so time-consuming, why do organisations bother? Because HR Analytics can tell you things no one else can.

ADP, a major global Human Capital Management (HCM) company, explains: “Companies that want to gain a competitive edge increasingly need to use analytics to gain data-driven insights into workforce trends and take action to refine recruitment, compensation and other performance incentives to meet employees’ evolving goals and interests.”

Trend #4: Beyond operations and compliance

HR Analytics isn’t new. HR leaders have been using analytical tools for years, to analyse metrics such as remuneration, absenteeism and performance and to report on operational issues.

What’s changed is the volume and quality of data collected, and the power of the analytical tools to make sense of this data.

The right HR analytics tools reveal powerful stories about what people are doing at work, who’s linking with who, who are the rising leaders.

They give us evidence-based insight into key questions such as:

When managed correctly, HR analytics can help you make informed decisions about:

who, when and how to hire
who your top performers are, and who are the leaders of the future
hidden skillsets within your teams
which teams are more collaborative or active or engaged than others

Trend #5: Even easy tools now give in-depth analytics

HR analytics is no longer the domain of big multinationals. Even small to medium businesses can benefit from foundational analytical tools.

Think of LinkedIn. Its reporting tools lets you who’s connected to who, which prospective talent has most connections and endorsements.

Redii, the cloud-based employee reward and recognition system, gives you easy tools to analyse and report on rich data. This includes reports on Moments of Recognition, including who got recognised and why; plus reports on allocated points, rewards and user engagement.

Employee Recognition Award Ideas

We reveal which kinds of staff incentives and recognition rewards resonate the most with employees

Employee recognition and staff incentives are now a $46 billion global market, according to research by Bersin & Associates. Companies generally spend between 1-2% of payroll on employee rewards.

And for good reason. Companies with employees who feel appreciated perform better and have a 31% lower voluntary turnover rate.

This means that choosing the right employee recognition awards is now a vital strategic business decision.

Spending money on the wrong incentives and rewards can backfire with real impact on your bottom line.

So which staff rewards work the best? Well to find out, first we need to look at how employees are motivated and what they need to keep performing at their best.

What employees need

For an employee, recognition is not a “want”, it’s a “need”.

Remember Maslow’s hierarchy of needs? The top psychological need a human has is to “belong and feel appreciated”.

Employee recognition, rewards and appreciation do just that – especially when the appreciation is given by peers or in a group setting.

Even the most motivated and engaged employees need regular recognition and rewards to fuel their own intrinsic motivation.

Appreciation vs recognition

While many HR leaders use the terms “recognition” “appreciation”,”rewards”, “awards” and “incentives” interchangeably, there is a difference.

Recognition is generally about public acknowledgement: it’s praising someone for something in front of their peers or another meaningful group of people.

Appreciation tends to be more personal and private. It could be a sincere “thanks”, or thank you note to show gratitude. Our Employee Recognition Hub is a great place where to start if you definetely want to start applying best practice recognition at work.

What are the elements of a good employee recognition reward?

Direct and fast: don’t wait too long before the reward is given or points are redeemed.
Based on specific, repeatable actions or behaviours: make it crystal clear why the reward is given, so others can emulate.
Contained to a specified time period: while recognition programs should be long term, the rewards need to be confined to behaviours during a particular time, eg “Q1” or “March”.
Aligned with a bigger “why”: make sure employees understand why these achievements or behaviour are being rewarded. How do they help us achieve our big exciting goals? Why are these values important?

Cash vs tangible rewards

So why not just keep everyone happy, and give cash incentives? That way people can buy whatever they want, right?

Wrong.

While cash incentives give a clear monetary value, they fail on two counts. First, they don’t provide any “trophy status” – there’s less bragging rights, less excitement from peers and family over a piece of paper or some extra dollars in the bank balance. For most people, money simply gets swallowed up by the mortgage, rent or cost of living.

Compare this to the reward of a paid trip away, which employees will talk about with their colleagues and families for days before and after they take the trip.

Secondly, cash is less enticing because it’s not visually exciting. Our brains tend to store tangible ideas (such as a massage, a dinner out, a trophy) in the right side of our brain. Money is more abstract yet logical, and goes in our left brain. Research shows that we access our right brain more frequently and in more detail than our left brain, so those tangible rewards are recalled more often.

So what’s the best employee reward to give?

The one that people want.

It’s impossible to give a definitive list of rewards which always work better than others. It depends on your employees’ demographics, and the culture of your organisation.

The best way to find out what rewards will inspire your employees is to ask them.

Make sure you ask a truly diverse group of employees, not just senior leaders. Include a wide range of ages, locations, levels and job types.

Manage employee expectations

Of course, people don’t know what they don’t know, and it’s best to give them a guide of suggested rewards and incentives. That way, you manage their expectations and they avoid embarrassment. You can show that a “Weekend trip away” is basically a one night stay at a 3 star hotel, for example, and not an all-expenses-paid trip to Club Med.

Here’s a list of ideas to get you started:

Gift cards (easy and popular, in fact the most redemmed reward)
A hotel stay (name the hotel)
Free parking in the boss’s car spot
Dinner with partner/ family
Team lunch
A must-have gadget (eg Fitbit, fancy iPad case)
Massage (onsite or voucher for local place)
Café/ restaurant breakfast (and permission to come in late that day
Subscription to Netflix etc
Tickets to an event (sports game, concert)

Opinion is often deeply divided over the best employee recognition rewards and staff incentives. What have you found works best in your organisation?