PEOPLE ANALYTICS AT

GOOGLE
Analytics, the new golden rush of HR practices

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 TABLE OF CONTENTS

1. Abstract………………………………………………………………………………..……………..3
2. Introduction………………………….…………………………………………...…………………..3
3. Development ………………………………………………………………………………………...4
4. Framework……………………………...……………………………………………………………4
5. How does it work?………………………...………………………………………………………….5
6. Steps involved in performing it…………………………...……..…………………...……………….6
7. How is it practically applied?……………….……………...…………………...…………………….6
8. People Analytics at Google…………………………...………………………………………..……..7
9. Case Studies……………………………...…………………………………………………………10
10. Future……………………………...………………………………………………………………12
11. Conclusion……………………………...…………………………………………...……………..13
 Abstract
We live in the world where technology is rapidly evolving, humungous amount of data is generated,
approximately 50,000 GB per second, and SMAC (Social Mobile Analytics Cloud) is ruling it. In this
project, we will study, People Analytics, the new golden rush of HR with a technological backing and
data driven decision making, with special reference to its pioneer, Google and other case studies on
different companies. The basic concept on the decision making using People Analytics on various
aspects of HR, benefits and future of this technology are investigated by way of secondary research
on the topic.

Introduction
People Analytics is defined as, “The practice of making data-backed people management decisions
within an organization. Most frequently referred to in recruiting, hiring, promotion, leadership,
performance evaluation, compensation, and other people-oriented processes.”1It is a combination of
technology, applied statistics and expertise to large sets of talent data, which helps in making better
management and business decisions for any organisation. It is a new and disruptive domain for most
HR departments. Nowadays, companies are looking to better drive the return on their investments in
people. The old approaches of gut feel are no longer sufficient. It helps organisations to make smarter,
more strategic and more informed talent decisions. With people analytics, organisations can find
better applicants, make smarter hiring decisions, and increase employee performance and retention.2
Fig. 1 shows the components of people analytics.

The different aspects of HR where analytics

can be used for constructive and better
decisions are given in Fig. 2(a). Fig. 2(b)
shows the cumulative constituents, that are the
aspects, technology and managerial decisions.

Fig.1: Components of People Analytics

Fig. 2(a): Aspects of HR Fig. 2(b): Cumulative Constituents for better decision

1
https://ideal.com/what-is-people-analytics-a-5-minute-intro/
2
https://www.cornerstoneondemand.co.uk/glossary/people-analytics
3
 Development
According to Lisa Donchak, people analytics thought leader of the Wharton School, people analytics
evolved from a few handful of early pioneers facing massive headwind, to a large community of
practitioners. Interest has exploded and people really want to do this. Since the launch of the first
People Analytics Conference, two or three more have become prominent in the space of 18 months.3
So, what's driving this interest? The following are the main reasons:

1. Acceptance

Donchak explained that there is simply more acceptance that data can help make hiring decisions,
even in comparison to a couple of years ago. In general, there is more acceptance about data being
able to help in making business decisions in spaces outside of HR. Hence, using data in the HR space
is a logical progression.

2. Data Abundance
Many business leaders have access to an unprecedented amount of data, but they're not quite sure
what to do with it. "The biggest component of this excitement is the fact that the data finally exists; if
it doesn't exist, there are methods of collecting it in bulk," Donchak said. "Even 15-20 years ago, there
were very few institutions rigorously collecting this data about anything, much less about their
employees or who they might want to hire."

3. Technology
Contemporary computer technologies provide storage options that make the data easily accessible, and
new tools to make it easier to work with.

Framework

Fig. 3: Main pillars to launch People Analytics

3
http://blog.bonus.ly/people-analytics-talent-management-evolved/

4
 How does people analytics work?
After having seen what people analytics is all about, in this section we will see how people
analytics work with the help of some basic examples.

