26 January 2021

People Analytics Technology Q&A Call

Stacia Garr
Co-founder & Principal Analyst

Priyanka Mehrotra
Research Lead

TL;DR

  • In this Q&A call Stacia Garr and Priyanka Mehrotra present their latest findings on the People Analytics Technology
  • They address the growth they’ve seen in the market
  • How there is a more thoughtful approach to differentiating capabilities
  • How vendors are responding to customer needs by addressing ease of use
  • And explain why people analytics practitioners are key users

Q&A Call Video

TRANSCRIPT

Introduction

Stacia Garr (00:00):

Okay. So once again thanks everybody for joining us today. We are going to be talking about people analytics technology here in our first, really our first kind of people analytics focus session of 2021. This is based on research that Priyanka and I did across really the last two years, but more specifically, the study that we published at the beginning of December on the people analytics tech market has, they said this is designed to be highly interactive and a discussion. We do record just so you know, and we put the recording up on our site for our red thread members so that they can view this in the future. So if there's anything that you really, really don't want anybody else to hear maybe hold that back, but otherwise we hope that it is an open and engaging discussion.

Stacia Garr (01:09):

So for those of you who don't know who we are I think most of you do because you're here and you found this, but we're red thread research where a human capital research membership we're focused on a number of practices most relevant obviously for today is people analytics and HR tech, but we also cover DEIB, employee experience, performance learning and career. And and we offer our research through a membership and then we also do advisory services and events and all sorts of good stuff. So that is us. All right. So as I said, this study is based on what we did across the last year, had incredible support and participation from our vendor community, and some of who are on the phone today. And we we published this, as I said in December, 2020. It's kind of funny. I keep on tripping over 2020, 2021, but that was it.

Stacia Garr (02:03):

And so here's the high-level findings of what we found in the people analytics tech market study. First is that we saw some pretty incredible growth in the market. And I will give you all some specific numbers around that second, we saw a much more thoughtful approach to differentiating capabilities in this year's study. So in 20, in the 2019 study, we spent quite a bit of time kind of talking to folks about, Hey, y'all are saying the same thing. Could you maybe be a little bit crisper on what it is that you're offering to your customers? And we were so thankful that we actually saw that happen with with vendors last year and being much more specific about this is what we do, this, how we do it. This is who we work with which, which I think was really refreshing.

Stacia Garr (02:49):

A third thing was kind of vendors responding to customer needs. And we'll talk a little bit more about specifically what that meant, but in general, it meant responding to the pandemic. As well, as the social justice movements of 2019. For us we saw ease of use and user-friendliness remaining high on customer's list of needs. And that was important because we feel like back to this differentiating capabilities topic, a lot of vendors say, Oh, we are easy to use. We are user-friendly. But when we talk to customers broadly and we did a poll of, I think, what was it Priyanka, 150 some-odd customers participate in the poll. And so they said, Hey, look, this is actually still a differentiating feature. So even though everyone is saying that they do it, that isn't necessarily the case. And then finally people analytics practitioners are the key users.

Stacia Garr (03:42):

I actually pulled this slide out because I didn't want to spend too much time talking about it today. But the headline here is, is that in the 2019 study the vendors broadly said that people analytics, practitioners were their key users, about 76% of them said that. And then here, when we moved to 2020 and kind of given everything that happened, that number actually jumped about 20 percentage points up to 96%. So almost every vendor is now saying in our study, it's now saying that people analytics practitioners are there key user. So that's a pretty big shift in terms of what we were hearing. I'll stop there. Cause as I said, this is interactive. Any general questions about this before I share a little bit of additional details or anything that you want to spend a little bit more time talking about?

Speaker 1 (04:33):

I had a question about you, you mentioned there's a approach to differentiating capabilities. Perhaps you're going to delve into that a little bit more, but curious what approaches you've seen. So far.

Stacia Garr (04:47):

Yeah, we, we have a site on that. So we'll talk about that one a little bit more we'll make, and then please, you know, if we don't get to what you're looking for, go ahead and ask some more questions once we get to that slide.

Stacia Garr (05:01):

It looks like you might've just come off of mute.

Speaker 2 (05:04):

Yeah. I was just going to confirm the, the year. So you mentioned going 2019 and then 2020 is this something that was conducted in 2020?

Stacia Garr (05:14):

Yes. 2020. Yeah. So we published a study in 2019 which was kind of the foundational study. It was two actually studies, a very big, very long. And then the 2020 study we did, we tried to kind of condense and focus more on the highlights, but yeah, the, what we're sharing today is based on 2020.

Stacia Garr (05:34):

Anyone else?

To what extent did your org continue existing / make new investments in people analytics tech in 2020?​

Stacia Garr (05:44):

Well then for those of you who are practitioners online, we would just love to kind of understand what perspective you're coming from around the amount of existing or new investment you made with people analytics in 2020. So we just have to kind of hear, did you make any new investments? Did you continue investments? Did you expand them? What was kind of your approach?

