Top People Analytics Tools — 2023

In general, companies turn to people analytics tools to build high-performing teams, inform business decisions, and ultimately improve their bottom lines by spending less money. On a more granular level, you can use them to optimize your human capital management and impact your company’s overall success—whether you’re working in person or remotely. For example:

• Identify top talent: If you’re looking to fill a certain position, you might be able to find the right candidate internally. Performance-related data can show you if a current employee might be a good fit for a new or open role. Likewise, you can analyze people data from your applicant tracking systems and/or in your talent communities to see which external candidates to prioritize.
• Understand career pathing: Map career path scenarios for your employees and use relevant data to optimize them and better understand what will motivate each individual employee to grow. From there, you can design clear career advancement plans for them so that managers and employees alike are on the same page.
• Improve DEI: Track your diversity, equity and inclusion (DEI) initiatives to see where there might be gaps and opportunities for improvement.
• Fair compensation: To make sure you’re paying employees a fair salary and/or to help you with salary negotiations, look at relevant data. This includes information on how an employee compares to their team as well as what that particular role typically pays in the overall job market. ‍
• Skill gaps & talent shortages: To help inform who your next hires should be, you’ll be able to use HR analytics tools to identify gaps in skills, core competencies, and talent. That way, you can be strategic about who you hire and ultimately save time and money on recruiting and talent acquisition efforts.

HR analytics tools help streamline and optimize the management of your people data and insights. But you’ll want to be careful in how you use them so that you’re not relying on bad data, putting too much emphasis on data alone, or risking compliance and security issues. With that, here are four considerations and common mistakes to avoid as you implement HR analytics systems:

• Don’t forget about human components. If you rely too heavily on data, you might not get the full picture. Don’t forget to incorporate actual human feedback and other factors that can help provide the right context for certain analyses.
• Make sure you have clean data sources. You’re going to want to build a high-quality database of your people and business metrics. This means cleaning your data to ensure nothing is out of date, inaccurate, or incomplete. If you don’t do this, your reports could be all wrong and you could end up making decisions that actually aren’t in the best interest of your people and/or your company’s bottom line.
• Don’t let overwhelm prevent you from starting. Setting up an analytics program can feel daunting--especially if you’re not a technical person and/or if you’re working with an old database. This doesn’t mean you shouldn’t move forward with an HR analytics tool, though. In fact, they are built to make your data analyses less overwhelming. And, many tools offer customer support and onboarding/trainings to help you get set up the right way.‍
• Be mindful of GDPR and other compliance issues. Between GDPR (or General Data Protection Regulation) and other compliance measures, you have to be extra careful with your data security efforts as well as what personal information is stored where—and whether it’s being used with the proper employee consent. The last thing you want to risk is a data or privacy breach that exposes information like an employee’s social security number, salary, etc.

As we’ve mentioned, there are a lot of benefits to using HR analytics programs. Together, these benefits can help your company make better decisions when it comes to hiring, culture, strategy, and growth. You’ll be more confident that you’re hiring the right people and focusing on the right initiatives at the right time. Unpacking this a bit further, here are the benefits of using an HR analytics tool:

• Better hiring decisions: Use historical hiring data to find trends between things like candidate qualifications and backgrounds; for example, if you’re hiring for a technical role and see from your data that self-taught applicants often fail to have the necessary qualifications, you might want to focus your resources on candidates with the proper training.
• Reduced turnover: Discover trends that lead to employee turnover. Is something consistently happening to cause your people to jump ship? When you can pinpoint a problem, you can create a solution and increase retention in the long-run.‍
• Improved productivity and performance: You’ll be able to better identify where you should spend your resources. This goes for both company goals and strategies as well as people investments.

Pricing is typically based on a per user per month cost that is either billed monthly or annually. While the unit price itself varies by provider and based on the features you need, we’ve seen it range from $12.00 - $70.00 per user per month. Make sure to discuss pricing in detail on your demos so you know exactly how much you’ll pay and what you’ll get in return.

