Follow the Money: Tying People Analytics to Organizational ROI

Follow the Money: Tying People Analytics to Organizational ROI


Of the many exciting and captivating themes that emerged at the recent People Analytics Summit in Toronto, “follow the money” was one of the most intriguing. While the phrase sounds like an overused cliche used in crime dramas, it holds profound relevance in the world of people analytics. 

If you’ve tried to launch a major people analytics initiative, you know firsthand how tough it can be to get the C-suite to buy in. After all, most executive-level decision-makers are focused on the big picture. They are responsible for meeting or exceeding the company’s revenue goals while staying ahead of the competition. 

So how can you overcome a lack of buy-in and mobilize executive decision-makers to action? You’ve got to follow the money, of course. 

This means presenting your initiatives in a way that resonates with the C-suite’s primary concern: the bottom line. Below, you’ll learn about the importance of tying people analytics to practical use cases that positively impact revenue so you can drive meaningful, measurable change.

The Disconnect Between HR and Executive Priorities

Despite your best intentions, there is often a disconnect between your priorities as an HR representative and those of executives. While you might value talent retention, employee engagement, and diversity, they might focus on profitability, return on investment (ROI), and growth. 

It’s understandable that you and the C-suite would prioritize different areas of the business. After all, each of you fills very important (but unique) roles within the organization. 

While you and your HR department want to cultivate a positive work environment and retain top talent, executives focus on performing better and maximizing shareholder value. The priority gap can lead to expensive and potentially dangerous misalignment between human resources professionals and C-suite decision-makers. 

According to The 2023 State of People Strategy Report, 45% of HR leaders face “increased pressure to justify program spend.” This pressure is part of a larger trend of disillusionment between HR and executives. The same report also states that just 27% of HR workers believe C-suite leadership recognizes human resources’ impact on company revenue. 

If you want to bridge the gap in your own organization, you’ll need to align your people analytics initiatives with metrics that matter most to executives. By doing so, you can demonstrate your programs’ fiscal value. 

Understanding Organizational ROI Measures

Two of the big buzzwords in the C-suite are “return on investment” and “time to value.” Executive-level decision-makers want to know what an initiative’s ROI will be and how long it will take to realize those returns. 

One method for you to try is demonstrating that your proposal will yield strong returns in a reasonable time frame. If you can do that, you’ll be well on your way to achieving organization-wide buy-in. 

So which metrics should you focus on when putting together your proposal? While you need to tailor your messaging to align with the preferences of your organization’s leadership, a few data points are universally important to executives. These include:

Revenue Growth

Measures the increase in the company’s
sales or revenue over a specific period

Cost Savings

Refers to the reduction in expenses achieved through various efficiency measures, such as decreasing employee attrition

Profitability Margins

Measures the company’s ability to generate profit relative to its revenue

ROI for Specific Initiatives

Measures the gain or loss generated by a specific program relative to the amount of money invested

By focusing on the ROI and cost savings of a specific proposal, you can encourage decision-makers to gradually embrace people analytics. On that note, keep in mind that business leadership probably won’t fund your entire initiative all at once. 

You’ll need to start by building momentum. Once you pile up a few wins, you’ll have a better chance of obtaining the support necessary to roll out the program at scale.

Connecting People Analytics to Business Outcomes

Now, it’s time to tie people analytics to organizational ROI. This is your chance to win the hearts and minds of executive leaders by connecting your proposals to specific business outcomes. 

For instance, revamping your employee engagement initiative using people analytics data can lead to reduced attrition rates, resulting in substantial cost savings for the organization. Similarly, a diversity program in the sales department could help boost performance and long-term revenue growth. 

These are just a few potential use cases. You’ll need to consider where people analytics can make the biggest and fastest impact in your organization so that you can tailor your messaging accordingly.

Quantifying the Impact

Your presentation on the value of people analytics cannot simply be a list of generalizations or potential benefits. You need to give the C-suite hard numbers based on realistic ROI projections. Putting a dollar value on the impact of your proposals lets you translate the language of HR to terminology that executives appreciate and value.

However, it’s important to be realistic in your projections. There are many variables at play that could impact the ROI of your initiative, including employee buy-in. If you are too lofty with your forecasts and then underperform, it could crush your momentum and make it difficult to gain support for future programs. 

It’s better to be slightly conservative in your calculations so you can exceed your projections. This way, the C-suite will see that people analytics has an even greater potential than initially believed. They may even be more eager to fund your future proposals. 

Building a Compelling Business Case

After you’ve gathered the right data and identified key areas that can be improved with people analytics, it’s time to craft a compelling business case. A strong proposal will articulate the following:

  • WHAT: Describe the proposed program
  • SO WHAT: Explain the anticipated business impact
  • WHY: Outline the rationale behind the initiative’s potential to drive ROI

If your proposal hits these three pillars, you’ve got a strong chance of gaining the necessary support for your initiative. However, it’s vital that your presentation be rock solid, and ideally, backed by data that you feel confident in. 

Be prepared for pushback and have answers for potential concerns. If the C-suite sees that you’ve thought through all of the variables and considered what could potentially go wrong, they will be much more confident in your plan.

Elevating HR’s Strategic Role

Following the money is about more than simply showcasing the value of people analytics. On a grander scale, tying this exciting concept to organizational ROI can position the human resources department beyond an operational support function.

Once you’ve demonstrated a direct link between concepts like talent retention or workforce diversity and business revenue, HR will gain a seat at the executive table. More importantly, you’ll be able to provide strategic insights that result in a more talented, diverse, and capable workforce. 

Transitioning from being a support entity to a strategic asset represents the next evolution for human resources departments everywhere. People analytics is making this transformation possible.

Tap Into the Financial Value of People Analytics With HireRoad

The mantra “follow the money” has never been more relevant to HR professionals seeking to implement impactful people analytics programs. By aligning your initiatives with the core ROI metrics that matter most to C-suite decision-makers, you can garner newfound support and mobilize organizational leadership to action. 

Getting the C-suite on board will set the stage for meaningful investments into people analytics technologies and workflows. Once you’ve embraced the language of business and demonstrated the tangible impact on the company’s bottom line, you’ll be able to drive meaningful change from the top down. 

HireRoad can help you take the next steps in your people analytics journey with our user-friendly and easy-to-implement solution: PeopleInsight. This best-in-class solution can yield actionable insights in just five days, streamlining the path to meaningful ROI and condensing the time to value.

Schedule a demo of PeopleInsight to learn more.