What Is a Research Analyst’s Role in Corporate Decision-Making?

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Consumers make decisions every day. They do it when they select Coke over Pepsi, or a Honda over a Volkswagen. They do it when they choose a cell phone provider, a new computer or a pair of headphones. Although consumers make millions of decisions every day, a decision only proves that they took an action — not the reasoning behind it.

On the other end of the transaction, companies are trying to figure out why consumers make the decisions that they do. They want to get to the why. If they can understand why consumers act the way that they do, they can use that information to adapt their marketing approach to fit the motivation. Targeted approaches tend to work better in sales and marketing, which is why companies invest significant capital in researching consumers.

The process of studying and determining consumer motivation falls under the umbrella of research analysis. Research analysts create, conduct and analyze consumer behavior to decipher the psychological reasoning behind why consumers make the choices that they do.

These skills have made research analysts a hot commodity on the job market. Companies in several different verticals look for analysts with an educational background in applied psychology to provide them with actionable insights into their customers. In today’s world of commerce, research and hard data drive decisions, to leave as little to chance as possible. Research analysts are the driving force behind this.

What Is Research Analysis?

Research analysis is the process of researching, studying and interpreting data to extract valuable insights that key decision-makers can use. This can be applied to many different industries, and often focuses on consumer and organizational behavior.

The term “research analysis” is broad and is either directly related to or used interchangeably with other similar terms. In marketing and business insights contexts, these terms include the following:

Market research. This is the process of gathering and analyzing information about the market and its conditions to support a business decision. This can inform many aspects of marketing, such as pricing analysis and how to appeal to certain audiences.
People analytics. Also known as talent analytics or HR analytics, talent analytics is the process of studying the functions, challenges, processes and other key attributes of company personnel to better understand their needs and improve how they work together.
Consumer and audience insights. Consumer insights are the key interpretations of consumer data that describe how a consumer or audience thinks and feels that companies base their decisions on. Consumer insights dictate the recommendations that a research analyst gives to key decision-makers.
User experience (UX) research. Through the study of target users and their preferences, research analysts can gain data to help apply real-world insights to design methods. This is usually done through attitudinal and behavioral approaches.

Key Elements of Research Analysis

Although different market research terms can have varying emphases, they share key elements. These elements include the following:

The goal of understanding the psychological factors behind human behavior
The process of identifying a group, collecting data and analyzing it
Using analyzed data to come to a conclusion or extract valuable insights
Using insights to make data-driven decisions

The goals of research analysis vary by company; however, it generally relies on these aspects to make data-backed decisions.

Research Analysis in Market Research

Companies use market research analysis to identify target markets, analyze and forecast market trends and provide direction on sales and marketing campaigns. After identifying a business problem, research analysis can be used to collect quantitative and qualitative data and use findings to create a marketing solution.

For example, a research analyst working in market research can use consumer and market insights data to identify and target productive market segments for certain products and services, as well as identify potential obstacles on the path to purchase.

Research Analysis in Consumer Insights

For research analysts in consumer insight departments, understanding consumer motivation is crucial. Much of that depends on conducting extensive qualitative research: nonnumerical data based on subjective opinion.

For example, a research analyst in a consumer insights department may be tasked with finding out how consumers are responding to a fast-food menu item. The opinions of those surveyed about how the item tastes would be qualitative data since they’re subjective.

Research Analysis in People Analytics

Research analysis in people analytics departments involved collecting and understanding all people-related processes within a business. This involves collecting and analyzing relevant HR and organizational data, then transforming the findings into tangible insights that can improve employee potential and business performance.

For example, a research analyst in a people analytics department may need to know how to improve turnover rates at their company. To do so, they can identify specific teams or departments at risk and take preventative measures to keep their employees happy.

What Does a Research Analyst Do?

The day-to-day tasks of a research analyst largely depend on the vertical they work in and the type of information they’re responsible for finding. For example, an analyst in market research is going to have a different set of responsibilities and goals from a human resources (HR) analyst. Research analysts work across all industries, from packaged goods, to apparel and entertainment.

Keeping that in mind, it’s best to break down the responsibilities of analysts by job title rather than trying to group them all together. The most popular research analyst job titles in people analytics or consumer insights departments include:

Market research analyst
Consumer insights analyst
HR analyst

Market Research Analyst

A market research analyst studies the conditions of a particular market to find areas of opportunity for a company to sell its products or services. For example, a market research analyst at a toothpaste company would study the oral care market to learn what toothpaste, floss and other oral care products people are buying.

The typical duties of a market research analyst include the following, according to the U.S. Bureau of Labor Statistics (BLS):

Devising methods of collecting data about the consumer and the market, such as opinion polls or surveys
Using statistical software to analyze data
Extracting consumer and market insights from the data
Preparing reports about consumer and market insights for key decision-makers to review

Consumer Insights Analyst

Consumer insights analysts (also known as customer insights analysts) work with large sets of consumer data to identify valuable insights and trends. To collect data, they design customer surveys and other methods of measuring consumer opinion. For example, they might design a survey that asks residents of major cities what types of restaurants they frequent, resulting in quantitative data that can be analyzed using statistical software.

The typical duties of a consumer insights analyst include the following, according to Indeed:

Performing consumer research using various methods to collect data
Using statistical software to analyze data
Maintaining the database of consumer data to ensure its accordance with quality standards
Collaborating with other departments and individuals, such as web designers, content creators and marketers to develop improvements to the product line or service

Human Resources Analyst

HR analysts collect and compile data pertaining to a company’s employees. They then use that data to make recommendations to key decision-makers and company leadership about hiring and retaining staff. They’re also instrumental in helping to facilitate employee training.

