Why Small Businesses Need People Analytics, Too

For decades, people analytics has served as a vital tool for large corporations to gain insight into their extensive, at times global, workforce. 

Major players like Ford or Panasonic have recognized the value of analytic insights in identifying regions grappling with turnover issues or pinpointing effective managerial leadership. 

However, the potential benefits of people analytics are not exclusive to big brands. Small businesses are also primed to leverage people insights to their advantage—in fact, they’re perfectly poised to get the most out of these insights.

Here's why.

People analytics will save you time

Understanding headcount changes past, present, and future is essential to running a smooth business. People analytics makes this often laborious task simple and easy.

Imagine having an extra employee in your HR department. People analytics works that way by bringing a virtual analyst to your team. 

With small and medium-sized businesses (SMBs), optimizing the headcount budget is crucial. Particularly if you want to better manage expenses while maximizing productivity and profitability. Every hire represents a significant investment, as you must ensure that each employee contributes to the success and growth of the business. 

But your HR department might consist of just one or two individuals. Or maybe you're an owner juggling multiple roles. 

Using people analytics can swiftly address workforce questions such as budgeted pay vs. actual pay year-over-year in seconds. This level of insight can save business owners valuable time and resources. 

People analytics provides the insights needed to inform the overall financial sustainability and vitality of the business. This further ensures prudent decision-making that directly impacts the health of the business's bottom line.

It provides more than just a snapshot in time

Build custom dashboards to visualize your company’s key people metrics in real-time

Reporting and people analytics serve distinct purposes when it comes to workforce management and decision-making.

Reporting typically involves the compilation and presentation of data in a static format, offering a mere snapshot of specific metrics or key performance indicators (KPIs) at a particular point in time. While they provide valuable information about past events or trends, reporting alone has limitations in providing deeper insights or facilitating proactive decision-making.

On the other hand, people analytics goes beyond reporting by providing a dynamic and continuous assessment of the workforce and the overall health of the business, offering real-time insights into various aspects of employee behavior, performance, and engagement.

So what does this imply for your business?

SMBs often operate in fast-paced environments with limited resources and functional expertise. Relying solely on traditional reporting methods can lead to incomplete or outdated information, leading to misguided decision-making.

People analytics addresses this challenge by providing SMBs with timely and actionable insights derived from ongoing analysis of workforce data. This comprehensive view of workforce dynamics and business performance in real-time enables SMBs to make informed decisions promptly, adapt to changing circumstances, and mitigate risks effectively.

People analytics confront the expertise barrier

Use the insights from people analytics to understand the driving factors behind resignation so you can mitigate them before getting hit with high turnover costs.

When margins are thin, it’s difficult to justify the expense of specialized analysts. What small and medium-sized businesses often lack in specialized knowledge or resources to uncover valuable insights about their operations and workforce, they can make up for with people analytics. People analytics solutions, particularly those powered by artificial intelligence (AI), can reveal insights that may not have been considered by SMBs.

Analytics can bridge the expertise and expense gap by autonomously analyzing vast amounts of data to identify patterns, trends, and correlations that may not be immediately apparent to human observers. For example, AI-powered analytics can detect subtle correlations between employee engagement levels and productivity or uncover hidden factors contributing to employee retention and turnover.

People analytics help you better understand retention

Compare using benchmarking specific to your industry or company size so you can understand how you’re performing in relation to other businesses like yours.

Retention is a big deal for small businesses where, often, a single employee wears two or three hats. High turnover, as a result, may hurt SMBs more than larger ones that have the funds to quickly rehire or have multiple people in the same role who can cover any gaps

That’s why understanding the factors that drive turnover and retention and calculating the cost of it correctly should be a top priority for any small business.

People analytics lets you analyze various data points such as employee demographics, performance progress, engagement stats, and tenure to identify who's at risk of leaving the organization. This proactive approach allows SMBs to intervene early and implement targeted retention initiatives.

By analyzing factors contributing to turnover, people analytics lets SMBs pinpoint the root causes of attrition. Understanding these drivers enables businesses to address underlying issues and improve employee retention with strategies tailored to their specific workforce and organizational culture.

Your finances will also be healthier. 

People analytics shows you which employees are at risk of leaving based on various factors such as engagement levels, performance trends, and demographic data. By detecting these flight risks early, you can intervene with targeted retention efforts and reduce your turnover rates.

By comparing the costs of hiring and training new employees with the costs of retaining existing talent you can save money and make informed decisions about better investing in retention strategies.

More companies will turn to AI to discover trends and hidden insights impacting their retention strategies and associated costs. You should also consider adding generative AI to your tech stack to:

• Get better people insights. By incorporating generative AI, you can ask questions and receive immediate insights without the hassle of deciphering tables or charts. 

• Grow your revenue. GenAI transforms your analytics platform into a lucrative asset that enables you to stay ahead of competitors and attract better candidates.

• Innovate faster. Artificial intelligence provides instant answers to complex workforce questions, giving you a competitive edge and long-haul growth opportunities.

The bottom line is people analytics provides a view into the health of your workforce—whether it’s 100,000 people or 100. Small businesses stand to gain huge benefits by understanding their people better—cost savings from understanding and predicting turnover before it happens and by providing analysis in real-time even without adding analyst headcount. People data insights provide the foundation for building the most effective workforce strategies that ultimately take your business to the next level. 

About Visier

Visier is the recognized global leader in people analytics, workforce and compensation planning, embedded solutions, and genAI for people answers. At the core of Visier’s innovations is a simple premise: People impact is business impact, and you can’t manage what you don’t measure. Visier gives people-powered organizations the tools and insights to drive productivity, performance, and business outcomes through people impact. Founded in 2010 by the pioneers of business intelligence, Visier has over 50,000 customers in 75 countries, including enterprises like BASF, Panasonic, Experian, Amgen, eBay, Ford Motor Company, and more. Visier is headquartered in Vancouver, BC with offices and team members worldwide. 

For more information, visit www.visier.com.