Stacia Garr (06:18):

Or if you're a vendor maybe share kind of what you sell broadly with, with your, with your customers?

Speaker 2 (06:25):

From a company perspective, I would say in 2020, my company at that time I was doing data analytics, people analytics for HR, and we did make a good amount of investment in expanding our capability. We didn't change what we're using, but we sort of brought in capacity and, and, and the scope of use.

Stacia Garr (06:55):

And when you say you broaden your capacity, kind of what, what roughly did you go from and what did you go to?

Speaker 2 (07:02):

So we moved, we moved a lot of the backend storage and workings into the cube make for easier access because of a lot of data and a lot of use. We were moving a lot of data on projects onto the database. So we had to make changes at the backend so that performance is not compromised.

Stacia Garr (07:31):

Okay. Makes sense. Thank you. Anyone else want to share what they did in 2020 or what they saw their customers do?

Speaker 3 (07:42):

Thank you for, I mean, for explanation on behalf of the demeanor, let's say in Turkey, so I'm in the last year was a tremendous for companies to session for great tools. So the difference between the main region and the North America is we having access to great tools. So they actually, they wanted to invest, but, you know, there is a blur line between half to find out how to get access to this. So roughly there are great potential. And I mean, my company and I'm a researcher, but a lot of companies reached to me and asking how we can get access to this source. So there's a huge increase, I mean, the willingness, but you should create a good connection with other regions like me.

Stacia Garr (08:41):

Okay. So just to recap what I think I heard, it sounds like there's a lot of interest and enthusiasm around this, but not necessarily a lot of investment quite yet. And from what you saw is that fair to say?

Speaker 3 (08:55):

For sure, because, you know Yeah. Are like behind of the technology, you know, so we did pride a funny some technology here, but the difference is I in the local market, you should know how the culture of to get access to this market, but there's a great potential insight.

Stacia Garr (09:14):

Okay, great. Thank you. Anyone else want to share?

Speaker 4 (09:20):

So we work to support customers with transitions and we saw quite a lot of change just due to events. So we saw HR suddenly become very operational again. So some of the longer term projects have been parked and everyone was operationally running around, certainly in the UK seeking data to try and get through things like furlough, to understand that you said there was more of a request for staff, but it wasn't a tool was strategic. It was very reactionary, which I understand. And we saw many of the longer term aspects of HR teams put on furlough in lots of businesses as well. So it's almost like a bit of a pause in some of the strategic projects, but other companies maybe I think we'll come out of this realizing they couldn't very…they couldn't lay their hands on the data to even do the reaction we stuff very well.

Speaker 4 (10:15):

So, but it still feels I can. The UK, every time someone starts to put their head above the parapet to try and get to something more longer term, suddenly we're locked down again and HR running around like headless chickens, trying to deal with things internally. So we, we, we've just seen number of our longer-term projects. And again, you know, regardless of whether they're very analytical based keep getting kicked back as operational reaction becomes sort of the main thing at the moment. We're hoping things settle down and people actually learn some of the lessons of what they really need in place. So that's what we've seen through 2020 and the first month of 2021 so far.

Stacia Garr (10:58):

Yeah. And I imagine that the current severe lockdown has made it even even more signified.

Speaker 4 (11:05):

Yeah. I think everyone came out, you know, if you don't know what happened in the UK, we literally went back to work for one day and then got locked down so I can keep on going in expecting to sort of hit January and maybe things be a bit better or some people were, and then we were locked down and lots of people are homeschooling and stuff here as well, which is just sort of means that people are barely keeping the wheels on the car at the moment, rather than doing anything else. So, so we've just found that a number of times through the last year, but I think there is a non-independent that people realize, you know, more of the strategic importance, they just can't get there yet.

Stacia Garr (11:44):

Yep. Okay. That's helpful. Thank you. Anyone else want to share?

Priyanka Mehrotra (11:50):

I would just jump into HSA and say that from windows also aligns with what was just said to a point, because if you remember, when we started talking to vendors early on in the year, last year, they, a lot of them told us that their longer term contracts were starting to get put on hold as the people are going into lockdown and considering their budgets. And then later on in the hell, are we heard from some vendors, specifically employee engagement, experience vendors, starting to say that they're starting to see some contracts come back and get renewed. But I think that was specifically for those particular vendors because companies wanted to do those particular things really to employee engagement, keep a pulse on pulse, check on how employees are doing. So I think those, those investments probably saw a rebound versus compared to what Speaker 4 was saying, the longer term strategic investments, I think.

Stacia Garr (12:39):

Yeah. Yeah. And I think, you know, maybe we might need to check in with our engagement vendors now to see what's happening too, because so much of the world has gone back into a hard lockdown. And so it'd be interesting to see if it's mirroring what we saw immediately, you know, last March, April may, or if it's a different situation. Yeah. Great point.

