Imagine you own a small coffee shop in a bustling area. Each morning, you observe patterns in how your employees interact with customers. One barista thrives during the morning rush, handling high-pressure situations with ease, while another brings a sense of calm during quieter post-lunch hours, boosting customer satisfaction.

You also notice that certain team members excel at upselling during specific times of the day, resulting in higher sales. These observations may seem anecdotal, but they reveal the potential of understanding human behaviour in driving business outcomes.

Now, scale this scenario to a larger organisation. What if you could harness data to make strategic decisions about hiring, training or leadership development? This is the promise of people analytics: a transformative approach to aligning workforce insights with business objectives to optimise performance and return on investment (ROI).

I have seen first-hand the transformative potential of people analytics, even with limited human capital and resources. In a previous role as chief human resources officer of a digital company, I faced the challenge of high employee turnover and inconsistent revenue per employee. Armed with minimal tools, I began consolidating employee data, tracking metrics like attendance, performance ratings, and training participation. Through analysis, I discovered that employees who engaged in targeted learning programs consistently outperformed their peers.

Armed with this insight, I restructured the training programs to focus on high-impact areas and advocated for increased investment in employee development. The results were remarkable. Within a year, revenue per employee rose by 12 percent and just the next year it was 26 percent consolidated. Beyond these metrics, the organisation experienced a cultural shift as employees felt more valued and motivated by the company's commitment to their growth.

People analytics, at its core, involves collecting, analysing and applying data about employees to improve organisational outcomes. By connecting workforce behaviours to key performance indicators, organisations gain insights that lead to better decision-making. Strong people analytics can guide the hiring process by identifying candidates most likely to succeed and reducing costly turnover. It can enhance engagement by revealing what motivates employees and align roles to their strengths, maximising productivity.

An often-overlooked advantage of people analytics is its role in ethical decision-making. Organisations frequently face dilemmas when trying to balance profitability with fairness. Here, AI-driven analytics can play a vital role, removing bias from decisions and ensuring equity in opportunities. By relying on objective data rather than subjective judgments, businesses can make decisions that are both profitable and principled. For instance, salesforce uses analytics to monitor diversity metrics and ensure inclusivity in hiring and promotions. This ethical application of data not only strengthens trust within the workforce but also enhances long-term ROI by fostering a culture of engagement and loyalty.

The future of people analytics is expansive, with AI amplifying its potential. In today's dynamic business landscape, relying solely on intuition is no longer an option. People analytics is not just a tool for HR departments; it is a strategic asset that drives meaningful outcomes. People analytics does not merely measure performance; it paves the way for creating environments where employees thrive, and businesses flourish.

As I've experienced, even small steps in leveraging people analytics can lead to transformative results. It is not just about improving revenue or reducing costs -- it is about building a sustainable, resilient organisation. The future belongs to those who embrace this mindset, leading with data, investing in their workforce, and shaping a legacy of excellence.

The author is a professor of organisational behaviour at Centennial College in Toronto