I have been focused on the people analytics space for the past few months. We conducted a big survey, took lots of briefings, and interviewed companies doing it right. It was full of surprises.
We found that 93% of companies are increasing their investment or continuing to invest the same in people analytics this year and only 28% are not happy with their existing providers. The demand within this market is undeniable, but there is a tremendous amount of confusion and misinformation. And some providers are doing more harm than good by inadvertently discouraging rather than empowering HR professionals.
I was in NYC with HireRoad a few weeks ago presenting some of these findings and was impressed with the simplicity of the people analytics product and their approach to customer success. We will publish more over the next month, but I wanted to share some of the big takeaways:
- Companies Have Better Options: Just a few years back, companies interested in people analytics were often forced to cobble together homegrown solutions and various business intelligence (BI) tools. This process was typically labor-intensive and caused internal headaches. Today, companies have far better options. Best of breed providers are offering streamlined solutions that empower companies to seamlessly share real-time data, visualize insights, and gain meaningful answers with ease. Our research revealed that 30% of companies are leveraging best-of-breed providers, 15% are still relying on BI tools, a surprising 28% are persevering with in-house solutions (yes, you read that right!), while 18% are sticking with existing human capital management (HCM) providers. The good news is that best of breed providers are targeting mid-market companies as well.
- Cost Matters: Our research uncovered that the primary factor influencing investment decisions in people analytics was cost-effectiveness, over product capabilities and support. For businesses lacking a dedicated budget or formal people analytics function, creating a compelling business case can pose a significant challenge. Adding to the complexity, many providers are hiking up prices with various add-ons, leaving buyers confused over what’s actually included. Consequently, a considerable number of companies we spoke with are eyeing a provider switch within the next year. Building trust is paramount in any partnership with a people analytics provider yet understanding the return on investment (ROI) often fall short.
- Navigating Buyer Confusion: In the people analytics landscape, providers are going after different buyers. Some are focusing on people analytics functions, others are targeting HR, while a few are setting their sights on managers. With every provider singing a different tune, it’s confusing to know who exactly the target audience is. Within the people analytics community, there are undoubtedly some of the most passionate and educated experts driving the conversation forward. However, there’s also an untapped opportunity to support HR buyers who may be feeling out of their comfort zone when it comes to people analytics. By offering simple solutions that build confidence, providers can empower HR professionals to navigate this complexity. We found that 39% of HR leaders cited limited expertise as their greatest challenge with people analytics.
- Customer Support is a Differentiator: While technology and real-time data are crucial components, it’s the quality of customer support provided that also sets a provider apart. From initial onboarding and implementation to ongoing support and training, services ensure that organizations can effectively leverage the insights from their data. Expert guidance and personalized support empower HR teams to make informed decisions that drive organizational success.
We will be publishing this research soon. If you are a company investing in this area or a provider offering a product, we would love to hear from you!