Growth: even in times of crisis

Stacia Garr (12:51):

Okay. I'm going to go ahead and move you, move us along and show you all a little bit of some of the data from this study. So just kind of the high level and building off what Priyanka said, we did still see quite a bit of growth last year even in times of crisis. And so this is this is our market sizing efforts based on the revenue numbers that vendors share with us during the study.

Stacia Garr (13:26):

And you can see here that we, we still saw a pretty impressive 35% growth rate from, from roughly 2019 to 2020. Should be clear here, you guys, I'm sure. Facet math and saying, Hey, wait, that doesn't look like 35%. The differences is the 35% is actually calculated on the revenue that we revenue numbers we actually have. Whereas this is an estimate kind of taking into account all the parts of the market on the left hand side of the slide that all the parts of the market that we know exist, but we may not have had revenue numbers for. But anyway, nonetheless, no matter how you cut it, it's still quite impressive, quite significant growth in the market across the last year and continuing you know, the overall strong growth that we've seen in the market.

Stacia Garr (14:15):

We've got 55% CAGR (Compund Annual Growth Rate) for the last four years. So and, and, you know, just to kind of pause, I think, you know, a lot of this has been driven as Priyanka said by, you know, some of the engagement vendors also by some of what we call the multi-source analysis vendors. So, so folks like Vizier cruncher, I know we've got some busier folks on the line today who have, have been in those more in those larger, more strategic organizations and who, where the situation in, in the expectation of data being available, you know, maybe resulted an expansion of the capabilities and the offerings within those organizations. So, so still saw kind of a healthy growth from that sector as well.

Speaker 3 (15:07):

Can you explain, CAGR?

Stacia Garr (15:08):

Oh, I'm sorry. Compound annual growth rate. So instead of just kind of doing growth rate for year to year, it's the compounded growth across the four-year period.

Stacia Garr (15:23):

Thank you. Any other questions?

A crowded market landscape

Stacia Garr (15:33):

Okay. so this is our market landscape two by two. And one thing that's important to note is that unlike some other analyst firms are two by two and our two by two, up into the right is not necessarily better. This is really just trying to help folks understand what the market landscape looks like. And a lot of the vendors who are in each of the different quadrants offer different capabilities and they kind of play together well. So if you think about the folks who are on the left upper side, so the accumulated analytics group, they would generally play pretty well with the folks over here in the upper, right. And they would be kind of part of the overall integrated tech stack. Same thing with the folks down here on the lower right and targeted analytics. Those tend to be engagement vendors and, you know, they would play well with some of the vendors up here in the upper, right, who are, again like there's multi-source analysis platforms.

Stacia Garr (16:29):

The way that this vendor, this two by two is organized is on the X axis. We talk about the type of, or frequency in the finale axis and do this is gonna be the frequency with which somebody might be using these tools. So you kind of go from a quarterly or monthly analysis over here on the left-hand side over all the way to on the right hand side, it might be a daily or even hourly type of analysis, or are folks accessing it critically accessing it more frequently. And then on the data integrator versus creator side in a creator on the bottom is they're actually, you know, primarily survey tools, but basically pulling in creating data directly. Whereas on the top we have integrator tools which are those that are pulling in data from other sources. And part of the reason that we do it this way is one to help folks understand what some of the relative complexity might be for implementation.

Stacia Garr (17:26):

So for instance, down here on the data creators side an engagement tool is a relatively easy rollout. Whereas on the data integrator tool, it could be more complex because you're pulling in data from more sources and having to deal with, with everything involved in that obviously, you know, these different tools here at the top are very heavily focused on making that simpler. And that's a real often a real strength of theirs. But, but it's still, there is a higher level of complexity in general. In the middle we have vendors who are doing both. And so this is kind of one of the big shifts that we saw this year, which is the number of vendors who are kind of in this middle section. So really kind of, let's say from jigs, so on down here to the two, just above the x-axis that, that space is really compressed.

Stacia Garr (18:16):

Meaning a lot more vendors are in that space now. And then we had a lot of vendors who kind of showed up and are now there that we didn't have in, in 2019. And the reason for that is, you know, we've been talking as others about the importance of bringing in more data sources in order to get a more holistic understanding of what's happening. And so we're starting to see vendors who are both, you know, surveying employees for instance, but then also integrating data from different sources. Priyanka, did I miss anything on that?

Priyanka Mehrotra (18:46):

I think the only other point to add is that we saw a lot more vendors shift towards the right this year. So a lot more of we saw vendors improve their capability to providing data more frequently and also seeing users access that data more frequently. So we had a few, one vendors that shifted towards the right, and we had some engagement and experienced vendors who also shifted more towards the right. So that's, that's another difference that we saw from last year.

Stacia Garr (19:15):

Yeah. What questions do you guys have on this? Do you all have, if any?