Fig. 4: Sample data relating weather and

children playing outside

Fig. 5: Decision tree formed after predictive

analysis of people

The above images show how people analytics is performed to predict if children would be
playing outside or not.

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Steps involved in performing people analytics at work place
Step 1: Initiate a culture with data-based decision making as underlying principle
A data-based decision making culture is characterized by collecting data, analyzing
information, and performing tests. Encouraging innovation, bearing mistakes, and emphasizing
continual learning all help to create this type of environment. In a data-based decision making
culture, insights revealed by the data – rather than opinion or gut feel – are given importance.

Step 2: Identify the questions you want to answer

Assess your current issue points. What’s troubling your company the most right now?
Remember to be specific and start on a small scale by setting a reasonable target. Think of a
hypothesis based on a problem you’re experiencing and that you think data will help resolve.
Based on this hypothesis, determine what needs to be analysed and what data needs to be
collected.

Step 3: Gather the data

Based on step two, decide on what information you want to collect. Use appropriate data
measurement tools and software to ensure data is being captured in an unambiguous way.
People analytics software is emerging for all areas of recruitment and talent management, and
many companies offer reduced prices for early adopters of their product. This software will
look for patterns in your data.

Step 4: Interpret the outcome and build plan of action

Based on the results of your data analysis, figure out the story your data reveals. Then determine
which actions can be taken based on the same. Implementing those actions and then following
up on their outcomes is what makes people analytics a powerful strategic tool.

How HR predictive analytics apply in practice

Now, how do predictive analytics apply to HR in companies? HR possesses a massive amount

of people data. By applying predictive analytics to this data, HR is able to become a strategic
partner that relies on proven and data-driven predictive models for people management, instead
of relying on gut feeling and soft science. HR predictive analytics enable HR to predict the
impact of people policies on the well-being, happiness and productive/bottom line performance
of employees.

However, only few organizations are capable of producing effective models for HR. According
to Deloitte’s Global Human Capital Trends (2016) report, only 8% of the organizations
worldwide had this capability in 2015. This rapid growth can also be seen in the number of
companies who consider people analytics as an important scenario.

A lot of organizations still have a lot to learn before they can produce predictive people
analyses. Despite this, early adopters already have already shown some very interesting results.

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 People Analytics at Google
Google, the tech giant centred in Mountain View, California, has a number of times bagged
prestigious awards like “Best Place to Work”, “World’s most attractive employer”, etc. But all
this is possible because of the efficient human resource management policies and practices at
Google. The company is currently having more than 50000 employees working in different
roles related technical, non-technical, and leadership domains. Google’s HR practices and
policies are attributed to be one of the most important factors behind Google’s success.
Providing its employees with all-you-can-eat gourmet food, in-house barber shops, ergonomic
advisors, and sleeping pods Google has been a dream company for a lot of people especially
software engineers.

The HR team in Google is known as People Operations team. The people operations team along
with the administrative staff are considered to be curious and creative employees who anchor
other employees to their foundations and help them shoot for the moon. The People Operations
team at Google has the mantra "find them, grow them, keep them," and is dedicated to staffing,
and developing a distinct and inclusive culture.

A dramatic shift in the HR practices of Google was observed after Laszlo Bock was appointed
as the person heading its People Operations team in 2006. Laszlo partnered with the company
CEO’s to make it grow from 6000 to 60000. Laszlo was of the belief that using data
management in HR practices, he would be able to make more reliable and scientific decisions
as are taken for any other finance or marketing project. To start with Laszlo formed a people
analytics group that would use data analytics to refine the HR practices of Google. In 2007,
Prasad Setty was hired from CapitalOne to head this people analytics team. The challenge
before Setty was to approach the human resource issues at Google with the same empirical
discipline that is used for decision making in Google operations. Then a small team of
statisticians was formed to introduce analytics in the domain of people management.

