Why Should Businesses Care About People Analytics?

Everything I’ve ever written about people analytics; I’ve done so from a foundational belief: People analytics exists to serve the business. It’s not about dashboards for dashboards’ sake. It’s not a pet project for HR. It’s a strategic capability, built for business outcomes, not just HR outcomes.

My book, People Analytics, is written for those who understand that premise. People analytics is about producing business value, increasing productivity and reshaping how HR and people analytics function in an era of creative destruction brought about by Generative AI. But in all my writing and speaking, I’ve never stopped to ask a more basic question: Why should the business care about people analytics in the first place?

It’s time we answer that.

Here’s the short version: If your business is big enough that you can’t manage your workforce on a clipboard, you probably need people analytics. This should be intuitive, but for many businesses leaders it is not.

So, let’s explain further based on insights from the book and lessons learned from years in the trenches of people analytics and workforce strategy.

1. The workforce is the business

Most businesses today will tell you they’re in the “people business,” regardless of industry. Yet few have a deep understanding of who their people are, how they work, how productive they are, what skills they bring and how those characteristics evolve over time.

People analytics isn’t about measuring employees for the sake of measurement. It’s about closing that gap between how we talk about people and how we actually manage them. Businesses obsess with financial forecasting, supply chain optimization and customer analytics. Yet somehow, workforce intelligence often lags behind. It shouldn’t any longer.

If your talent strategy is not connected to your business strategy, you don’t have a talent strategy. You have a hunch. And that’s where people analytics steps in; with data, models and insight to align your workforce to your biggest business bets.

2. Complexity has outpaced intuition

In a 50-person startup, you can get by on gut feel. In a 50,000-person enterprise, you can’t.

Today’s organizations are complex, dynamic ecosystems. And the VUCA world outside our organizations evolves even more quickly than any time in history. Talent is distributed. Skills are evolving faster than ever. Employee preferences are shifting. You’re operating across geographies, potential geopolitical conflicts, siloed business units, disruptive technology, labor shortages and regulatory frameworks. The complexity is overwhelming and without analytics, businesses are flying blind.

People analytics make the unmanageable manageable and the unquantified quantifiable. It takes the complexity of workforce dynamics and makes them visible, traceable and most crucially actionable.

3. If you have multi-incumbent, high-turnover roles, you need people analytics

Most businesses don’t fail at hiring their next executive (although sometimes that also happen – and people analytics has a role to play there as well). They fail in the messy middle; where turnover is high, productivity is variable and scale creates operational risk.

Think frontline roles. Call centers. Distribution centers. Sales teams. Technicians. Nurses. Anywhere you have dozens or hundreds of people in the same job, the variation between a high performer and a low performer creates a real financial impact. People analytics helps you reduce that variation. It identifies what works, what doesn’t and who’s most likely to succeed.

It’s not just about hiring better, it’s about improving throughput, speed, ramp time, retention and long-term business results.

4. You can’t do workforce planning without it

Workforce planning is where strategy meets execution. But most workforce planning is still trapped in spreadsheets and slide decks. It’s months out of date before it even gets presented.

Real workforce planning requires real data. What roles are growing? What skills are scarce? Where are labor shortages going to hit hardest? Where can you re-skill instead of re-hire? These are questions people analytics can answer in real-time. Add generative AI on top of that and the possibilities explode for scenario modeling, demand forecasting and personalized talent strategies at scale.

The businesses that will thrive in tomorrow’s economy are the ones investing in this now.

5. Gen AI disruption and opportunity

We are entering a period of creative destruction. Gen AI will reshape how HR and people analytics functions operate. Some tasks will be automated. Others will be redefined. Entire workflows will be reimagined.

But here’s the key: Gen AI doesn’t replace people analytics. Gen AI supercharges it.

This book is the first to lay out how Gen AI can be used in people analytics to responsibly and strategically transform HR. It’s not about chasing the latest AI trend. It’s about embedding these tools into core people practices so they augment human decision-making and drive business outcomes. The companies that do this well won’t merely survive the disruption; they’ll win because of it.

6. We’ve been here before

In the 1990s, the most progressive organizations adopted the Balanced Scorecard framework. It was a simple idea: You can’t manage what you don’t measure. Businesses began tracking key metrics beyond finance such as operations, customers, learning and growth then and suddenly, strategy execution improved.

People analytics is the 21st century version of that shift. It’s not simply a new function. It’s a new lens. A new way to quantify and optimize your most important asset, your people.

So, why should the business care?

Because people analytics helps the business:

• Quantify productivity and improve it
• Align talent with business growth strategy
• Anticipate risks before they materialize
• Make better, faster and smarter decisions
• Gain an advantage in an increasingly competitive and volatile labor market

If your business is growing, changing or competing for talent and what business isn’t, then people analytics isn’t optional. It’s essential.

Save 30% on People Analytics with code AHR30.