People Analytics: Applied AI

In a recent article for the University of St. Gallen, Dr. Lucia Görke, Global Head of People Analytics at Novelis, presented five useful examples of applied ‘people analytics’ that have frequently proven their worth in corporate practice.

These examples, which each have concrete implications for business practice, could be seen as relatively ‘low-hanging fruit’ that most organizations might consider when weighing the potential of AI.

The following is an extract from the University of St. Gallen Executive School of Management Technology and Law’s VISTA blog:

People analytics: Five examples from corporate practice

1. When employee training pays off for a company

People analytics can show which training really pays off. For example, in an FMCG company, analysts found that training shop staff had a positive impact on the shop’s financial performance and therefore ROI. This was measured through A/B tests. That is, one half received training and the other half did not. At the end, analysts compared the two groups and saw that the group that had received training was also more successful financially.

2. Discover risk factors of fluctuation and save costs

Analyses of employee turnover are popular in times of the ‘great resignation’. Having to replace an employee can be expensive for a company. People analytics can help companies in two ways: Firstly, data analysis can be used to determine whether the company has a problem with staff turnover at all and at what point employees become worthwhile for a company. This can be used to help decide whether next steps need to be taken. If the company has a high turnover rate and wants to do something about it, the second point comes into play: analyse and explain why employees quit. This information is provided anonymously to managers so that they can reduce the risk factors for turnover.

3. The connection between inspirational leadership and company growth

Another frequently studied case is the connection between the employees’ perception of the leader and the company’s ROI. The question is examined to what extent a leader who is rated as inspiring by the employees (e.g. from questionnaire data) also contributes more to the ROI of the company. The relationship—between soft factors such as inspirational leadership and ROI—can only be measured to a limited extent. Nevertheless, taking other variables into account, it could be shown that an inspiring leader also contributes to a higher ROI. This correlation was particularly clear in the area of growth (on average 0.1% more growth).

4. Collect target group-specific feedback to counteract the shortage of skilled workers

There is a shortage of skilled workers, especially in the health and logistics sectors, as well as in other industries. It is therefore important to motivate and retain existing employees. Therefore, it is particularly relevant to collect target group-specific feedback and data from them. This can be done through short micro-surveys and text analysis of comments. With easy-to-understand dashboards for management, People Analytics can help to quickly identify problems. Based on these analyses, those responsible can derive solution approaches to increase the well-being within the workforce and thus counteract the shortage of skilled workers.

5. Workforce planning for the future

People analytics helps to anticipate and classify critical talent gaps through data analysis. Other benefits of people analytics include:  

• Financial planners to plan employee costs more accurately for the future,
• Talent managers, so that they can target talent that will be missing from the company at an early stage, and
• the HR managers, so that they can communicate the internally required skills and competences to the responsible persons in a timely manner. 

The list could go on and on because the application possibilities are manifold and individual.

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Dr. Lucia Görke, Global Head of People Analytics at Novelis, also teaches At St. Gallen and is a contributor to the short program ‘Leadership through People Analytics and Trust’—which considers the basis for the effective application of People Analytics, the benefits of business intelligence, and explains how to foster the two most important characteristics of leadership in the digital age: digital competency and trust.