Project Oxygen
In 2009, the people analytics formed under Prasad Setty, began the first data driven people
management project of Google and named it as Project Oxygen. This project was considered
to produce far more important results for Google than a mere algorithm or an app. The main
objective of this project was to identify what successful managers do.

This project started with a basic assumption4 that people generally leave company for one or
more of the three reasons. The first of these three reasons is that people don’t feel a connection
to the mission of the company, or they don’t feel that their work matters. The second reason is
that the employees don’t like their co-employees. The third and the biggest reason is that they
have a terrible boss or manager. In Google, performance reviews are carried out quarterly,
rather than annually, and huge swings have been observed in the ratings given by employees to
their managers.

4 “Google’s Quest to Build a Better Boss”, Adam Bryant, New York Times, March 12, 2011

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Google also found that managers had a much greater influence, on employees’ performance
and as also on how they felt about their job, than anything else.

“The starting point was that our best managers have teams that perform better, are retained
better, are happier — they do everything better,” Mr. Bock says. “So the biggest controllable
factor that we could see was the quality of the manager, and how they sort of made things
happen. The question we then asked was: What if every manager was that good? And then you
start saying: Well, what makes them that good? And how do you do it?”

As a part of Project Oxygen, the team collected more than 10,000 observations about managers
spreading across more than 100 variables. To collect the data the people analytics team
conducted various performance reviews, feedback surveys and also collected data from other
reports published in Google. Then the data collected was coded to infer patterns and useful
results from it.

After having established some working theories, the team figured out a system to gather more
data by interviewing managers, and to find evidence that supported their notions. The last step
was coding and synthesizing the results — that included interview notes exceeding 400 in page
numbers — and then a period greater than an year was spent in spreading those results in the
team and inculcating the results into the training programs.

In this whole process coding was the most time consuming process as human interaction was
necessary to code the interview results into computer language.

The hypothesis taken up by the people analytics team initially was that managers are important.
But as they found collecting evidence, to support this hypothesis, difficult to find, thus they
changed the hypothesis to one that stated managers are not important. Based on the results
obtained from the data analysis the hypothesis was rejected and it was proved that mangers are
important.

As an outcome of this project, Google came up with eight factors or behaviours that a good
manager should reflect. These are:

 Manager should be a good coach

 Manger should empower the team and should not micromanage
 A good manager expresses concern/interest for team members success and their
personal well being
 A good manager should be productive and result oriented
 A good manager is also a good communicator
 Manager should help his team in career development
 Having a vision also distinguishes a manager and a good manager
 A good manger is one who is able to use his/her skills wisely

Mr. Bock and the people analytics team ranked these parameters in order of importance. One
striking observation of this project was that the coding skills of mangers, which are at the crux
of a technical job at Google, were least bothered by his/her employees. They rather had different
concerns which according to them their managers should address.
Once Google was able to identify and rank these eight characteristics, they began to improvise
their training programs to inculcate these eight behaviours in their managers. Coaching and

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perform review sessions were also used for the same purpose to communicate with individual
employees. The results of these implementations were soon visible. According to Mr. Bock,
“We were able to have a statistically significant improvement in manager quality for 75 percent
of our worst-performing managers.”5

Project Oxygen was just a start of people analytics at Google. There are various other ways in
which Google is using data analytics to manage its workforce. Some of these applications are:

People and Innovation Lab(PiLab)

People and Innovation lab team of Google also works for integrating science and data
management in improving its employees’ performance. Google has employed a number of
industrial & organizational psychologists, organizational sociologists and decision scientists in
their People & Innovation Lab (PiLab)6. The team is devoted to conduct research and develop
insights for improving the way how Google manages, supports, and develops its employees.
This team uses science and data to find out factors like rewards which make their employees
the happiest, and also to monitor the health of their employees by taking care of their calorie
intakes and eating habits.