The typical duties of an HR analyst include the following, according to Betterteam:

Collecting employee data using various methods, such as employee surveys, payroll outputs, employment records and exit interviews
Analyzing data to find trends and insights pertaining to employee turnover, employee satisfaction, recruitment practices and compliance issues
Compiling key insights and trends in data and presenting them to company leadership and key decision-makers
Optimizing the company to improve employee satisfaction, employee retention and recruitment practices
Working with managers and company leadership to devise short- and long-term goals for employees
Evaluating current positions and potential new positions within the company
Developing company policy changes that are intended to improve workplace culture and the quality of candidates who are hired

Research Analysts and Corporate Decision-Making

Companies hire research analysts to use statistical information to increase corporate insights on various issues. In people analytics, marketing, or consumer insights contexts, this could mean gaining an understanding of employee or staffing issues, identifying business problems, determining how to approach a marketing campaign or making new discoveries about consumers.

These insights drive their decision-making, which is more commonly known as data-driven decision-making (DDDM).

DDDM is the use of metrics, facts and data to guide business decisions and insights that are in line with the company’s goals and objectives, according to Tableau. The advantage of DDDM is that it removes the guesswork from the decision-making equation. When decision-makers are asked about the reasoning behind their decisions, they can refer to data and insights from the research analyst.

The benefits of DDDM include the following, according to Tableau:

Offers a greater sense of transparency in the decision-making process
Offers a greater sense of accountability pertaining to the people that make decisions
Promotes continuous improvement and greater innovation
Allows for companies to make informed decisions much quicker
Promotes better feedback from clients and customers

Additionally, DDDM often yields better hiring choices at companies, improved performance management and marketing campaigns that are more aligned with consumer preferences.

However, working with business leaders and using DDDM can be challenging. Some CEOs and key decision-makers simply won’t listen to the data, opting to rely instead on their own years of experience and “gut feelings.” 58% of respondents said at least half of the regular business decisions being made in their company were based on experience and feel, rather than data, according to a recent report from the Business Application Research Center (BARC). Additionally, the report found that 60% of high-ranking companies based their decisions on data, compared with 70% of struggling companies that based their decisions on instinct.

What this data tells us is that going with your gut is likely going to be the wrong decision. However, research analysts can’t force executives to buy into DDDM.

Research Analyst Education and Skills

Many different varieties of research analysts work in several different fields. The education and skills they need to be successful at their job are generally dictated by the role itself.

Market research analyst. According to the BLS, market research analysts need a bachelor’s degree in business, communications or a social science field to qualify for entry-level work. The BLS stresses that courses in social sciences and communications are critical to understanding consumer behavior. An advanced degree, such as a master’s degree in applied psychology, can open the door to senior positions.
Consumer insights analyst. Consumer insights analysts need a bachelor’s degree in marketing or a similar area of study, such as applied psychology, business or statistics. Entry-level work in retail or customer analytics, marketing or business management can be a path toward becoming a consumer insights analyst.
HR analyst. According to the Society for Human Resource Management (SHRM), HR analysts should have at least a bachelor’s degree in HR, psychology, business administration or a related field. Additionally, candidates should have at least three years of experience in a field such as recruitment, employee benefits, training, job classification and compensation or equal opportunity compliance. SHRM encourages candidates to obtain certification in the field of HR, such as SHRM Certified Professional (SHRM-CP) or SHRM Senior Certified Professional (SHRM-SCP). While not required, certification and advanced education can help individuals stand out from other candidates.

Research analyst skills vary by role, but a core group of skills is common across the board. They include the following:

Analytical skills for interpreting large amounts of data
Critical thinking skills for problem-solving
Communication, presentation and storytelling skills for relaying data insights to key decision-makers
Attention to detail to ensure precise data and insights
Technological skills to analyze data

Research Analyst Salary and Job Outlook

A research analyst’s salary and job outlook depend on the role and industry.

Market research analyst. According to the BLS, the median annual salary of market research analysts was $63,920 in 2021. The BLS projects that the number of positions for the role will grow by 22% between 2020 and 2030.
Consumer insights analyst. According to Payscale, the median annual salary for customer insights analysts was approximately $65,000 as of August 2022.
HR analyst. According to Payscale, the median annual salary for HR analysts was approximately $60,800 as of July 2022.

Improve Insights as a Research Analyst

Research analysts are critical in helping companies better understand the consumer using psychological methods and data-gathering techniques. By following consumer insights, companies can more effectively target their marketing, develop products and make decisions that are driven by data rather than by instinct. Statistically, companies that let data dictate their decisions outperform those that go with their feelings.

Those who are interested in becoming research analysts are encouraged to invest in their education. Degrees in business and mathematics are appropriate for those who plan on working with a lot of qualitative data. However, many companies are seeking professionals with expertise in applied psychology, which combines psychology and business to give a better understanding of the motivations of consumers and employees..

Recommended Reading

How Cultural Competence in the Workplace Creates Psychological Safety for Employees

The Psychology of Entrepreneurship

Why Companies Need an Organizational Development Consultant in 2022

Sources

Business Application Research Center, How Many Business Decisions Are Based on Gut Feel Rather Than Data?

Business 2 Community, “How to Use Marketing Psychology to Influence and Persuade”

Corporate Finance Institute, Research Analyst

Crowdspring, Marketing Psychology: 21 Key Principles of Human Behavior

Esomar, …What Now? Pricing Insights

Forbes, “Can Market Researchers Save the Day by Becoming Decision Scientists?”

Gartner, People Analytics