Priyanka Mehrotra (19:26):

Oh, it looks like we have a question in the chat. How should, how should one understand when a window like Visier and work, they show up more than once in this chart.

Stacia Garr (19:38):

Yeah. So the let's take Visier as an example. So Vizier has an analytics platform or an analytics offering, excuse me, in addition to a workforce planning offering. And so with this group of vendors over here in the accumulated analytics are the ones who are kind of most likely to show up twice. And that's because they have a distinct workforce planning offering. That's separate from the others. Workday is a different case in that Workday has kind of three different analytics products. So they have a their, their Prism product, which is appear in the upper, right. They have their overall people analytics product, which is is kind of available. It does. So with Prism, you can pull in data from external sources with, with people analytics, you cannot and then they have their HCM analytics product, which basically provides a analytics on top of just their HCM data. So each of these kind of represents a different product offering for those different vendors.

Differentiating capabilities according to vendors​

Stacia Garr (20:52):

Okay. well we'll go ahead and keep moving then. So there was a question earlier about the differentiating capabilities according to the vendors and wanted it to kind of highlight what we saw as the differences. So in 2019, we saw that folks were saying things like ease of use customizable short time to implement scalable and flexible is their primary differentiators. And as I said, we were clear in our in our 2019 report that, you know, if everyone's saying the same things, they're not really differentiators. And so folks were quite a bit better in clarifying what their different capabilities were here. In 2020, we heard quite a bit more about domain expertise. So saying, you know, we bring this specific set of capabilities from a knowledge perspective or an industry or a sector or a geography perspective to bear on this particular problem aligned to that, the methodology and science.

Stacia Garr (21:48):

So we saw a lot more people kind of talking about if they had it, the underlying scientific basis on which their analysis was based. And that I think was really I helpful thing for, for vendors or for customers because it helps them understand, Hey, this, this is where this is coming from. This is why it's sound. This is, I think also important when we're thinking about things like AI or machine learning and helping people understand, you know, a little bit more of what's underneath the hood, as it were. Actionability was something that we heard a lot of vendors increasingly focus on. How do we actually go from the, the information to insight and that insight to action. And that I think is something that vendor sync that some vendors are differentiating here. There's a huge amount of opportunities still within that particular item. And then finally we did here still scalable and flexible and, and for some vendors that, that really is still true. Some of them are more scalable and flexible than others. And we didn't hear that. You can see it's kind of number four there. We didn't hear it quite as broadly as we did in 2019, which I think is, is good because it's a little bit more accurate, I think in terms of what's actually out there. Priyanka, did I miss anything there?

Stacia Garr (23:14):

Okay. Any questions on this? I know we had a question earlier,

Speaker 3 (23:20):

Actually. It's not a question. I mean, I just want to add, I mean, some mentions, let's say maybe we have more microservices. I mean, next year, because the people are just some go goes growing increasingly. And we have a lot of maybe microservices in this field because, you know, even we can give wide employee experience in many collaborative tools. So I think for this year we had immediate expertise.

Stacia Garr (23:54):

Yeah, no, I think that's a good point.

Speaker 1 (23:59):

I asked the question before, so thank you for sharing this. I think it makes sense as this market matures you it gets a little bit more specialized, I would say. So domain expertise and the methodology and science and some of the social science research that is so fundamental to HR and people analytics should make more of a hopefully, you know, the make a presence in, in the applications or the dashboards.

Stacia Garr (24:36):

Yeah. Yeah. I was, I was having a really interesting conversation with a people analytics practitioners this morning, actually about this, but this, this need for getting more of our you know, IO psychology and kind of general psychology, quite frankly insights into, into some of these tools and, and how important that is. It is broadly, but also particularly around the skills conversation that we're hearing come up a lot more with people, analytics technologies because, you know, with all of this, we're, we're looking at people. And so that, that strong basis in that science is an important aspect.

Speaker 1 (25:13):

Yeah. That's very true. I think because when it comes to actionability, that's one of the issues you really cannot be very prescriptive when it comes to people it's much more nuanced than let's say a sales application or a finance application.

Stacia Garr (25:35):

Yeah. I agree. And I disagree in that. I think that there is an opportunity for many solutions to one, Change level of expectation of kind of the type of the way people will interact with the system. So, so right now, in general, there is an underlying assumption that the user of these people analytics technologies will have the time energy inclination, whatever to go and kind of do some of the digging to find the most interesting insights. But the thing is, is particularly as we start to expand our base beyond our people, analytics practitioners, and maybe some are savvy HR leaders and obviously the data savvy HR leaders is a small percentage of those folks. I think that there's more of a need to kind of bubble up what some of the, what may be happening?