Retention Algorithm
The people analytics team at Google has devised a mathematical model to predict which
employee is going to leave the company. Google treats its employees as its most important
resource and thus does not want to lose any of its efficiently working employees. This algorithm
looks for various factors like rating given to employee in last evaluation, whether promotion
given to the employee or not or has the employee raised any grievances. Based on these factors
the algorithm is able to calculate the odds of the employee leaving the company. Early detection
of who may leave the company helps the managers to take preventive actions to retain the
talent. The algorithm gives results such that the managers and the people operations department
of Google has enough time to act and resolve the issues which are making the particular
employee to leave.

Hiring Algorithm
To answer its hiring requirements Google has devised a hiring algorithm. This algorithm
screens through the large pool of applications and searches for the candidates which have
highest probability to succeed once they are hired. This algorithm also tries to find out the
candidates that would be fit to Google’s organisational culture. The algorithm gave a result that
having more than four interviews for selecting a candidate doesn’t create much significance
and this led to Google shortening its hiring process7. Google is a sort of organisation which not
only looks for the selected candidates but also for the rejected ones. Google, under its project
Janus, developed an algorithm for every large job family to analyse the rejected resumes and
to identify any top candidates who might have been missed while recruiting. Google found that

5
“Google’s Quest to Build a Better Boss”, Adam Bryant, New York Times, March 12, 2011
6
“Google re:Work: Shaping the Future of HR”, Evan Nesterak, thepsychreport, December 2, 2014
7
“How Google Became The #3 Most Valuable Firm By Using People Analytics To Reinvent HR”, Dr. J Sullivan,
EREMedia, February 25, 2013

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there was a miss rate of only 1.5% and as an outcome they also revisited some of these missed
candidates for hiring.

Besides above mentioned functions Google has been using people analytics for other purposes
as well like predictive modeling, where the models are made to use a ‘what-if’ analysis to
continually improve the forecasts they make about upcoming people management problems
and opportunities. Data and analytics are also being used at Google for better workforce
planning, calculating the value of top performing employees to the company and making more
effective workforce. Google has clearly exemplified how analytics and data can be used to
manage various aspects of human resource management.

The fact that Google is perhaps the world’s only company using data analytics in people
management at such a large scale, can be attributed as one of its success factors. Google’s
people analytics approach has resulted in Google producing astounding workforce productivity
results that only a few can match.

Case Studies: Other Companies Using People Analytics

With computing spanning every sphere of human life, Human Resources management as a
discipline has also not been spared of it. For years, companies relied on hunch and traditional
ideas about what works and what doesn’t to hire, groom and keep employees. But with
‘millennials’ making the traditional assumptions and ways of Human resources management
dated and of little use, it has become but essential to find out what they want, what works and
what doesn’t with them as also new ways to get the best out of them by catching up with their
ideas of a career and development. It is here that computing is aiding the Human Resources
Management practice. Companies are collecting data, trying to figure of the patterns and trying
to work from thereon to devise solutions to not only keep the employees but keep them engaged
for higher productivity.

With this backdrop and after having seen the success story of Google by using people analytics,
we present the following case studies where companies have successfully used analytics and
data for effective Human Resources Practice.

Microsoft

Microsoft, the technology behemoth, is a data driven organisation. Its success lies in the fact
that its products remained relevant through time. Armed with this history of hitting high value,
Microsoft continues to foray ahead into time with data to back up its expeditions. To churn out
the best products, it has consistently kept a watch on the quality of people it hires and how. It
uses practices like Human capital reporting and Human capital analysis which were unheard of
half a decade ago. It has an HRBI team- Human resource business insights team- comprised of
mathematicians, statisticians, psychologists and finance wizards.

The HRBI team understands talent through data. It conducts various practices like Exit Poll
Survey to analyse using data as to why people left, for what people left or stayed, etcetera.

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The HRBI team also owns the HR data warehouse that managers have access to for making
critical decisions on attrition, diversity and staffing.

