Sentiment analysis: Why is it so important now?

Sentiment analysis enables businesses to understand public opinions, customer sentiments and brand perception in real time, facilitating data-driven decision-making and enhancing the customer experience


Sentiment analysis is the process of using natural language processing and machine learning techniques to determine the emotional tone behind a piece of text, whether positive, negative, or neutral.

The term was derived before 2000, with early research focusing on classifying sentiment in product reviews and social-media posts. In recent years, sentiment analysis has gained immense importance due to the explosive growth of online content and the need for businesses to understand customer opinions. It helps companies make data-driven decisions, monitor brand reputation, gauge public response to products, and enhance the customer experience, all leading to better strategic insights.

Why sentiment analysis is crucial

With the current rapid growth of business models and advancements in technology and generative AI, sentiment analysis is even more crucial now due to the volatile environment. In times of uncertainty and rapid change, public sentiment can fluctuate drastically, impacting businesses and societies. Organisations need to stay attuned to these sentiments to effectively respond to customer needs and concerns.

Regarding employee issues, sentiment analysis can play a vital role in proactively identifying and addressing potential problems such as burnout or disengagement. By analysing employees’ communications, feedback and social-media posts, organisations can detect early signs of dissatisfaction or stress. Recognising these patterns enables timely interventions, such as offering support programmes, adjusting workloads, or improving workplace conditions. This not only helps retain valuable employees but also fosters a positive and productive work environment.

Human-resource leaders can leverage sentiment analysis to gain valuable insights into employee perceptions of leadership and management styles. By analysing employee communications, surveys and feedback, they can identify patterns that reveal the impact of leadership on morale and productivity.

According to Amit Sharma, CHRO, Volvo, “Unlike traditional once-a-year employee-engagement surveys, sentiment analysis offers real-time data, providing a continuous and sensitive understanding of employee sentiments.”

“This ongoing feedback enables organisations to detect potential issues such as burnout or disengagement early on, allowing them to implement timely interventions and prevent larger problems from escalating. Similar to addressing safety concerns in a business setting, sentiment analysis helps organisations take preventive measures, ensuring a healthier and more productive work environment for employees,” says Sharma.

“Unlike traditional once-a-year employee-engagement surveys, sentiment analysis offers real-time data, providing a continuous and sensitive understanding of employee sentiments”

Amit Sharma, CHRO, Volvo

Pradyumna Pandey, head-HR, manufacturing, Hero Motocorp, observes, “Sentiment analysis empowers HR leaders to understand the impact of leadership and management styles on employee productivity. With the aid of technology and real-time feedback, sentiment analysis allows the capture of employee sentiments, aspirations and moods. This predictive insight helps to craft effective strategies for the future, and identify potential challenges”. He goes on to add, “By leveraging sentiment analysis, HR leaders can proactively address concerns, retain talent and enhance employee experience, acknowledging the crucial role talent plays in achieving a competitive advantage for the business.”

Sentiment analysis can significantly support talent-acquisition efforts by helping HR teams assess candidates’ fit with the company culture and values. By analysing applicants’ social-media presence, cover letters and communication style, organisations can gain deeper insights into candidates’ attitudes and alignment with company values. This data-driven approach ensures that the right candidates are selected, increasing the likelihood of long-term retention and reducing turnover. It also helps build a workforce that shares the organisation’s values and contributes to a positive company culture.

According to Sharad Verma, CHRO, Iris software, “Sentiment analysis is critically important for organisations to make sense of employee voice. While numerical ratings and NPS provide an overall rating, numbers without emotional understanding and intensity do not provide a realistic view”.

Verma feels that sentiment analysis of qualitative comments help to understand themes, intensity, nuances, keywords and the emotions behind the sentiments.

“Sentiment analysis also help to understand the range of emotions, the prevalence of sentiments and the context behind why people feel the way they they do, ”

Sharad Verma, CHRO, Iris software

Sometimes, certain comments bring out real issues succinctly and the gravity of emotions can only be appreciated by sentiment analysis.

“Sentiment analysis also help to understand the range of emotions, the prevalence of sentiments and the context behind why people feel the way they they do,” he adds.

Talking about his experience in his previous organisation, Pandey says, “As an essential service provider, many employees were hesitant to come to work due to the fear of contracting the virus during the pandemic. By analysing their sentiments, we were able to take proactive measures, such as implementing a term insurance plan for everyone, to address their concerns and ensure their safety.”

“Sentiment analysis is also valuable for understanding customer sentiments, especially with the growing influence of social media, as it enables organisations to adapt and cater to customer preferences in a customer-centric market,” adds Pandey.

Incorporating sentiment analysis into performance-management systems provides HR leaders with a comprehensive view of employee engagement and performance. By combining traditional performance metrics with sentiment data, organisations can better understand the drivers of employee satisfaction and motivation.

During times of crisis or significant organisational change, sentiment analysis becomes a valuable tool for HR leaders to gauge employee sentiments and concerns. Monitoring employee communications and feedback enables organisations to promptly address issues, provide necessary support and foster a sense of stability and trust during challenging periods.

Ethical considerations

While sentiment analysis offers significant benefits, organisations must navigate potential challenges and ethical considerations. Ensuring data privacy and obtaining proper consent from employees is crucial to maintaining trust and complying with data-protection regulations. Human resource leaders must also address biases that may exist in sentiment-analysis algorithms to ensure fair assessments.

“The confidentiality of data is crucial to ensure participants’ trust and authenticity of the information gathered”

Pradyumna Pandey, head-HR, manufacturing, Hero Motocorp

Pandey concurs, “The confidentiality of data is crucial to ensure participants’ trust and authenticity of the information gathered. Organisations must guarantee data confidentiality and assure individuals that their data will be used responsibly for organisational growth or medical purposes.”

He emphasises that maintaining data confidentiality and privacy are integral aspects of ethical and responsible data-collection practices.

Transparent communication with employees about sentiment-analysis initiatives is essential to alleviate concerns and gain employee buy-in. Moreover, HR leaders must convert sentiment-analysis data into actionable insights and follow through with appropriate interventions to drive meaningful change within the organisation responsibly. By striking a balance between data-driven decision-making and ethical considerations, organisations can leverage sentiment analysis to foster a positive and supportive work environment for their employees.

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