As organizations all over the world continue to grapple with record skills shortages and an ever-changing labor market, people analytics technology (and access to real-time labor data) has never been more important. people analytics technology plays a critical role in today’s talent acquisition strategies but securing investment isn’t always easy.
Did you know? 85% of businesses either have or expect to have shortages in critical skills, a report from PwC found.
In this blog post, we’re going to share seven tips to help you secure executive buy-in and budget sign-off for people analytics technology and labor market intelligence.
Table of contents
- How do you build a compelling business case to secure investment in people analytics?
- Team up with key stakeholders across the business to understand their objectives and the problems they're facing.
- Alter your messaging based on audience.
- Draw up a list of priorities that need investment right away and what can wait a bit longer.
- Review your current technology and people analytics platforms and work out which ones make the biggest impact.
- Use data in your business case to support process optimization.
- Include a level of contingency in your budget so you can be agile and react to changing market conditions.
- Be upfront with potential roadblocks.
How do you build a compelling business case to secure investment in people analytics technology?
As a starting point, you must show stakeholders what benefits people analytics technology and labor market intelligence would bring to your company. Think about the talent challenges you and your team face and how people analytics can help. Link the benefits to the problems individual stakeholders are having too. For example, if you have a stakeholder who is struggling with retention in their department right now, explain how a real-time labor market intelligence platform could help to identify the triggers that are causing employees to leave. This will make a clear connection and show why your budget request is so important.
So, what are the main benefits of people analytics?
- People analytics technology provides real-time insights into hiring trends, salaries, local market talent availability, diversity metrics and more.
- It allows talent acquisition and HR leaders to make informed decisions and gives them the opportunity to react to changing market conditions at speed (rather than having to wait for data that’s already a few months old).
- People analytics and real-time labor market intelligence can help to identify things that trigger turnover – something that’s critical in the age of The Great Resignation. If your company has had an uptick in turnover, people analytics can help you find out why so you can come up with a strategy to nip it in the bud.
- Real-time labor market intelligence ensures your organization can make competitive offers to candidates as you can conduct compensation benchmarking, something important in today's candidate-driven market.
#1: Team up with key stakeholders across the business to understand their objectives and the problems they’re facing.
Create a list of the talent acquisition objectives that your stakeholders have and ask them what challenges they’re facing when it comes to talent – both from an attraction and retention point of view. And then explain how people analytics technology could help. For instance, if your company is struggling to get candidates past the offer stage, you can conduct compensation benchmarking using real-time labor market intelligence to see how your offers compare to industry competitors.
#2: Alter your messaging based on audience.
When trying to secure executive buy-in for investment in people analytics it’s important to remember that each stakeholder will have different concerns (and priorities). Adapt your message appropriately. For instance, CEOs will be concerned about maximizing growth and CHROs will be concerned about securing top talent while the CFO will focus on lowering spend and increasing profit margins.
#3: Draw up a list of priorities that need investment right away and what can wait a bit longer.
Consider splitting your people analytics budget into stages – what you need to spend to achieve immediate goals, short-term goals and long-term goals. Remember, all priorities should align with overall business goals. If, for example, you know your company is planning to launch a new office, sourcing a real-time labor market intelligence platform should be something you do before you start thinking about where to locate your new facility as it will give you the chance to see which areas have suitable talent pools and so on. Researching which platforms will be most suited to your needs takes time, so add this into your timelines.
#4: Review your current technology and people analytics platforms and work out which ones make the biggest impact.
Do the people analytics platforms you currently have generate more productivity, or do they provide improved data visibility? They should! Use your findings to spot the gaps in your people analytics tech stack and determine if the tech interacts with other platforms within your talent acquisition tech stack. You can then include the platforms that you’re missing in your budget along with the reasons why your talent acquisition function would benefit.
Why is leveraging people analytics imperative to your long-term approach to talent acquisition?
Previously, during periods of economic uncertainty, companies would typically make knee-jerk reactions when it came to talent acquisition. Some would pause hiring completely, while others slashed their talent acquisition budgets. However, the ups and downs in business cycles are trending shorter than they used to be. Historically, a recession, for example, could last years, but now it might be months. In fact, the downturn that was brought on by the COVID-19 pandemic only lasted for two months in the US, according to the National Bureau of Economic Research. It was the shortest recession on record in the country. Many companies took drastic action when the recession took hold though – some made layoffs, which meant they struggled with high demand when the market picked up so sharply. And this caused dips in production, which then contributed to supply chain issues and record levels of inflation. A considered approach is critical when the market fluctuates again (and it will in due time). People analytics technology that use real-time labor market intelligence can prevent organizations from making rash decisions as talent leaders can step back and look at real-time data for more informed decision-making. For example, when markets begin to slow down, talent leaders that use real-time labor market intelligence will know this long belong it makes headlines. The same notion applies when markets pick up following a downturn – talent teams with access to real-time labor market intelligence will be able to see this happening and alter their talent acquisition strategies accordingly, gaining a competitive advantage as a result.
#5: Use data in your business case to support process optimization.
Devise a base cost for improvements in your people analytics strategy that would include the absolute minimum investment required and then show the impact that further investment would bring. For example, people analytics technology that uses real-time labor market intelligence could speed up acceptance rates since you can use the tech to research what competitors are offering candidates to make sure your offers are just as competitive. It’s important to reiterate that although the initial outlay may be substantial, there are recurring benefits to be gained and benefits from people analytics can be realized straight away.
#6: Include a level of contingency in your budget so you can be agile and react to changing market conditions.
Additional resources may be required to meet hiring objectives in tight talent markets. A lot of companies have invested in people analytics and HR tech in the last year or so to expedite hiring processes and find where people with the required skillsets are located. Leave room in your budget for these considerations.
#7: Be upfront with potential roadblocks.
Talent leaders should be honest about any obstacles they foresee with people analytics that could impact the talent acquisition strategy and proposed budget. For instance, you might not have the resources to analyze the data properly and should consider expanding your team or launching a training program before you can use the tool and data effectively. Managing expectations is important. Forewarned is forearmed as the saying goes!
The right level of investment in people analytics technology can transform your talent program into a strategic, business-impacting function. Simply put, you can’t use yesterday's labor data to make tomorrow's decisions.
Want to make faster, smarter decisions with real-time labor intelligence? Claro Analytics can help!