Stacia Garr (26:36):

So for instance, just to choose an example, if we know if we have a high, we may have a hypothesis, you know, black women are less…are staying at the organization for a shorter period of time than other, another population. Right now in a lot of these systems, you have to have that hypothesis and go digging for it. You have to cut by it. And in, even in the ones where that isn't the case where they might show that they don't necessarily show you what you could do. So, you know, maybe we need to look at compensation. We need to look at levels of engagement, their sense of inclusion, et cetera, et cetera, that group sense of inclusion. I think that there's an opportunity for the technology to make suggestions about this might be what's causing it, or this might be what you could do, not necessarily because it's right, because it may not be right, but what we all know that it's easier to react to something than it is to necessarily come up with the idea a whole hog new on our own. And so I think there's an opportunity to kind of show what could be happening, what could be done in the instant, in the hope that it will drive more action,

Speaker 1 (27:47):

One hundred percent agree. I think you know, full disclosure, we, we take all of our users up to that point, meaning showcasing what the the causes are, so that when the decision-makers are able to see what are the possible levers or the drivers that I need to focus on, I think that's the fundamental role of an analytics application, right. You really need to get there. And as you said, there, depending on the cause whether it is a promotion rate or compensation or something else it's up to them, the HR business partner or the business leader to take the required action.

Stacia Garr (28:27):

Yeah. Great. Any other comments or thoughts?

Vendors responded to customer needs

Stacia Garr (28:40):

All right, let's keep going then. Okay. So the other, the other kind of high level findings that we'd shared with vendors for needing to respond to customers, and they did it in, in five ways. First was it focusing on employee engagement experience kind of already touched on that point? Diversity, equity, inclusion, and belonging. So we saw particularly after the social justice movements of last summer an uptick in the focus on DEIB. That though I think is and, and we actually just published, what was it Tuesday Priyanka this week has been so long Tuesday our DEIB tech study. And, and we talk about this in that study as well, because it kind of goes both ways, but we saw an increased focus on that on people analytics. But we think there's actually quite a bit more room to focus on this topic within people analytics, and we're planning to study that here in Q1.

Stacia Garr (29:39):

But, but that was the second, second high theme. Third is getting the basics, right. So I, I pulled the specific slide out on this point, but really what we saw was a focus from our customers saying that their vendors were kind of focusing on some of the core elements, things like surveys, filtering, et cetera, that would enable them to use this solutions effectively. But some of the more sophisticated things like what we were just talking about we saw less effectiveness from, from vendors the fourth one being integrating and analyzing data from multiple sources. So, you know, just to kind of level set HRIS is, is the thing that everybody integrates with. I think it's 90% of vendors integrate agent with HRIS data. But then it kind of really starts to drop off in terms of some of the other talent solutions that are out there.

Stacia Garr (30:30):

And also some of the other technology, so sales or finance or other work cloud technology. So it's still something that focus folks are focused on, but it's just not as high as HRIS, but we did see kind of a greater focus on this in the last year. And then as I already highlighted people, analytics practitioners saw a much bigger focus on that audience. And less of a focus on some of the other audiences though, that said, we did see that when vendors were talking about what they were going to do moving forward. Most of them said that they were primarily going to focus on business leaders and C-suite leaders and that they going to focus on managers much more in the future.

Stacia Garr (31:14):

Priyanka did I miss, anything there?

Priyanka Mehrotra (31:16):

Nope.

What should users keep in mind before buying new people analytics tech?

Stacia Garr (31:19):

All right. So now we're gonna jump into the questions that we received from folks in advance of this call. And this was the first one, which was what should folks be keeping in mind before buying new people, analytics tech? And this was like a perfectly planted question because we wrote about this in this study. And so what we found in this study was this folk need to focus on first identifying your needs. If you're, if you're a buyer, you know, what is it, what's the problem that you're actually trying to solve? And these are the five challenges that we've heard from vendors that they were trying to solve for their customers. And so we would advise, you know, figure out what really is the underlying challenge that you're looking for and can this vendor actually meet those challenges?

Stacia Garr (32:07):

You know, we see some vendors who are really great at, for instance, in play engagement experience, but they may be kind of more of a tech platform first and may not be focused as much on enabling action. Kind of underneath that too, is that we saw about a 60, 40 breakdown between the percentage of vendors who say that they have consulting included with their platform or some level of consulting to help get you off the ground and to give you support throughout the year. So that was about 60% of vendors and then 40% said they, any consulting is kind of add-on beyond, beyond what they're doing. So it was just important to know what your, what your needs are and whether the vendor can realistically meet your highest priority needs. Second looking beyond the basics. So I'm going to just build this real quick.

Stacia Garr (32:57):

So these are some of the, the kind of additional capabilities that we saw that vendors can offer in some of the new areas that they're, that they're looking into. So for instance, machine learning for, for deep learning about 40% of vendors are doing that about a third. Are you looking at digital exhaust? About 26% are looking at advanced NLP, and that is important to distinguish a lot of vendors say that they offer NLP, but advanced NLP allows you to take into account things like your, your organization's culture and maybe specific language that you use within your, within your organization. It can allow you to group together prescriptive comments. So not just this is what's happening, but this is what we should do. And to understand that. So there's kind of a lot more nuanced underneath NLP than a lot of vendors will say, they'll say, Oh yeah, we've got an NLP.

