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New Josh Bersin Company study reveals continued growth in People Analytics
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However, progress is limited. Only 10% of People Analytics teams at 470 global organizations are engaged in business-level projects
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If People Analytics doesn’t become systemic and more business-oriented, warns the advisory firm, it risks losing investment and support, leaving the CHRO without valuable insights that could drive impact.
The Josh Bersin Company, the world’s most trusted human capital advisory firm, today issues a warning to the people analytics profession: embrace AI and reposition yourselves as providers of “Systemic Business Analytics”—or risk being sidelined.
Despite years of effort, only 10% of the organizations analyzed in the Definitive Guide to People Analytics are consistently achieving the highest (Level 4) impact with their internal People Analytics teams. This is concerning because one of the biggest drivers behind HCM software is improving access to people-related data.
It also continues a trend of the gradual acceptance of People Analytics as a C-suite tool. Companies have tried to understand the impact of people investments—such as, pay, training, mobility, hybrid work—on the business. This demand has driven the rise of a specialized discipline staffed by data scientists, industrial psychologists, statisticians, and experts in organizational and behavioral sciences.
And while today’s AI-powered HCM systems companies can understand human capital investments as well as every other financial area, People Analytics practitioners still struggle to deliver business-facing, strategic insights.
That’s despite the fact that three out of four organizations have established dedicated People Analytics teams, with 73% investing in People Analytics technology and 69% of managers utilizing people data to inform their business decisions.
The challenge is that much of this information remains siloed. People Analytics leaders are perceived as generating reports that reach only a limited audience. As a result, executives are increasingly gathering information in less structured ways to enable faster decision-making.
To prevent being marginalized, the report advises People Analytics teams to transition towards what Josh Bersin Company describes as “Systemic Business Analytics.” This shift would transform People Analytics from today’s academic, research-oriented HR discipline into a more practical, action-driven business function focused on prioritizing, quantifying, and addressing the most urgent business challenges.
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Systemic Business Analytics practitioners could more effectively contribute to critical inquiries such as, Where should we establish our new distribution center? and What characteristics differentiate our most successful store managers from those who are less effective? Moreover, the advisory firm shows, organizations that have embraced Systemic Business Analytics are:
- 3x more likely to exceed their financial targets
- 3x more likely to delight customers
- 8x more likely to accomplish high levels of workforce productivity
- 4x more likely to engage and retain employees
- 9x more likely to adapt well to change and
- 7x more likely to innovate effectively.
The study, conducted in collaboration with thought partner Visier, suggests fostering a supportive culture, implementing the right technology, and developing essential skills to achieve Level 4 status in People Analytics is necessary. This involves promoting a data-driven mindset and ensuring that access to data is democratized, enabling leaders to utilize real-time insights for informed decision-making. Ultimately, embracing advanced analytics technologies, such as AI and predictive analytics, is vital for effectively implementing Systemic Business Analytics.
Stella Ioannidou, The Josh Bersin Company Research Senior Director, says:
“Systemic Business Analytics represents the smart, cohesive, and integrated use of high-quality people, operational, work, and sales data to make critical decisions about the future of the organization. Driven by AI-powered analytics technology and leveraging labor market insights, it will help to address your most complex and pressing business challenges.”
Kathi Enderes, SVP of Research and global industry analyst at The Josh Bersin Company, says:
“The professionals in People Analytics are committed, talented, and diligent. However, the challenge has been a longstanding emphasis on data collection rather than addressing the actual needs of the business and solving its problems. We hope this serves as a wake-up call to recognize the bigger picture.”
Josh Bersin, global industry analyst and CEO of The Josh Bersin Company, says:
“As we approach 2025, People Analytics remains a work in progress, even after all the years we’ve been doing it. So it’s essential to take a step back and reevaluate.
“The silver lining here is that many management decisions within organizations continue to be made without data. This presents a significant opportunity for People Analytics to make a meaningful impact, provided it is presented in a manner that resonates more effectively with the business.”
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