School of Business and Economics

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18 Oct 2021

It's so fake - how management pressure undermines the potential benefits of people analytics in HR

Recent research from Loughborough University, published in the prestigious Human Resource Management Journal, has found significant gaps between the claimed benefits and outcomes of People Analytics projects.

The research which drew on an in-depth ethnographic study conducted by SBE researchers Nina Jörden, Dr Dan Sage, and Dr Clive Trusson found that practitioners are often rushed by their line managers to complete People Analytics projects and as a result become cynical about their work and distance themselves from their work outputs. These lived experiences raise calls for a closer look at the processes through which People Analytics can usher in a sensible data-driven approach to Human Resource Management.

What is People Analytics?

People analytics, the data-driven approach to managing people in organisations, is widely celebrated as one of the most important changes in Human Resource Management. It is expected to bring significant benefits to organisations by reducing the reliance on perception, gut feeling, and experience in HR to focus more on objectivity, data, and evidence. For example, in the recruitment process, data on potential candidates can help limit intuition, subjectivity, and unconscious bias so that candidates are judged on verifiable calculations of their merit and potential. People Analytics might also help companies to retain talented employees by using data to identify patterns that point to a risk of them moving on. Despite these transformational claims, very little is known about how People Analytics work is actually performed by People Analytics experts.

A false dawn?

In their ethnographic study conducted at a large European multinational corporation, Jörden, Sage, and Trusson report on the lived experiences of these People Analytics experts. They explain how these skilled practitioners experience a series of tensions and compromises that suggest People Analytics may fall short of its promises to generate transformational organisational benefits.

They found a considerable gap between how they wanted to develop products and how they were able to in their actual practice. The research shows despite their significant analytical abilities and skills, the work of the People Analytics experts is often limited to the development of quick and simple solutions that compromise scientific methods, data quality, and rigour. For example, People Analytics experts are asked to develop data dashboards for senior managers to demonstrate project success quickly, although they themselves were not convinced that the information within these dashboards provided any real added value to the organisation. So, instead of applying themselves to achieving a more data-driven approach to HR for the organisation the primary focus of the People Analytics team was often limited to the promotion of a ‘data-driven’ approach to HR. For example, managers were often more interested in the presentation of new People Analytics products at customer trade fairs than in what the products actually offered customers. 

These tensions and compromises led to significant cynicism among the People Analytics experts themselves, who were often not convinced of the value of their work and deliberately distanced themselves from it.

Data driven or ‘getting the job done’?

Particularly noteworthy in the study is the tendency of People Analytics experts to neglect scientific rigour (e.g. data quality) in order to meet management demands for ‘getting the job done’ and ‘creating the right impression’. The dominance of these business demands presents a significant barrier to high-quality data-driven HR decision-making, and people analytics products may potentially present a false impression of being based on scientifically-credible methods.

Implications for practitioners

Managers are fascinated by the glamour of data-driven decision-making. However, they pay little attention to the internal processes and systems that need to be put in place for such 'data projects' to deliver strategic benefits. Jörden et al suggest that managers responsible for implementing people analytics pay special attention to the following aspects:

  • Provide sufficient time and space for People Analytics experts to develop projects where critical thinking is encouraged and required. Doubts, questions and alternative approaches must be encouraged and welcomed at all times.
  • People Analytics projects should not be considered primarily as a means to promote a ‘data driven organisation’ but should instead be primarily seen as enabling better HR decision-making. Rather than draw wild interpretations, senior managers should listen to experts who are able to better interpret data. 
  • People analytics projects must recognize the value of openly and transparently communicating the limitations of the data and analytics.

You can read the full paper, along with recommendations here.