People analytics have become an essential aspect of workforce management. In recent years, almost everything has been quantified because numbers paint a better picture of efficiency and give better insights into current strategies than anecdotal evidence, or at least that's the thinking.
According to The Atlantic, this trend was started by Billy Beane and the Oakland A's in 2003. During that season, the team won 103 games and went on one of the greatest winning streaks in baseball history. What's most impressive that this was all done through minimal spending and a roster full of overlooked prospects and big-league veterans.
The A's relied on a model which compared a player's production to his maximum salary. Through this system, Beane was able to find great talent for little money. He even uncovered some players who would go on to be superstars before they were even on anyone else's radar.
The Atlantic points out that other baseball franchises were quick to adopt this model, but now it's moving to other fields. The news source asserts that some businesses have started to use the system for workforce management, and many more are expected to jump on the bandwagon in the coming years.
Defining people analytics
The process in human resources is pretty much the same as it is in baseball – you determine how much value someone brings to your company and make your staffing decisions from there. You're not looking for people's on-base percentage and number of pitches per at bat, you're analyzing how much revenue they generated and detailed analysis of where people thrive versus where they fail.
One enterprise that's had a lot of success with this is Google, TLNT notes. The average employee earns approximately $200,000 in profit and nearly $1 million in revenue for the search engine, which shows that people analytics can be quite effective.
Here are a few key components to Google's success. First, every department adheres to the philosophy, ensuring that each staffing decision is made because it was justified by data. Second, there's an algorithm that calculates exactly how much value employees provide.
Third, and perhaps most important, Google has the PiLab, a department whose sole function is to study the staff's behavior and which strategies are most effective for boosting productivity.
While not every company can afford a special department to help boost productivity, the role of the HR department considering Google's steps and philosophy may be the answer to a new level of employee success.