Stacia Garr (33:53):

We can, you know, group your comments. You're fine. But there's quite a bit more that can be done than that. And then finally we're starting to see the use of voice channels as a, as a thing that folks are experimenting with. And so using that, for instance, to allow folks to either submit video or to do recordings of things that they'd like changed or better, et cetera. And then potentially as we start to see more more information about or the more ability to kind of bring in digital conversations, maybe meetings, et cetera that might be another way that folks are potentially using this in the future. Any other questions or any questions on this?

Stacia Garr (34:51):

Okay.

Stacia Garr (34:56):

And then it's kind of gets at that understanding vendor support and services I had highlighted a moment ago. So, so you can kind of see here that the data that I, that I mentioned about, you know, I actually think I flipped it, but so 60% of vendors say that they do not provide any sort of consulting services as part of their annual subscription and about 40% roughly so that they do. So understanding that level of, of support, and then also the frequency of customer check-ins by the vendor. So how, how engaged is the vendor and asking you what you need about 60% of vendors are doing that monthly. But you can see that, you know, 17% are quarterly and 15% are only at twice a year in terms of checking in and providing support. So you can understand what it is that you need.

Stacia Garr (35:40):

And then the final thing we mentioned is in terms of folks who are thinking about buying, they need to think about is, is clarifying the ethics expectations. There's a wide range of levels of support that vendors expect to have to provide when it comes to ethics. And you can see here that, and also, I should say it also varies by the type of category for, so for instance, multi-source analysis platforms as a group, as a category, scored the lowest on the amount of, kind of support that they give around ethics compared to, let's say, in play engagement platforms, which are amongst the highest. So you need to understand kind of what your organization's stance is on data ethics, and to make sure that it's either aligned with what your vendor is offering or that you're able to kind of guide your vendor in a way that is aligned to what your organization prioritizes.

Stacia Garr (36:31):

Okay. So I'm going to stop there. That was all in the considerations of what to think about before buying new people, analytics, tech, does anybody have any questions or thoughts or things that you're thinking about when it comes to buying tech that maybe we didn't cover?

Which people analytics tech vendors are focusing on addressing the needs of business and people leaders?

Stacia Garr (36:58):

Well, we'll move on to the next question. Okay. So which people, analytics, tech vendors are focused on addressing the needs of business and people leaders. So this is, I'm Just going to share this data here as a starting point. So vendors are generally planning to invest in non HR users. So what we have on the left-hand side is the current end users. And you can see kind of the, the groups, so business and C-suite people, managers and employees, and in red, we have 2020 data and in purple 2019 data. So you can see, for instance, right now about 55% of our vendors said that they're highly focused on business and C-suite leaders.

Stacia Garr (37:45):

And then on the right hand side, you can see what they said, where they plan to in the, the groups that they think will use their solution more frequently in three years. So you can see, again, 80% of solutions expect business and C-suite leaders to use their solution more in three years than today. So that means that they're planning to build for those folks. So you can see again, you know, business and C-suite leaders and then people managers, and then finally employees are the areas that are expected to see growth in. And we had a whole bunch of other populations on here, including people HR practitioners, HR, business partners, HR leaders, et cetera. Those either held steady, or actually they, they said they didn't expect to see more growth or more use of those the solution by those groups in the future.

Stacia Garr (38:32):

So these are the three that we saw the growth. So in general rule of thumb is, is people, vendors are planning to go after particularly business and C-suite leaders and people managers more in the future. In terms of the specific, you know, vendors, I think we've got, you know, whatever it is, 50 some odd vendors in this study, I hesitate to call out individual vendors and kind of a list. But I think, you know, if folks have a specific question around specific category, happy to answer that one offline. But I think the general expectation should be that, you know, roughly half of them today are focused on business and C-suite leaders and people managers, and that in the future, it's going to be quite a bit more.

How are people analytics tech vendors helping customers with their DEIB challenges?

Stacia Garr (39:22):

Next question we got was how are people, analytics, tech vendors, helping customers with their DEI B challenges? And so for this one, I don't think we put together some data. But I can tell you there, there are a few ways and Priyanka, please jump in here because I'm sure I will…because we just published this study this week. I might, might not have my talk track straight here. But so, so there are a number of ways, you know, one of them is just through, through kind of your, your pure analytics of, of what's happening for these different groups. So this might be looking at retention rates. It might be looking at promotion rates, representation, et cetera, with, with different populations within the group within the organization, excuse me. We are attending to in really until last summer the big focus was on gender for a lot of organizations we've since then seen a big shift to, to race as you would expect.

