People Analytics: Q&A with Paylocity's Ted Gaty

February 05, 2019

SVP of Product & Technology Ted Gaty answers questions about the value of people analytics in HR, including productivity, engagement, and diversity.

Meet Ted

Ted oversees all aspects of Paylocity's innovative software solutions and infrastructure. His strategic agenda includes accelerating product speed to market, scaling the organization to significantly expand product development capabilities, scaling our infrastructure, continuing a fundamental shift to a mobile-first development paradigm, and expanding the actionable analytics provided to customers. Ted's experience in the industry spans more than 20 years. Prior to Paylocity, Ted worked at Aon Hewitt where he most recently served as the Chief Information Officer, Benefits Administration. In this capacity, Ted led a global team of over 1000 technologists fueling nearly $1.5B in revenue. He pioneered the firm's entrance into mobile solutions, an innovation recognized in the InformationWeek 500 in 2011, and was a member of the Aon Hewitt Senior Leadership Team. 

In your own words, define “People Analytics.” 

People analytics are a mindset shift to understand your organization beyond just the numbers. Headcount, turnover, and tenure are helpful metrics, but people analytics are really about uncovering more meaningful insights that drive better workforce decisions, productivity, and business outcomes. For example, people analytics can help organizations explore how changes to an internal program will affect their workforce. Subsequent to those changes, organizations can measure business outcomes by looking at the impact it has on revenue, profit, customer satisfaction, and efficiencies. 

How do companies collect this data? 

The good news is, companies already have it by virtue of their payroll and core HR data! They can start by utilizing their payroll software and any HCM vendors in order to capture insights around compensation, performance, turnover, workforce composition, etc. Capturing this large set of data in a single source enables and provides more opportunities to help predict potential outcomes. 

Why have we seen a surge in People Analytics? 

As HR becomes increasingly digitized, our expectations around data and how much is captured, retained, and leveraged has dramatically changed. Understanding that mountain of data is overwhelming, so HR professionals are looking for software solutions that help make sense of it all. For instance, in a tight labor market, retention is a key metric for all organizations. With the ability to bring many data points together like drive time, manager churn, pay comparisons, and even job searching activity, HR professionals can predict potential turnover. That’s powerful and makes just looking at a single data point like retention a thing of the past. 

Why are People Analytics important to HR? 

People analytics are important to HR because of the rapidly changing labor market and how they can potentially impact existing and future workforce plans. Essentially, people analytics can help organizations make better informed decisions that drive business outcomes and help organizations stay competitive. 

What can people analytics teach payroll & HR professionals? 

People analytics can help HR professionals unpack large sets of data that link to better workforce decisions, higher employee and manager productivity, and an increased ability to develop a highly talented workforce. These outcomes lead to better business results and an improved competitive advantage. For example, data-driven insights can reduce turnover, increase recruiting effectiveness, drive engagement, mitigate high retention risk employees, and connect people strategy to business outcomes. 

How can analytics help address issues such as productivity, engagement, & diversity? 

There’s strategic value in ensuring that an organization is boosting employee engagement. Organizations that make an effort to increase engagement can see material rewards depending on how metrics are measured. For example, analytics can address engagement issues by embedding machine-learning capabilities in company engagement surveys. The results can identify the overall sentiment of the workforce and can provide an engagement score based on several data points. Studies have shown that companies with greater gender and ethnic diversity are also more likely to have better financial outcomes than their industry peers. Analytics can help address diversity and gender pay equity differences across various departments and identify patterns of employees at risk of leaving. These insights can help organizations optimize plans around hiring, compensation, or retention. 

What can organizations do to minimize security risks associated with HR data? 

It is the organization’s responsibility to enforce (and reinforce) that security is at its maximum level given the sensitive nature of this information. There needs to be appropriate ownership across the organization and HR should follow processes established by a data security team. 

How can dashboards make analytics easier to understand? 

Dashboards help make large sets of data more visual, as well as easier to contextualize and understand. The use of dashboards empowers HR professionals to quickly view different Key Performance Indicators (KPIs) and trends to determine if there are any glaring issues for different time periods. At the end of the day, dashboards should make HR professionals more effective and strategic in the key decision-making process. 

When selecting an HCM system with reporting & analytic capabilities, what should a buyer consider? 

Buyers need to consider whether reporting and analytic capabilities are presented in an easy to understand way that answers important workforce questions. Reporting and analytic capabilities should be the most comprehensive, cost-effective, and meaningful workforce-planning tool for the organization. 

Where should people start? 

I recommend making people analytics and reporting a high priority for your organization. There’s a lot of data out there about your workforce and if you can take that data and make use of it with advanced analytics, then you will start to optimize your workforce and design programs that improve key HR metrics. Ultimately, this will help connect workforce insights to business outcomes impacting key business metrics. 

Anything else? 

People analytics do not have to be mysterious or complex. Organizations have more data than they realize and it’s just a matter of creating the right processes and practices in order to better interpret the data in meaningful ways. Once a data plan is put in place, organizations can make sense of their workforce analytics, as well as better understanding of the labor market data and trends. 

Learn more about analytics, dashboards, & reporting.