The HRBI team works within the Value your talent framework (VTF). There are 4 stages of
VTF:

1. Data Collection: Microsoft collects a lot of data or we should day quality data. It has
an enviable grasp of the nature and size of its workforce
2. Applying definitions: It clearly defines at the outset the scope and meaning of different
terms viz. “Early attrition” or “Quality of Hires”, etcetera
3. Analyse: It uses predictive analysis to estimate the Quality of its Hires but such
evaluations and estimates are looked at and relevant from a collective rather than an
individual perspective.
4. Take action: Lastly, Microsoft uses the analysis and insights, acts on them and keeps
being the performer that it has been churning out the best and indispensable products
with the help of its high quality work force.

Wegmans

Wegmans is a supermarket chain which operated in New England and Mid-Atlantic before
expanding across geographies. But while it chalked and walked its expansion, it faced the
challenge of skyrocketing employee benefit obligation costs. This necessitated that Wegmans
understood how its employees perceived the benefits offered by the employer. This could aid
Wegmans to concentrate on offering those benefits that matter the most and will translate the
most into employee engagement.

Wegmans then used conjoint analysis to identify which benefits matter the most, why
employees join, what makes they stay and what makes them leave. The conjoint analysis was
conducted by CEB, a best practices company, and was commissioned by Wegmans. Conjoint
analysis is typically sued in marketing. It is, simply stated, a pair-wise comparison among a
host of options, their various permutations. When presented with pair-wise comparison of
different health benefit options, employees ranked each of them and thereby helped CEB to
stack and rank offerings relatively.

Wegmans ran their survey for two weeks across its successful stores and saw a 76% response
rate from a randomly selected sample of 1,310 employees that was statistically representative
of their population8.

Wegmans moved forward with this initiative by attempting to explain to its employees the goal
of this survey. Its communication strategy was:

1. Brief store managers and send printed survey for circulation among the store employees
2. Teleconferencing by CEB to select unbiased samples of employees
3. Representatives walked survey participants through instructions on how to take the
survey

8
“Wegmans: Understanding how employees value their benefits”; https://rework.withgoogle.com/case-
studies/Wegmans-conjoint-analysis/

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The conjoint analysis asked participants two types of questions: Satisfaction questions and
Trade-off questions.

Both types of questions pointed out distinctly that healthcare benefits singlehandedly
influenced employees’ decisions to join and stay at Wegmans. The analysis indicated that a
$107 investment per non-eligible employee would cost $1.5 million but would feel like $32.5
million to the employees9.
Surprisingly, base pay was ranked at the bottom in terms of perceived value by employees.

In a nutshell, Microsoft and Wegmans have used data and insights from its analysis to its
advantage in HR practices. There are many more such cases with Google’s re:Work taking
heed of such initiatives and bringing the wonders of analytics in HR to the forefront.

Future of People Analytics

Analytics can provide deeper insight needed to keep employees learning with changing skill
requirements, identify the recruiting channels that provide best candidates, identify high-
potential employees and plan for successions in the organisation.

Analysts can look for patterns in HR data that can help companies improve hiring and reduce
attrition, and recognise areas where savings related to workforce can be achieved. Analytics
can be used to support training, development and other activities. Employees can be grouped
based on specific criteria, such as value to the company, role or generation. HR practices then
can be tailored for each segment.

Predictive Analytics can help us forecast retention, turnover, satisfaction of the employees. For
example, systems can assess numerous factors that correlate with employee dissatisfaction and
defection like not taking vacation time or being in one job for longer period and then flag high
performers at higher risk of parting from organisation. Thus giving managers a chance to take
pre-emptive action such as a new assignment or bonus to keep that employee engaged and
satisfied.

The “what if” option in analytics systems helps HR to assess potential future actions. For
example “how giving promotion to high-performing salesperson will affect the performance
and morale of other salespeople?” Or “how will restructuring of department affect retention
and performance of employees?” Managers can run several scenarios by adjusting variables to
come up with the actions that produce the best results.