People analytics programs offer a variety of features and functionality to help you understand key HR metrics so you can make more strategic decisions for your workforce planning and company strategies. Such features include:

• Performance management: Track how each employee and team is performing. For example, what kind of impact are they making on the company? You can track employee performance through features like 360 reviews, goal tracking, 1:1s, feedback, and praise.
• Employee engagement: Understand and track your company culture by collecting feedback from your employees and measuring how your employees engage with the organization. Administer surveys, pulses, even eNPS (or your employer net promoter score—i.e. how likely an employee is to recommend your company to a friend or candidate).
• Org charts: Create dynamic, real-time org charts that are always up to date. Add customizations or filters so you can ensure you’re meeting your DEI and other requirements. For example, you can visualize your org charts with an eye on gender, location, tenure, ethnicity, even Myers-Briggs.
• Salary benchmarks: Create appropriate salary ranges for a particular employee and/or role, then build career plans around them so you can better plan and budget for promotions, raises, etc. 
• Integrations & Reports: Connect to a variety of data sources (i.e. existing HR tools) to maximize data tracking and analytics, find insights, and develop reports to visualize trends, gaps, and opportunities.
• Shareability: Easily share insights and reports with your team. You can send links to reports, download visuals for presentations, and more. 
• Security: Because these tools have access to a lot of sensitive people data, they offer top-notch data privacy and remain compliant with necessary security and risk guidelines.
• Predictive analytics: Pull data from different HR systems into your analytics platform of choice to identify what future outcomes will look like for a given HR-related category. This is done using a combination of machine learning, visualization, and artificial intelligence.‍
• Variety of KPIs: You’ll be able to measure a number of KPIs as they relate to your talent analytics. Such analytics include everything from staffing to social media to overall human resource management—which you can use to get actionable insights on how optimize your HR processes and find business success.

Demos will provide a lot of insight into how each tool works, from actual features to security measures to reports. Just make sure you take control of the demo so it isn’t just a sales pitch. After all, you want to make sure the tool you choose works hard for you. With that, here are some questions to ask:

• What reporting comes out of the box?
• How do you integrate with data sources / data warehouses/lakes?
• What are they main use cases for people analytics?
• What level of sophistication does someone need to use this tool?
• What data security measures do you have in place to ensure we remain compliant with GDPR and other guidelines?
• How will this solution fit into the rest of my tech stack and therefore what integrations do I need?
• How will others in the organization use this solution?
• What are the key features I want to ask about?
• What are the things that would make me nervous about buying this sort of solution

How to implement a data analytics solution depends on a few key variables:

• Existing HR tools. Do you need to integrate an insights tool to other HR tools you use, so that you can centralize data in one place? If so, what’s involved with the integration processes? Will you need to engage your IT teams for help?
• Breadth of features. How many features you want might impact how long it takes to get up and running. This also comes back to integration requirements.
• Your data. Do you need to clean up an old database first or are you starting fresh? Remember, it’s vital to be working with “good” company and employee data so that your reports and insights are accurate. So if you need to clean up your system, you’ll want to budget the right time and resources to do so before you implement anything.
• Compliance requirements. What risk and compliance measures will you have to apply? Will you need to allow employees to opt in to share certain personal metrics? Discuss with your risk, compliance and/or legal teams and check with your analytics provider of choice for their compliance 101 guidelines. 
  

All of these implementation variables should be discussed in full during your demos. That way, you’ll be primed for success and have less surprises or roadblocks along the way.

What is people analytics?

People analytics, also known as HR analytics, are the interpretation of data pertaining to employees that assist with decision making for HR and TA teams.

What is people analytics software?

People analytics software are solutions designed to manage, track, and report metrics such as employee engagement, gender pay equity, turnover rates, cost per hire, and more.

What does people analytics software do?

People analytics software allows you to form actionable insights based on in-depth data. It helps you identify top talent, understand career pathing, improve DEI initiatives, offer fair compensation, and recognize skill gaps and talent shortages.

What are some benefits of people analytics tools?

Benefits of using people analytics tools include reduced turnover, better hiring decisions, and improved productivity and performance.