How important is people analytics in Greek businesses?

Deree – ACG and KPMG study highlights the value of organizations investing in people analytics for their continuous growth

Lately, people analytics – the practice of collecting, analyzing and using data to improve the role of talent in strategy execution and value creation (Huselid, 2018), has gotten a lot of hype and even won mainstream acceptance. In fact, research proves that people analytics can significantly enhance the ability of organizations to achieve their strategic objectives.

Yet little is known about the adoption, practice and impact of people analytics on firms operating in the Greek business environment. What is its impact on organizational performance? To answer this question, Deree – ACG and KPMG collaborated on a study to examine people's analytics' adoption in Greece, the underlying reasons, the challenges involved, the key enablers, and the impact of people analytics on organizational performance.
 

Study Findings

Drawing from a sample of 107 participants, mainly HR Directors and officers from all market sectors, this study's key findings are outlined below:

• Three primary reasons firms utilize people analytics:
  a) need for improved business decisions
  b) willingness to embrace data-driven management
  c) need for improved people management
  
  
• Organizations deploy people analytics in several areas, notably rewards, performance management, and employee engagement, yet least in areas of diversity and inclusion.
  
  
• Three main challenges in utilizing people analytics:
  a) complex analytical processes
  b) large volumes of data
  c) lack of resources
  
  
• Firms can be classified into four types:  Basic users (24%), Emergent (39%), Advanced (23%), and Leading (13%). These classifications were based on the firm's maturity in using people analytics, reflecting the type of analysis they conduct, and ii) the technological tools they use. Clearly, there is substantial variation in firms' maturity in using people analytics. Over a third of the organizations, namely Advanced and Leading, collect data through various internal and external sources, invest in modern technological tools, and conduct advanced analysis to support decision-making.
  
  
• The major enablers of people analytics include senior management support, HR skills in people analytics, and a data-driven culture. However, the distinguishing factor between Leading and other firms is the amount of investment in information technology infrastructure and complete alignment between business and HR strategy.
  
  
• Utilizing people analytics is associated with higher scores in subjective measures of organizational and financial performance, as well as HR effectiveness.

Should Greek businesses invest in people analytics?

In which areas do we need to invest in order to retain our top talent? What will happen to employee engagement if we increase salaries by 10%, for example? How much will customer service improve if we invest in the people skills of our front-line managers? Such questions can be more effectively addressed with the deployment of people analytics. Our findings show that a large proportion of firms appreciate the value of people analytics and their potential to improve decisions regarding their employees and business.

Investing in people analytics should be seen as a means to an end -- offering insightful information to top management for strategy execution, people-related investment propositions with tangible results, and clear evidence to support decisions for the company. Undoubtedly, it is not something that can be done overnight and involves challenges, such as complex analytical processes. However, the benefits of making more intelligent, evidence-based decisions outweigh the costs. This investment not only pays off but becomes a competitive necessity as organizations increase in size.

Acknowledging that firms are at different stages of maturity in the deployment of people analytics, we urge businesses in Greece to take the following step in their journey. In all cases, organizations and their HR teams should:

• develop a clear people analytics strategy, decide on its focus, and set expectations
• invest in related skills within the HR team that will allow for innovative and effective utilization of data analytics possibilities, but it is equally critical to look for synergies outside the HR department
• fully map all available data sources and ensure data quality, including their correct and timely collection and handling
• invest in digital tools that serve the organization's needs, priorities, and characteristics

Eventually, the HR team needs to "tell a story" based on data analytics coupled with other sources of information and carefully share it with people who will benefit from these insights. Gradually, the organization should cultivate a data-driven culture and embed this logic in the decision-making processes of all business units.

Deree – ACG and KPMG are grateful to all the participants of the study and hope that our next survey will reflect the ongoing progress in the field of people analytics!