Today, a growing volume of information is found in emails, social media, blogs and other
unstructured forms. Big data systems make it possible to include this unstructured data in
People analytics to cover a broad range of issues. For example, if a company is planning to
open a new facility in a new area, people data analytics could help it compare employment
costs and skills availability in different locations to help HR develop understanding of the

9
“Wegmans: Understanding how employees value their benefits”; https://rework.withgoogle.com/case-
studies/Wegmans-conjoint-analysis/

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employee experience in company operations and take actions to enhance employee satisfaction
and productivity.

The democracy of numbers also help to cut through the hiring noise and bias that can surface
even when those responsible have the best of intentions. For instance, a company receiving
250,000 job applications per year can reduce cost of initial resume screening by introducing
more advanced automation and improve screening effectiveness. The algorithm adapted by HR
takes into account historical recruiting data, including applicants past resumes, offers extended
previously and decisions on whether to accept or not. When linked to the company’s hiring
objectives, the model successfully identified candidates that are most likely to be hired and
automatically accepted them on to the next stage of the recruitment process. Those least likely
to be employed were automatically rejected. With a clearer field, recruiters were free to focus
on the remaining applicants to find the right fit. The number of women who passed on merit
through automated screening represented a 15 percent increase over the number of those passed
through manual screening10. The foundational assumption that screening conducted manually
would increase gender diversity was proved incorrect.
Attrition can be addressed by improving management. Example a major insurer that had been
facing high attrition rates first sought to offer bonuses to managers and employees who opted
to remain with minimal success. Later the company gathered data to help create profiles of
workers that were at risk of attrition. The intelligence included a range of information such as
demographic profile, professional and educational background, performance ratings and levels
of compensation. By applying data analytics a key finding was achieved that employees in
smaller teams with longer periods between promotions and working with low-performing
managers were more likely to leave.

Once these high-risk employees had been identified more efforts were made to persuade them
to stay by involving greater opportunities for learning development and support from a high
performing manager. Bonuses otherwise proved to have little effect. Thus, funds that might
have been allocated to ineffective rewards were instead invested in learning and development
of the employees and improved training for managers. Performance and retention both
improved with significant savings showing the value of data analytics.

When well applied, people analytics has greater impact and is ultimately more time and cost
effective. Overall, analytics technologies hold tremendous potential for HR. According to
researchers it helps in increasing the profitability and per employee revenue. It helps HR
strengthen organizational performance and plan proactively rather than operate reactively. And
perhaps can provide practical answers to the questions being asked by the business and best
answers how to manage and deploy talent in alignment with organizational objectives.

10
http://www.mckinsey.com/business-functions/organization/our-insights

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 Conclusion
Human resource is the most important resource organisations possess and to manage this
resource companies formulate a number practices and policies. People analytics, as we saw,
has been creating ground-breaking insights for improving these HR practices. As observed
through the people analytics practices at Google, that how a company can use data and science
in improving its managers effectiveness, employee performance, lower the attrition rate, and
hold on to the talent of company. Although Google is a pioneer in this domain but other
companies too have started following the footsteps of Google to effectively manage their
human resource. Human resource managers who use people analytics for managing their
employees, often cite that when every decision in their company is backed by some calculations
and data processing then why HR decisions, which involve a huge amount of resource of any
company, be taken just on the basis of intuition or gut feeling? Owing to this mindset, people
analytics has become a new trend of the day. But the results obtained from data cannot be
trusted with ultimate faith as the results can also be erroneous as these are data driven which
can be sometimes not very much authentic for use. The errors should not deter the motivation
to proceed into this domain as the error rate is not much high and also the errors can be
improved over the period. Many companies including Google thus, use the results obtained
from people analytics for performance enhancement and not evaluation. These data driven
models that predict various insights about employees of an organisation, if used carefully, can
lead to tremendous improvement in the human resource effectiveness and efficiency for the
organisation.

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