People Analytics: COVID-19’s Silver Lining

It’s time. The moment has come for people analytics to stand and deliver.

I have never been more excited about the value of people analytics. There are three reasons for my enthusiasm. First, in this human crisis, people are the largest expense and the biggest asset. Any decisions regarding them must be based on evidence—guessing is far too costly. People analytics can provide many of the inputs needed for evidence-based decisions. Second, in these uncertain and challenging times, our business leaders need to make hundreds of tough decisions in a very short span of time. They cannot rely on previous experiences or planned responses, and they face a great deal of ambiguity and uncertainty. People analytics replaces uncertainty with data. Finally, no one knows what the “next normal” is going to be, but everyone is certain that it will different. People analytics could sketch the contours of the “next normal” through data-driven scenario planning.

However, few seem to have realized the benefits of people analytics. Many companies here in Denmark have now pushed analytics projects into the background. Perhaps their priorities have changed, other things now seem more important, or analytics is simply not perceived as a “business-critical” function. The crisis has exposed the organizational status of the people analytics function, and drawn a clear line between those companies that have truly internalized the value of people analytics (because it is rational) and those that only invested in analytics because everyone was doing so (i.e., because it is fashionable).

Every crisis is an opportunity. In my previous article “In this crisis, good HR could save a company— bad one might bury it,” I argued that the crisis highlighted important differences in the ways CHROs can grasp this opportunity to give the HR function a significant, long-needed makeover. For people analytics, the crisis offers a similar opportunity to move out of the “back-stage” shadows (where the act is prepared and parts are rehearsed) toward “center stage” (where the performance is presented to the audience). There are several ways to make this happen.

1.     Sharing data (operational reporting)

First and foremost, decision makers need accurate information about the workforce: who, how many, and where. Many expatriates, international assignees, and mobile workers need to be relocated within a very short period of time. Business leaders also require detailed data on temporary workers and other forms of non-standard employment. Moreover, information on changes in the workforce (e.g., maternity/paternity leave, business-unit reorganizations) must be included and updated frequently. For a seasoned analyst, none of this is new. However, even they will face a challenge in terms of ensuring that the right information is at decision makers’ fingertips. The goal is not to overpopulate the Crisis Management Dashboard but to carefully select newly critical information about the workforce at a desirable level of granularity. What decisions do the decision makers make? What questions do they need answered? How much time do they have to review the data?

The next step is to map the workforce data against the publicly available COVID-19 datasets. Several reliable data sources are available from, for instance, Johns Hopkins University’s CSSE, and more are becoming available in the US and the EU. As Jeremy Shapiro explains in the Visier webinar “How to use analytics during the COVID-19 crisis,” “you can show your leadership team where employees are and who is most at risk by embedding public data into your systems." The Qlik Community Response page provides good examples of such visualizations (see the screenshots at the end of the post).  

Analysts could go a step further and create their own risk-assessment indices. Demographic data would be a good starting point. We know that age and gender matter. In some instances, we have medical records or information on sick leave. We also know the location of the individuals in our workforce. To this data, we could add the nature of each individual’s work in terms of, for example, exposure to others, the need for physical contact, and the need for relocation. Soon we will have enough data to calculate the actual trend in employees’ infection rates based on job roles, tasks, locations, etc. Many external providers are currently developing such solutions and will most likely offer them to their own clients for free.

Business leaders will need all of this real-time information to make sound decisions. It will help them making informed adjustments to coping tactics in the short term and developing business strategies in long term.

2.     Generating information (advanced reporting)

The organizational priority must be to closely monitor employees’ stress levels (Stage 2 priorities). In the Visier webinar mentioned above, Al Adamsen said: "There is a great deal of anxiety out there, but people analytics can help alleviate this." Indeed, knowing is much better than guessing when dealing with anxiety, the fear of the unknown, and all of the other human emotions that the uncertainty of the pandemic brings.

The best way to collect information is through pulse surveys. They are short, frequent, and—if set up correctly—accurate. You can either get in touch with your external providers of engagement/satisfaction surveys and ask if they offer such solutions, or design them on your own. If your external provider is too slow or unresponsive, you can consider other solutions already available on the market. For example, Innovisor created a “pulse tracker” that covers several dimensions: transparency, trust, motivation, future outlook, alignment of expectations, social connectivity, help and advice, flexibility, virtual meetings, working from home, productivity, and work-life balance. This tool identifies the key drivers and impact variables for productivity and well-being using a multi-linear regression analysis.

Regardless of whether you decide to “build” or “buy,” the pulse survey will need to be set up correctly. First, be very precise in your line of questioning: don’t ask respondents about their overall engagement, satisfaction, or Net Promoter Score. Instead, ask about their psychological state. Second, use established scales. For example, Professor David Guest recommends adopting Warr’s validated measure of well-being. In this regard, respondents can be asked: “In the past few weeks, how often have you felt each of the following: tense, calm, uneasy, cheerful, worried, enthusiastic, depressed, contented, gloomy, relaxed, miserable, optimistic?”. Usually, respondents are given a six-point response scale ranging from “never” to “all the time” (use a sliding bar for greater variation). Third, decide on your sampling strategy. It may be useful to run the pulse check on a random sample, as you can then run these checks more often, but a pulse check of all employees may also be necessary, after which the results can be mapped by teams. In the latter case, you will give the team leaders a license to operate and an opportunity to act on the results.

