Data Provides The Foundation But People Make The Business

people dataMost decision makers love this statement or various versions of it!

And data is the basis for a majority of transactions in business. And of course there isn’t a dearth of data, is there? “Big Data”, “Real World Outcomes”, small (limited) data, real-time data, structured data, unstructured data and the list is endless.

With “Big Data” being used extensively for predicting trends in the 2012 US Presidential elections, organisations too are looking at using such data positively.

All organisations irrespective of the industry use huge amounts of data to make marketing, demand and supply forecasting, production and sales decisions among others that affect the organisation. Intense analysis of this information leads to smart decisions that give businesses the competitive advantage.

However to retain their competitive edge in the industry organisations need to stay on the top through constant innovation and innovations come through people. In fact of all the organisational resources that competitors can replicate, people and talent are the most difficult. Accurate people management decisions tend to be the most impactful decisions an organisation or manager can make.

However, how do you make people related decisions?

Most managers’ base their people related decisions based on relationships, trust, impressions and gut feelings. Considering the amount of data that is analysed for other functions don’t you think it’s fair then to have some kind of data analysis for a resource that accounts for more than 60% (approx.) of your total cost in most cases?

Now there are those who believe that employees are humans and cannot be compared to the other resources where trends and assumptions help determine a possible outcome.

Humans have feelings & emotions, react differently in various situations and also have behavior patterns that cannot be generalised as their reactions are greatly shaped by culture, upbringing, exposure and predicting the behavior of two individuals in a similar situation is nearly impossible.

These skeptics recommend that organisations should not deal with employees as if they were just another statistic that’s put up on an excel sheet – but then there are also those organisations, like Google & Xerox, who have successfully used people related data to better their employee processes while also increasing employee motivation and overall satisfaction and engagement levels. These organisations today, make important decisions like compensation, talent management, hiring and promoting and much more using people data.

Let’s look at the how some of the significant people processes can benefit from the use of data:

The Hiring Process:

Many organisations have used data in the form of quantitative, qualitative and psychometric tests to select a best fit for their organisation. Though there are different views on whether such pre-hiring intelligence and attitude tests help since they don’t consider the dynamic environment in employees are required to perform in.

Many organisations though, have enough faith in these tests and use them extensively in the hiring process. But people analytics can also be used to profile employees to determine the best fit. Profiling the data of currently successful employees, the organisation can make better hiring decisions based on educational qualifications, prior experience or which institutes to recruit from. Past hiring data could also be checked to find any linkage between the interviewers and their selection of employees who are highly successful in the organisation.

This analysis could throw light on the most appropriate mix for an interview panel for hiring effectiveness and need for improvement of interviewing skills for some managers.


There eternal debate on whether monetary or non-monetary rewards motivate employees can be successfully addressed with data based on how they behave on receipt of either. This will help organisations accrue more benefits from their reward system and ensure a better ratio between monetary and non-monetary.


Analysis of current & past employees’ profiles and attrition data can help determine which employees pose an attrition threat.  This analysis will help design retention solutions that benefit both the managers and employees.

Talent Management

People data analytics can help tremendously in the talent management process. Employee performance & productivity data can help to evaluate the contribution made by the employee to the team or organisation, thus making it easy to identify the critical talent and high performing employees. Eventually this data could also be used to make promotion and recognition decisions.

The above are some examples of how organisations can use people data to make important management decisions irrespective of the size of the organisation and its number of employees. Some of the pre-requisites for successfully using people analytics to aid in managers’ decision-making process are as follows:

  • Availability of data: It’s essential to not only have a large amount of data spanning across many years, but also have accurate data to make valid predictive analysis for future trends. The organisation also needs to ensure the relevance of the available data to the current industry and organisation landscape in order to ensure the analysis relates to how the various elements play out in the current situation.
  • Futuristic Trends: To ensure constant innovate organisations need ideally should gather data about future scenarios rather than relying just on past trends. Hence the available data should be representative about the futuristic trends rather than analysing the past.
  • Dedicated manpower: With the massive amount of data at the organisations disposal, it’s essential to sift through the hay to find the needles. To this effect, organisations may need to hire a team consisting of psychologists, data miners and MBAs to do justice to the data and make it appropriate for the intended use.

Its essential to note that though it could be used for better management, organisations will really need to make a sizeable commitment in terms of resources and time. Apart from using people analytics in processes mentioned above, organisations like Google use it for almost all people linked decisions like leadership, training, learning and collaboration as well.

To conclude, we can say that though people related data could strengthen the effectiveness of organisational processes and management decisions, it’s essential to keep in mind that we’re dealing with human beings. And it is difficult to have a fool-proof predictive model when it concerns human behaviour. These predictive analysis and algorithms empower managers with statistical evidence to support their instincts and perspectives.

Many Thanks

Mark Williams

Head of Training and Development

MTD Training   | Image courtesy by watcharakun of FreeDigitalPhotos.Net

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