Why Now?

People analytics is not a new phenomenon. The study of people at work has been around for hundreds of years and has long been studied in fields such as management science and industrial/organizational psychology. Many companies have provided reports and metrics about the people who work in their organization for decades. However, the increasing accessibility of data about people, the availability of tools and technology, and the shift in expectations from organizations and employees are new advancements that have led to the rise of people analytics as a function and career field.

The evolution of people management in the workplace led to the creation of the Human Resource (HR) function. A function that first provided only personnel services before evolving to operational services in the ‘80s and ‘90s and then to talent management in the 2000s. Now we find ourselves in a new era where HR functions are strategic partners in business decisions that drive high-impact strategies with an emphasis on data-driven decision-making. As a result, the needs of HR began to include data, analytics, and a heavier reliance on technology systems. In many organizations, this is where the term “people analytics” first began to pop up in the 2010s. Toward the end of that decade, we saw the number of teams devoted to understanding people data in organizations grow more than 4x from 2016 to 2019 (based on research from Thomsons Online Benefits). By 2023 a LinkedIn study identified the “HR Analytics Manager” as the second fastest growing job in the United States over the prior 5 years. People analytics (and its similarly labeled titles) have seen an exponential jump in interest in the last decade – as you can see in the chart below which displays the number of times terms related to people analytics were searched for on Google globally each year.

The role of HR professionals has been changed forever. It is no longer a career field free from numbers and data. HR professionals now must be able to define business problems in ways that can be addressed with analytics. They need to be able to analyze, interpret, and translate people analytics outcomes to implement strategies and inform decisions.

But people analytics isn’t confined to HR. This same need for data-informed people practices is bringing business and technology leaders into the world of people analytics as well. All business and technology leaders must now be capable of making data-informed decisions about people. Leading to a demand for people analytics skills in job titles and departments outside of HR. The flurry of new regulations, requirements, and standards for human capital reporting such as the Securities Exchange Commission’s (SEC) new rules on human capital disclosures and ISO 30414 (Guidelines for internal and external human capital reporting) has led more CEOs and CFOs to ask for people analytics information than ever before. And, if the Coronavirus pandemic taught us anything, it is that we do not have enough information about our workforce to answer important questions about what employees need, how to adjust in times of uncertainty and change, or how to quickly bring together data about people to address unforeseen business challenges quickly. The pandemic showed leaders just how little they knew about the workforce. When a flurry of questions about remote working practices, technology needs, employee wellness, etc. started to pour in, companies became startlingly aware of how little information they had available on these topics. It also shifted the types of questions that organizations needed to answer. In a Deloitte Global Human Capital Trends survey, 85% of respondents rated “people data” as “important” or “very important”, tied for #1 with the need for cross-functional collaboration from the C-suite.

The world becomes more data-driven every moment and the world of work is not immune to that data growth. People analytics provides insights into that world.