Employees perform best when their managers actually know them. Luckily, advanced people analytics are now able to provide a new level of employee understanding.

The conventional wisdom regarding data and mathematics in business has always been that while big data can do wonders to optimize supply chains, lower response times or automatically fill out repetitive forms, it obviously could never help to manage real human beings. People are unique individuals, went the thinking, and no purely robotic solution could ever adequately address the diversity of their needs. As so-called "people analytics" show how powerfully data affect real human experiences, it's tempting to assume that these statements were wrong — but in reality they were simply naive about the nature of modern analytics.

It turns out that the time-intensive nature of HR, when it's done entirely by human beings, is naturally predisposed to break people's complex problems down into fairly impersonal categories, anyway — with advanced analytics at the helm, this unavoidable abstraction at least occurs quickly and accurately, and not only may provide better returns on collected information, but can free HR workers to focus on the sort of real interaction that is still beyond the best in business AI.

Data Can Now See Deeply Into Human Behavior

McKinsey & Company notes a case of a global quick-service restaurant chain. The organization was worried about a variety of issues that might seem too mired in the minutia of individual employee personalities to be laid bare by a series of algorithms, things like poor employee retention and lower-than-desired levels of customer satisfaction. The chain was even interested in the literal personalities of their many front-line employees, how they interacted with both customers and one another. What sort of insight could analytics possibly provide about that? The answer is, a lot.

How People Analytics Can Increase Revenue

Though the chain under analysis in the case study is anonymous, its managers should be pulling for full disclosure, because their clear ability to work with both IT and HR to integrate the full insights of analytics is something every business could likely be looking for very soon. Finance leaders, in particular, should take note of the returns this organization was able to produce by truly committing to the process.

In one case, according to McKinsey & Company, the chain used a series of computer games to gauge the individual abilities, and some traits, of their employees, assigning employees' paid time to the process, and thus signaling that they truly believed it represented monetary value of its own. They seem to be right, since they were able to use that insight to streamline the onboarding process and substantially decrease attrition in new employees. After having its managers fill out an extensive survey, the chain was able to start identifying the best managerial attributes, insights at least partially credited with its increased customer satisfaction scores and 5 percent overall increase in sales.

Still, what truly shows the organization's commitment to the process is its willingness to deploy sensors into stores to gather actual, real-world data about employee trends and behavior. By using some of the most advanced techniques in machine vision and big data, the chain was able to get a much more accurate picture of the types into which employees fall. Their analysis indicated the best and worst ways to assign each type of employee, both individually and in combinations.

CHROs Are Now Powerful Financial Officers

What all these successful applications of people analytics have in common is direct, meaningful collaboration between management and HR — which means real collaboration between finance leaders and HR leaders. Though the movements of financial advisers and other front-line workers in finance can't be treated quite like fast food attendants, the applications are the same whether the interactions are taped, transcribed or mined from textual communication.

According to The Wall Street Journal, the breadth of people analytics products is skyrocketing, from a tool to easily streamline overtime to an AI that guesses the truthfulness of a candidate from video interview footage. The potential impact on revenue is only going to get more profound, but the skills and processes necessary to put them to work will not. Businesses that have already developed those lines of communication and trained employees to take the process seriously could be best positioned to take advantage of the glut of oncoming options in people analytics.

Be like the nameless burger executives. Start investing in both the technology and the practice of people analytics now.

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Tags: performance management human capital management technology big data