By H. E. James, MBA
Big data is everywhere. Essentially, an organization can collect data on anything, from point-of-sale receipts to phone call transcripts. Even Human Resources can and should be collecting and analyzing data. In order for one HR department to have a competitive advantage over another firm’s, this kind of business intelligence is key.
As reported in this resource from Boston University’s Online Computer Information Systems Program, at least 65 percent of mid-office professionals would be able to make better business decisions if they had access to data analytics. While data is likely already being analyzed for measuring performance, there are many other aspects of talent management which can benefit from the practice.
While HR managers should never discount the human factor in hiring, there is nearly unlimited potential for talent analytics in the hiring process. Corporate HR analyst Josh Bersin wrote in 2013 about one of his clients using data to analyze the qualifications for a sales position.
This client, a large financial institution, regularly put the most weight on sales candidates’ academic records. The better the school and the grades, the better the performance, or so its HR team thought. Instead, what the analysis found was that the top sales performers excelled in areas such as self-direction, high-pressure sales like the auto industry, and were attentive to details such as grammar and spelling. Grade point average, the school, and even a candidate’s references couldn’t predict performance.
As Bersin points out, “Once this data was put back into the recruiting process, the company saw more than $4M improvement in revenues in the next fiscal period.” The hiring process itself costs organizations money, and the better-informed the recruiting process, the less often it needs to be employed.
Hiring the perfect candidate is just the beginning for talent analytics. Professional development is key for employees in highly competitive industries, and you can use analytics to determine the best programs for your employees.
Look at the training programs and career development opportunities you already provide. If participation in these programs is poor or your employees aren’t putting their learning into practice, it may be time to look into different human capital development tracks.
In another sales representative model, Greta Roberts and her team analyzed the performance of talent before and after training. Surprisingly, the data showed that training didn’t have a huge impact on performance. What it did show, however, is that if your organization is investing in training and development for bottom performers, this investment by and large has no returns. Instead, HR can use this type of data to invest in career development for high-performing talent.
There is always talent that will outperform colleagues and peers, no matter the career development investment, or lack thereof for that matter. However, these high performers will be your hardest to retain.
Use data to identify your highest performers and then identify what makes them thus. Typically, what turns an employee from simply employed to engaged are factors such as challenging work and opportunities for advancement. Employee turnover is also typically related to leadership.
Analyze existing exit interview data to determine reasons for leaving. If this data has never been analyzed on a large scale, it may surprise you. Does the data show it’s outside forces? Perhaps, instead, it’s a lack of support for employees who wish to earn advanced degrees related to their field.
Your organization has likely been using business intelligence in other units for years. If you aren’t using it in HR, now’s the time to start. It can only help in the long run.