HR Research Institute Study Reveals Progress and Challenges in People Analytics

A recent study conducted by HR.com's HR Research Institute (HRRI) sheds light on the current state of people analytics in organizations, revealing both progress and persistent challenges. The research indicates that while companies are improving in data gathering and evaluation, a significant gap remains in fully utilizing HR analytics to drive business decisions. Only 22% of companies report being 'very' or 'extremely' effective at maximizing their HR analytics potential, highlighting the need for better application of data insights.

On a positive note, the study shows a notable improvement in data evaluation skills among HR professionals, with 50% now rating their organization's capabilities as 'good' or 'very good', up from 36% in 2021. Despite this progress, the integration of business data with HR data remains a major hurdle, with only about a fifth of organizations consistently achieving this. This limitation prevents companies from gaining a comprehensive understanding of their workforce in relation to broader business objectives.

The study identifies three primary challenges in people analytics: integrating disparate sources of data (47% of respondents), implementing programs based on analytics-derived decisions (41%), and distribution and communication of data (33%). These findings suggest that organizations are becoming more skilled at collecting and analyzing HR data but still face significant obstacles in translating these insights into actionable strategies.

Debbie McGrath, Chief Instigator and CEO of HR.com, emphasizes the importance of moving beyond data collection to focus on making data-driven decisions that have a real business impact. The study's implications are significant for the HR industry and businesses at large, as the ability to effectively leverage people analytics is increasingly crucial for competitive advantage. Organizations that can overcome these challenges may see improved workforce management, more effective talent strategies, and better business outcomes.

For those interested in delving deeper into the study's findings and recommendations, the full research report, HR.com's State of People Analytics 2024-25, is available for free download. Additionally, HR professionals can access a recorded webcast presentation, How to Boost People Analytics Effectiveness in Your Organization, for further guidance on enhancing HR data practices.