Making a Business Case for People and Culture Analytics

Company culture can have a direct impact on employee productivity, retention, and overall business performance. In fact, one study revealed that companies with a “strong” culture saw a 4 times increase in revenue growth.

Therefore, it’s crucial to build an environment where employees feel valued for their contributions and nurtured professionally. But how can HR professionals actually determine how successful their efforts are in improving company culture? 

That’s where people and culture analytics come in.

What are People and Culture Analytics?

First, let’s examine the difference between “people analytics” and “culture analytics.” 

• Culture Analytics: Culture analytics are used to measure the degree in which employees are satisfied in their current role and motivated to do their best work. A great example of a cultural metric is employee engagement. This measures whether employees feel like they are part of a team and are inspired to help their company succeed in its long-term goals.
• People Analytics: This builds on culture analytics to incorporate other people-focused data points that are pivotal to a company’s success, such as successful talent acquisition. For example, how many “first choice” candidates accept a job role, and how do they perform once hired?

Why Invest in People and Culture Analytics?

Leaders that make decisions based on gut instinct run the risk of overlooking details or wasting time and resources. Instead, a data-driven approach identifies which specific ideas and initiatives are likely to have a lasting impact on employee retention and culture. This means HR professionals can direct their efforts on processes that will deliver the most significant return on investment. 

It’s important to note that “analytics” isn’t just about collecting data, but generating specific, actionable insights. A good place to start is by implementing employee engagement surveys. These can involve a variety of questions, including those answered with “yes or no” or numerical values. Here are some examples:

• “On a scale of 1-5, how invested are you in our company’s growth?”
• “On a scale of 1-5, how invested is your company in your career development and growth?”

Make sure that your answers are quantifiable so you can create a data set. This will allow you to develop valuable insight, such as “30 percent of candidates who turned down a job offer did so because they were unsure as to how supported they would be in their new role.” This unique perspective can help you adapt your employer value proposition. For instance, a certain stat you discover may lead you to incorporate one-on-one mentoring into the onboarding process or offer more professional development opportunities.

To develop a more well-rounded view, you can also use more advanced methods, such as sentiment analysis. Sentiment analysis uses AI to analyze language choices used in performance reviews, feedback forms, and peer-to-peer communication. The end goal is to quantify how employees and candidates perceive your organization. This allows leaders to identify deep-rooted issues that require a tailored solution. From there, you can begin to create a compelling business case for people and culture analytics.

Making a Business Case for People and Culture Analytics

When making a business case, you’ll need to highlight the issues costing your organization resources, time, and money. After doing so, you can demonstrate how they can be solved using people and culture analytics. Let’s take a closer look at a few example scenarios: 

• Despite company-wide initiatives, employees are still feeling disengaged and unmotivated, leaving your company at risk for turnover.
• Certain teams and departments have been experiencing significant turnover for quite some time. The subsequent cost of recruiting new employees is making these teams less profitable.
• A new competitor has started attracting “first-choice” candidates who have the skills and experience to potentially outperform your organization in the long-term.

Now that you’ve figured out which areas need attention, it’s time to share how using data driven metrics can make a measurable difference. For instance, you can create a presentation explaining how sentiment analysis allows leaders to understand how employees truly feel about processes, such as performance reviews. You could also review turnover trends in a specific department to determine if they correlate with any organizational changes or management decisions. 

Keep in mind that the solution should be forward-thinking and able to grow as the business scales. Aim for a proposal that can be easily adapted and carried out on an ongoing basis. Here are a few examples of possible solutions: 

• Hosting open-forum sessions takes an active approach to employee engagement by giving them the opportunity to provide input around company goals and initiatives.
• Implementing a two-way feedback system with open communication between managers and direct reports could help improve employee retention. 
• Conducting candidate feedback surveys can give you insight into candidates’ decision-making process and help you better tailor your outreach. 

FInally, the success of your solution should be easily measurable. For example, if you can show that your proposed solution has increased employee engagement and that in turn has increased productivity, then you have proven that people and culture analytics have long-term value. Once you’ve achieved this, you can start making them a core part of your organization’s decision-making. This will give leaders the data they need to pursue long-term growth and stand out in the wider market.

Tracking people and culture analytics is critical to a company’s success. But what specific metrics matter most to a CEO? Find out in this blog post written by Namely’s CEO, Larry Dunivan.