AI and the Future of People Analytics

by Pranav Ramesh
June 02, 2021
AI and the Future of People Analytics - PTP

Did you know that Google almost got rid of their managers?

Back in 2002, Google founders Sergey Brin and Larry Page decided to experiment with the idea of getting rid of their managerial class. Popular opinion at the time was that managers were an annoyance at best and an active drain on employee productivity at worst. As engineers, they shared the view of many of their peers that managers were little more than mindless bureaucrats. They decided to make Google a flat organization and, in the process, prove that managers were unnecessary.

The experiment was a resounding failure

Employees were unable to stay on track of their projects, projects were left undelivered, and engineers had no one to turn to for help with day-to-day queries. They quickly lost sight of larger organizational goals and there were no recourses for conflict management. Turns out people need active and intelligent oversight. Brin and Page abandoned the experiment within a few months and Google returned to a more traditional management style.

Looking back on this experiment today raises some interesting questions. Experts in data analysis and predictive modeling will tell you that many of the tasks which required managers back in 2002, could be handled by an Artificial Intelligence system today. Scheduling, project management, workflow approvals, payroll, and many other tasks traditionally performed by managers can now be fully automated. Aspects of Human Resource management have also been automated. AI systems are increasingly capable of using data analytics to predict employee behavior. Thus, we find ourselves revisiting confronting an update of the question that Brin and Page raised—Can an AI make management or HR decisions? And to what extent can they replace human oversight?

 

What is People Analytics?

To understand better the role of AI in human resource management, we need to understand people analytics. People analytics is an emerging trend in human resources management. It focuses on developing an in-depth understanding of the processes, functions, challenges, and opportunities in an organizational structure. Though people analytics has been around since the beginning of the 19th century, people analytics today is largely AI-powered.

Large amounts of data and statistical leads, generated by employees, are analyzed by AI and other HR technology, and the results are used by organizations to drive HR-related decision making. With the rise of AI in business, people analytics has become a crucial part of business strategy.

According to Deloitte’s 2019 Global Human Capital Trends, 74% of organizations believe that HR technology is crucial for effective functioning. Companies such as Nestle, for example, have found that people analytics can play an important role in furthering their organizational objectives in new ways.

 

Nestle uses AI-driven People Analytics to address the gender diversity

When Jordan Pettman joined Nestle as the Global Head of People Analytics, he decided to change the way HR data was used by the organization. He wanted to use the HR data for engaging with the business, quantify the problems, and introduce data-driven insights into the decision-making process. Most interestingly, he decided to use this data to increase gender diversity at Nestle.

Using descriptive and predictive analysis tools, Nestle began to investigate gender diversity at the workplace and found, for example, that women only hold 43% of managerial positions at the organization. They also found that only 20% of senior management was female. Using these findings Nestle was able to create the Gender Balance Acceleration Plan, which aims to increase the number of women in leadership positions to 200 by 2022 and increase their presence in senior management to 30%.

 

The Role of Human Resources in a Data-Driven World