Research shows that just being surveyed during a time of need has a positive effect on well-being and motivation. The effect triples if the inquiry is followed by managerial action. Showing employees that you care is a very strong signal that is crucial for their commitment and motivation.

Another important information-gathering task relates to the unfortunate effects of the crisis in the form of salary cuts and layoffs. In some industries, up to 20% of all employees will be laid off or will find their salaries lowered. In this exercise, keep in mind that people analytics is a value-creation function. Professor Clint Chadwick suggests that rents from human capital could be created by increasing the gap between the costs of human capital and its value in use. In some instances, you could derive higher rents by keeping the costs constant but increasing the value creation. For example, in all of these cuts and layoffs, we might ask a different question: “Who do we keep?”. The evidence-based answer can only come from people analytics. This is what we do—we identify (and explain) variance in employees’ behavior. Therefore, it is the responsibility of people analytics to instill confidence in the business leaders making these difficult decisions. Is there high variability in performance among the people who occupy similar positions? Hint: you will seldom find the variance at the top. According to Professor Mark Huselid, “the sorting and selection process used to choose senior executives is very extensive. Each step of this process is based on a variance-reduction system in which poor performers are sorted out or developed into good performers. However, at the bottom and middle of the organization, such variability can still exist.” 

3.     Creating knowledge (analytics)

In this period, a huge responsibility lies on the shoulders of team leaders. Everyone agrees that leading virtually is much more challenging than traditional leadership. In addition to ensuring task performance, leaders in a virtual world need to proactively guide the relationship-building process and invest more time and effort in facilitating team processes. The kind of analytics that could support your virtual leaders in the relationship-building process revolve around data collected through organizational network analysis (ONA). In the Visier webinar highlighted above, Dan George shared a map created through a network analysis that determines who is critical from a customer-service perspective (see David Green’s post for illustration). Jeppe Vilstrup Hansgaard of Innovisor explains: “The ONA insights are really helpful to keeping teams connected and productive during these time. Social distancing has magnified everything in terms of informal networks and relations. It changes not only how we situate ourselves, but also how we interact - how we speak with each other, listen to each other, and how we make and implement decisions. It moves the organizational vibe from the physical space (coffee-machines and water coolers) to the trusted connections of organizational networks.”

Perhaps the most valuable contribution of people analytics to business planning is scenario planning. What if we continue to have a certain percentage of employees working remotely during the summer months? What if we decide to “outsource” the tasks handled by part of our permanent workforce to contractors and temporary workers? What if the level of employee stress rises in September when operational activities increases? (Hint: it is not a question of “if” but “when” organizations will have a stress problem). What if …?

The “next normal” is impossible to predict but scenario planning and modelling can enable us to offer our business leaders a preview, raise meaningful doubts, and provide tools for dealing with possible developments. Most importantly, people analytics can help entire organizations decrease the overwhelming uncertainty associated with the “next normal.”

Finally, you now have a unique opportunity to understand how, where, and by whom value is created in the organizational hierarchy. The crisis has created a “perfect storm” for your organization. The current situation will test your previous decisions regarding the leadership pipeline and talent management. Do you have the right people in the right places? Have you been promoting for the right competencies? The current situation can give you enormous insights into the “nuts and bolts” of your organization’s established hierarchies. You now have an opportunity to test all assumptions about such elements as the span of control, shared leadership, and matrix structures. All you need to do is to pay attention and gather data for a longitudinal analysis in which the COVID-19 crisis will be the natural exogenous shock to the organizational system. 

Stand up and deliver

The people analytics function owns an enormous amount of newly critical information. Even if no one is asking, we need to get out of our comfort zones, find the right form and channel, and deliver the message to the right audience. If you have ever struggled to convince the organization about power of knowing, this is a perfect opportunity. The platform is burning and the sense of urgency is spreading. There are at least three reasons to act now:  

• Cognitive: BCG identified 12 lessons for businesses attempting to respond to the COVID-19 crisis (see this HBR article), 3 of which speak directly to people analytics. Business leaders are aware of limitations in their knowledge. They are hungry for data. Many business leaders have not experienced the power of knowing. It is your job to educate them. 
• Affective: There is a great deal of anxiety in our organizations. As a profession, we could make a difference by substituting the unpredictability, ambiguity, and insecurity of the crisis with information and knowledge. By acting near center stage, we can instill confidence in people and help them feel safe. 
• Selfish: As a result of the crisis, our organizations are likely to gain more practice in using data and becoming addicted to evidence-based decisions. Catch the moment and build on these useful habits. Find ways to institutionalize these behavioral changes into your organizational culture and develop them into norms so that they become a natural part of future work routines.

You may be surprised, but most organizational needs can be satisfied by sharing data (i.e., the outcomes of operational reporting). In terms of advanced reporting, there may be some interest from certain parts of your organization but you will need to be creative in your offerings and solutions (e.g., initiate a “pulse survey”). Perhaps only a few of those at the very top of your organization would be interested in the new knowledge created by true analytics projects. One could say that when it comes to organizational interest and the need for people analytics in the COVID-19 crisis, Bersin’s analytics maturity staircase, which ranges from operational reporting to advanced analytics, may be flipped—the majority of business leaders in the organization will need the accurate, updated data that the analytics team produces in operational reporting. The information gathered through advanced reporting is more targeted at the decision makers, especially those in HR. Consumers of true analytics projects are at the top of their organizations. However, there is a silver lining—most people analytics teams feel comfortable with operational reporting and have in-house capabilities.

The job now is to stand and deliver. 

Edited by Tina Pedersen