Stacia Garr (40:21):

But I think we're going to start to see some other demographics come in as well. And so sorry. I see you need to jump off, the recording and slides are only available to RedThread members. So the live event is what's available to anybody, but the recording and slides are available to red thread members. Thanks for the question. In terms of kind of some other ways that we're seeing people, analytics, tech vendors help, you know, one big area has been around organizational network analysis. And so that has been looking at the networks of different populations and understanding where we might be seeing some populations who are maybe not as well connected or included within the organization as others. That's one way that we're seeing it. Certainly other ways we're seeing it are looking at things like within talent acquisition, kind of what what might be happening to different candidates in terms of them dropping out of the pipeline or what actually interestingly might be happening with interviewers.

Stacia Garr (41:22):

So do certain interviewers tend to have a bias towards selecting one type of person or another? So I think they're, they're just a number of different use cases. I mean, in the, in the people that are in the DEIB tech study that we just published, we basically have vendors across all four areas of the talent life cycle. So talent, acquisition engagement, and retention, advancement development, and then people analytics, but fundamentally all those solutions are in, most of them, not all, most of them are or some sort of analytics solution Priyanka, what did I miss? Because I'm sure I missed a bunch.

Priyanka Mehrotra (41:57):

I would just add a thing that we saw the same, a lot more vendors. Talk about inclusion and belonging. So for example, and we mentioned this an our DEIB report, like 40, for example has in its solution tries to capture belonging through its survey for candidate experience as an employee experiences and has that built in, into its culture and hiring tool that they offer to their customers. You know, similarly Workday had released their Vibe, which is their inclusion and belonging index. And some of the employee engagement experience when results are starting to talk about inclusion quite a bit more. So PeakOn for example, that's another example that we had shared in our DEIB study that is working with customers to really understand the different experiences of the underrepresented groups inside the workforce. I think the other thing that we talk about is looking at retention rates and I know leadership among different groups, for example, Visier allows cohort analysis of different groups to see how different groups are progressing through the development and looking at their career progression and where they're falling off in the leadership cycle.

Stacia Garr (43:12):

So I think those, those were some of the examples that really stood out this time in our study.

Stacia Garr (43:19):

What are you all seeing? Are you seeing the technology being applied in different ways or different use cases where you would hope to use?

Speaker 5 (43:31):

Yeah. That that's interesting from the perspective of the survey, because I was thinking about it that I know there was a lot of requests from, from the company I was doing last year. I know that was a big focus for us, was being able to look at the data and, and performance, just like what you just explained, being able to look at that, but I didn't feel like we got that. We're able to get that. That was a request we made to our vendors. I didn't feel like we were able to get that. So are you saying that you saw a lot of requests or are you saying that a lot of the analytics companies have this capability already?

Stacia Garr (44:13):

A number of them, I'm not sure I would go with a lot of them. So a number of them have that capability, for instance, Priyanka just mentioned Visier. Visier has that capability. Workday launched in November I want to say maybe that timing might not be quite right, but their Vibe index which allows for it. She mentioned PeakOn, which is an engagement provider. They allow for a pretty robust DEIB analysis. So a number of them do that, that said kind of, if we think about what we saw in our DEIB tech report that we just published one of the big shifts was that we saw a lot more of what we call DEIB feature vendors. And so those are vendors who do other things, but have recently added DEIB features to their offering and that number Priyanka.

Stacia Garr (45:06):

Do you remember the exact percentage increase we saw, but it's big. My recollection and maybe Priyanka, you can look it up while I'm talking about. My recollection is it was an increase of 136% is what's the number that sticks in my head. So we're seeing a lot of existing vendors add on DEIB features. And what I expect to still see that here in 2021, because the DEIB energy is still very much so there. And I think that given a lot of the commitments that were made by companies in 2020, they're going to be asked, there's going to be some accountability. I think quite a bit more than there has been before in 2021 as to what they've done. And then analytics component of that is fundamental to being able to answer that question.

Speaker 5 (45:57):

Right. So I have one more question. So this research that you did was based on existing vendors, did you also notice a lot of new entry in terms of tech companies that are bringing new technologies for D&I?

Stacia Garr (46:13):

In general, we have. So we had been seeing a significant growth rate of new vendors into the space, both people, analytics and DEIB for, you know, years, but we have seen a bit of a slowdown and we think that was related to the, you know, the financial impact of COVID in 2020. That may shift here in 2021, now that we have a vaccine and kind of a perceived way forward, we also see broadly VC investment in this space is still really high and really growing. So my gut is that it will probably pick up here in 2021, but we did in general, see a slowing of the pace of new vendors in 2020.

Speaker 5 (47:03):

Okay. Thank you.

Stacia Garr (47:09):

Any other questions?

Stacia Garr (47:15):

One thing I realized I did not say, but should have said is compensation analytics is obviously a really big space here. I kind of think of it as like obvious, but it's not necessarily.

