It is now widely known in many organizations that data can also lead to valuable insights within HR. Under the name HR analytics, many organizations are therefore working with data about their employees. Still, over the past three years, the term 'People Analytics' has been a much more popular search term on Google than 'HR analytics'. What’s going on here? Is People Analytics the new HR analytics, or can these two terms simply coexist?
About me
Let me introduce myself! My name is Sanne de Haas. In the summer of 2020, I graduated with a bachelor’s in HRM and in September I started the Master’s in Data Driven Business at the University of Applied Sciences Utrecht. During this master's, I learn how to convey strategic business issues to data professionals and how data solutions contribute to evidence-based decision-making. I take courses such as data driven decision making, digital ethics, and data privacy, but I’m also learning a lot about Machine Learning and programming.
As part of the master's, I’m specializing in People Analytics. This forms a nice bridge to the topic of this blog: what do People Analytics and HR analytics actually mean, and what discussion is going on around these terms?
Definitions of People Analytics and HR analytics
To gain insight into the ongoing discussion in this area, I did some research on LinkedIn. On this professional network, people often discuss what the ‘correct’ term actually is.
"according to him, HR analytics is more of an HR gadget that only works when there is a highly mature HR department"
One of my lecturers has a clear opinion in this discussion. According to him, HR analytics is more of an HR gadget that only works when there is a highly mature HR department. He questions whether it’s even necessary for HR to conduct analyses about employees and their relationship to business results. Can’t Strategy or Finance do that just as well?
When we look at the definitions of both terms, we also see a difference. At the University of Applied Sciences Utrecht (2019), People Analytics is defined as:
a mental framework for systematically identifying the human capital factors that have the biggest impact on organizational outcomes, to realize sustainable value for the organization.
Toine Al and Irma Doze (2018) define HR analytics in their book ‘HR-analytics: waarde creëren met datagedreven HR-beleid’ as:
the systematic translation of developments within an organization’s human capital into future consequences using data-driven techniques, quantifying and predicting the impact on organizational activities with the aim of understanding individual and collective employee behavior and performance, as well as the performance of the organization as a whole.
Differences and similarities
That both terms aim to add value to the organization is clear. Still, there is a striking difference in the definitions! What stands out to me is that the definition of People Analytics suggests that it's not only about employees, but about all human capital that contributes to the organization’s results. That could also include external partners or stakeholders. In that sense, People Analytics is not limited to the HR function.
In contrast, the definition of HR analytics is much more narrowly defined as it explicitly refers to employees. The LinkedIn discussion also touches on the target group each term includes. People mention that People Analytics can easily be confused with Business Analytics when it comes to non-employees. It’s important to be sharp on this distinction!
"the fact that People Analytics is not limited to the HR field is something everyone seems to agree on"
Based on the definitions, People Analytics and HR analytics target different audiences. This supports the opinion of my lecturer (and most LinkedIn contributors). In the LinkedIn discussions, everyone seems to agree that People Analytics is broader than HR analytics and that these terms really mean different things—as is also evident from the definitions above. The fact that People Analytics is not limited to the HR field is something everyone seems to agree on.
"where I once thought during my bachelor’s (Human Resource Management) that I wanted to dive into HR analytics, I now focus much more on the broader People Analytics during my master’s"
An interesting discussion
What I find most interesting about this discussion is that it makes you reflect on what you’re working on. Especially now that I’ll be looking for a job in this field in a few months. Am I looking for something in People Analytics, HR analytics, or both? And what do these roles entail? Where is the difference? Where I once thought during my bachelor’s (Human Resource Management) that I wanted to dive into HR analytics, I now focus much more on the broader People Analytics during my master’s.
My bachelor’s was very much focused on applying data within HR. In contrast, my master’s focuses more on adding value with data in the broader context of People Analytics. This again confirms that People Analytics is not limited to HR. The main difference I notice is that HR analytics is more about HR-specific topics like turnover and absenteeism, whereas People Analytics has a much broader scope and focuses on all human aspects involved in organizations.
Valuable insights
So, to the question of whether People Analytics is the new HR analytics, my answer is no. People Analytics might be an expansion of HR analytics but certainly doesn’t replace it. I do agree with the argument that HR analytics is more of a tool for HR, while People Analytics plays a much broader role in the organization.
I also believe that both terms can continue to be used side by side in practice. And that it’s not so much about the labels, but about the valuable insights they deliver.
Whether it’s called HR analytics or People Analytics, it’s definitely valuable!
Sanne de Haas