Understanding and Using Averages

Covering Assessment Criterion 1.4 from 3CO02 Principles of Analytics, this video focuses on the three types of average — mean, median and mode — and the question of which to use when working with organisational data. Rather than treating these as interchangeable, the video examines the conditions under which each measure is most appropriate, with particular attention to how the presence of outliers can shift results and distort conclusions when the wrong type is selected.

The video works through salary data as a concrete example, using figures that illustrate how the mean and median can diverge sharply once an extreme value enters a dataset. This comparison is used to show why median is commonly preferred for pay analysis, while mean remains useful for calculations such as total cost budgeting and average training hours per employee. Mode is addressed separately in the context of categorical data, including employee survey scores and benefit selections, where frequency rather than magnitude is what matters.

People practice applications covered include average time to hire, average tenure, average absence per employee, and average training spend per head. The video also addresses how to interpret averages in context, using sector norms for absence rates as an example of why the same figure can carry different significance depending on the organisation. Reporting multiple averages alongside one another — as organisations commonly do with salary data — is also discussed as part of presenting a complete and accurate picture to an audience.