Human Resource Management (HRM) has roots dating back to the 1970s and 1980s, driven by economic, social, and technological changes. Initially vested in personnel management, HRM emerged as organizations recognized that employees were more than just costs to be minimized—they were strategic assets driving success (HR Tutorial).

Despite this shift in perception, organizations have always been numbers-driven. To solidify its role as a strategic partner and earn a seat at the executive table, HRM must also embrace data. HR metrics, such as turnover rates and productivity measures, have long been used to quantify HR’s contributions.

However, in the 21st century—an era of rapid technological advancement—traditional HR metrics alone may no longer suffice. This raises a crucial question: Can HRM keep pace with the rest of the business using conventional metrics alone?

The rise of People Analytics suggests the answer is no.

The Meaning of People Analytics

People Analytics is the data-driven practice of collecting, analyzing, and interpreting workforce-related data to enhance decision-making in human resources and organizational management. It focuses on understanding employee performance, optimizing people processes, and identifying challenges and opportunities to drive business success. By leveraging insights from HR, talent, and organizational data, People Analytics enables companies to make strategic, evidence-based decisions that improve employee experience, workforce productivity, and overall business outcomes.

This contrasts with HR analytics, which is primarily focused on HR duties, or workforce analytics that is involved with the management of the workforce. 

People analytics is facilitated by HR; however, its reach and benefits can be applied to marketing, finance, customer service, and other business portfolios.

Some examples include diversity, equity, and inclusion data, employee preference data, employee engagement, hiring rates, and benefits usage (O’Brien and Downie).

The Application of People Analytics

People analytics, alongside the broader analytics field, has the following types: descriptive, predictive, diagnostic, and prescriptive. Therefore, it is not totally different from what many of us are familiar with in terms of data and analytics. 

To begin with people analytics, it is important to align the purpose of people analytics with the goals of the business. This will allow the effort spent toward data collection and analyzation to have a productive outcome and effectively contribute to long-term goals. 

The data collection and storage are pillars of people analytics. An organization must assess its data sources, data collection methods, and data storage (HiPeople). Many organizations use human resource information systems, and many of these systems allow for data to be pulled. However, even just beginning with excel is a good start for smaller organizations. It is important to check and fix mistakes made by human error. An HR dashboard with easy to access metrics that is updated on a continual basis should be the goal in terms of technology applications.

People analytics data sources. Adapted from People Analytics: An Essential Guide for 2025, by AIHR, 2025.

The Benefits of People Analytics 

The power of data and analytics lies in its ability to reveal organizational gaps, uncover their root causes, and provide insights for improvement.

Some of the key people analytics benefits are:

1. Better Hiring Decisions – Uses data to improve candidate selection, ensuring the right fit for roles. 

2. Improved Employee Retention – Identifies factors leading to turnover and helps create strategies to enhance retention. 

3. Enhanced Performance Management – Tracks employee productivity and high performers to optimize performance reviews. 

4. Optimized Workforce Planning – Helps forecast talent needs, analyze skills gaps, and plan future workforce demands. 

5. Stronger DEI Initiatives – Supports diversity, equity, and inclusion by tracking representation and identifying biases. 

6. Evidence-Based HR – Uses data insights to inform HR policies, compensation structures, and employee benefits. 

7. Reduced Costs & Increased Efficiency – Identifies inefficiencies, improves resource allocation, and reduces unnecessary expenses. 

8. Improved Employee Experience – Enhances engagement, career growth, and internal mobility through tailored HR initiatives. 

9. Enhanced Compliance & Workplace Safety – Ensures adherence to labor laws, prevents misconduct, and promotes a safe work environment. 

10. Alignment with Business Goals – Helps HR align strategies with organizational objectives, driving business success.

The Concern with People Analytics

HR must ensure that its use of data collection and people analytics follows legal compliance, ethical guidelines, and transparency. This includes safeguarding employee privacy, obtaining informed consent, and preventing bias in decision-making.

Performance vs. People-Centered Approach

While data-driven insights are valuable, HR must balance performance metrics with a people-centered approach. Employee well-being, engagement, and workplace culture should not be overshadowed by purely quantitative evaluations. Striking this balance ensures that analytics support both business goals and a positive employee experience.

Works Cited

AIHR. “What Is People Analytics? An Essential Guide.” AIHR, 3 Aug. 2021, www.aihr.com/blog/people-analytics/.

CEO Today. “What Is “People Analytics” & How Should You Be Implementing It?” CEO Today, 4 Mar. 2025, www.ceotodaymagazine.com/2025/03/what-is-people-analytics-how-should-you-be-implementing-it/. Accessed 16 Mar. 2025.

Ghosh, Prarthana. “What Is People Analytics? Definition, Process, Trends, and Tools.” Spiceworks, 3 Mar. 2021, www.spiceworks.com/hr/hr-analytics/articles/what-is-people-analytics/.

HiPeople. “What Is People Analytics? Definition, Process, Examples - HiPeople.” Www.hipeople.io, 12 Dec. 2023, www.hipeople.io/glossary/people-analytics.

HR Tutorial. “The Shift to Human Resources Management: From Administrative Function to Strategic Partner.” HR Tutorial, 2017, hrtutorial.com/hrm/history/hr-strategic-partner-shift/. Accessed 16 Mar. 2025.

O’Brien, Keith, and Amanda Downie. “What Is People Analytics? I IBM.” Www.ibm.com, 27 June 2024, www.ibm.com/think/topics/people-analytics.