The HR Research Institute (HRRI) at HR.com has released findings indicating that while organizations are making measurable progress in people analytics capabilities, significant challenges remain in translating data into strategic business impact. The study reveals that only 22% of companies rate themselves as 'very' or 'extremely' effective at maximizing their HR analytics potential, highlighting a substantial gap between data collection and practical application.
On a positive development, the research shows marked improvement in data evaluation skills among HR professionals. Currently, 50% rate their organization's capabilities in evaluating and understanding people analytics data as 'good' or 'very good,' representing a significant increase from 36% in 2021. This growing proficiency suggests organizations are becoming more comfortable with HR-related data analysis.
However, the study identifies persistent obstacles preventing full utilization of people analytics. A primary challenge is integrating business data with HR data, with only about one-fifth of organizations consistently achieving this integration. This limitation prevents companies from developing a comprehensive view of their workforce in relation to broader business objectives.
The research outlines three major challenges facing organizations in people analytics implementation. Forty-seven percent of respondents cited integrating disparate data sources as a primary obstacle, while 41% identified difficulty implementing programs based on analytics-derived decisions. Additionally, 33% reported challenges with distributing and communicating data effectively across their organizations.
Debbie McGrath, Chief Instigator and CEO of HR.com, noted that while progress is evident in how organizations gather and analyze HR data, significant work remains in translating insights into actionable strategies. She emphasized the need for organizations to move beyond data collection and focus on making data-driven decisions that create real business impact.
For HR vendors and industry professionals, these findings carry important implications. As organizations increasingly recognize the value of data-driven decision-making, the ability to effectively leverage people analytics becomes crucial for competitive advantage. Companies that overcome the identified challenges may gain significant benefits through more informed workforce decisions that align with overall business strategies.
The study underscores that investment must extend beyond data collection and analysis tools to include developing skills and processes for turning insights into concrete actions. This may involve improving data integration practices, enhancing communication of analytics findings, and developing effective implementation strategies for data-driven programs.
As the field of people analytics continues to evolve, organizations that successfully navigate these challenges are likely to see improved workforce management, more effective talent strategies, and better business outcomes. The full research report, HR.com's State of People Analytics 2024-25, provides detailed insights and recommendations, while a recorded webcast presentation, How to Boost People Analytics Effectiveness in Your Organization, offers further guidance on improving HR data practices.