Stacia Garr (47:31):

For people who are newer to the space, but the compensation side of, of this has been particularly driven by, by places like the UK who are requiring gender compensation report outs and the like, and, and then that has a ripple effect because if you're gonna do it from large multinational companies, for many of them, if you're gonna do it in one place, you should probably do it in all places. And so we're seeing that broadly across people analytics. So I just should have, I should have mentioned that earlier.

How can people analytics practitioners discern which emerging tools and trends will gain long-term adoption?

Stacia Garr (48:00):

Okay. so this was kind of an interesting question. So how can people, analytics, practitioners discern which emerging tools and trends will gain long term adoption. Now, if I really truly knew the answer to that, I can just shut down red thread and call it good.

Stacia Garr (48:20):

Cause I spend my life as was Priyanka trying to think about this night. I don't necessarily know the answer, but here's how I would start to think about it. One, is it solving a real problem that organizations have? I think that it's really easy for us in people analytics. I include myself in this to say, Oh, we can do this really cool thing. And then to go searching for a problem, you know, a hammer in search of a nail. And sometimes that nail is not really the nail that needs to be hit for the business. And so I think, you know, where I would start is, is a really, truly a problem for the business. Not just something that people analytics or even HR is excited to solve. So that's, that's thing. Number one thing. Number two is, can we actually solve it? And so by this, I mean, is it a problem that we, that is not so complex that we can solve?

Stacia Garr (49:19):

So for instance, I had a great conversation with someone a few days ago where we were talking about skills and now I believe that there, that skills has the potential to be a really powerful thing. But this practitioner was saying, look, I think this is all just hype. Like this whole skills thing is overblown because people are much more than their current skills. There's their potential, there's their interests there's, you know, their lives, the rest of the things that are happening that can impact their performance and skills themselves are really hard and complex. And so if you are trying to solve the skills question, like the level of complexity is so great that I don't think you can get there. I don't know that I have an answer to that point, but the, but the point around the level of complexity and the fact that we're trying to measure things that are very human and influenced by other things that we can't necessarily measure, because we can't measure every single thing about a person.

Stacia Garr (50:15):

I think it does beg the question is, you know, in this example is skills a trend or will it be something that actually gets baked into our organizations and drive long term? So, like I said, first thing, is it solving a real problem? Second thing, is it a, is it a problem that we actually can solve? And then I think third, is do we have the reach to, even if we have the right answer to influence the people who can drive action. So for instance, you know, a lot of solutions are trying to get, as we saw more into the hands of C-suite leaders and and people, managers and employees, which is great, but if we develop a solution now or a feature now that requires those people to do something, but they are not, the reach of the solutions are not broad enough to actually get that information into those people's hands. It's going to end up being a trend that fails a fad that fails. Now it may be that in five years, it comes back and we've got the broader reach and we can get to those people. But if we can't get the right information to the right hand to the right people to make the right decisions, then I think it tends to fail. So that's, that's my thinking on it. Priyanka, do you have anything to add?

Priyanka Mehrotra (51:31):

I think I would just reiterate the first point that you made about the business challenges, I think and that also ties to what the employees need. You know, one of the things that we are hoping to see in, we expect to see for this year is people analytics really move into the development space. And I think that's really crucial from the employee side, as well as from the business side as well. And we know from, from 2020, one of the biggest challenges that businesses and employees face was shifting to this new paradigm of working and suddenly everybody did, needed to learn new things while working remotely. And people analytics really saw an opportunity to come into play over there. So I think marrying those two things really finding out what is it that employees need aligning that with the business needs. I think that's very real see the trends and long-term adoption of what people analytics can really do.

Conclusion

Stacia Garr (52:22):

Great. I see that some folks are having to jump. So I think that's probably a good place to, to end. There was one more question, but I think we'll just stand right there. The overview is available on the site for folks who are not members. The full study is available for folks who are members and also the tool, which gives information on all the vendors who are in this study. A kind of lightweight version is available on the site for everyone and a heavyweight version that has a lot more details on it is available again to RedThread members. So thanks so much for spending some of your time with us today. I know everyone is really busy and so we appreciate that you did. And if you have any follow-up questions, feel free to reach out to Priyanka or me. You can certainly get us at [email protected] That's probably the easiest way. All right. Thanks so much everybody. Thank you!

 

Written by

Avatar
Stacia Garr
Co-Founder & Principal Analyst

Stacia is a Co-founder and Principal Analyst for RedThread Research and focuses on employee engagement/experience, leadership, DE&I, people analytics, and HR technology. A frequent speaker and writer, her work has been featured in Fortune, Forbes, The New York Times, and The Wall Street Journal as well as in numerous HR trade publications. She has been listed as a Top 100 influencer in HR Technology and in D&I. Stacia has an MBA from the University of California, Berkeley, and a master’s degree from the London School of Economics.

Share This