Big data has been gaining increasing importance lately in the world of business, with the capability of providing truly groundbreaking benefits as long as an organization knows how it intends to use that data to generate insights. In the case of a human resources department, using big data alongside workforce analytics can offer the company advice into the kind of employees that thrive at the business and what the company should be looking at when hiring in the future. We explored the impact of workforce analytics and big data on the HR department's ability to hire the right people.
Here's how human resource departments can benefit from workforce analytics
1. Evidence-based recruiting decisions
Modern HR organizations benefit greatly from predictive analytics through the elimination of potential misfits at an early stage. Employing recruitment analytics can improve the efficiency of the recruitment process, reduce time and effort to identify candidate quality and ultimately lead to significant cost savings for the business.
2. Workforce intelligence for proactive strategy
Advances in workforce analytics offer a powerful way to gain critical workforce insights for informed strategy formulation along with measured operational outcomes and ROI. This makes a unique blend of being proactive about the future talent needs of the organization along with a retrospective insight to determine continuous strategic and operational shifts needed for the best talent outcome.
3. Growth and forecasting
Without the ability to know where you came from, how will you know where you want to go and how to get there? Using big data and analytics will provide a resource and a tool to help formulate that plan and path. It will keep you from making the same mistakes again, it will keep you and the organization honest and accountable, and it will help you make educated decisions.
4. Driving business strategy
As HR and ER departments become more integrated and drive employee experience, sharing insight and trends with decision-makers is vital. Only 22% of organizations report employee data to the board and just over half do so with the C-suite. It should be 100%. To better demonstrate our value to the organization, we need to gather data, use it and share how those efforts help the business.
5. Better performance evaluation
Analytics and big data have shown great potential in areas such as performance evaluations. Millennials and Gen Z make up the majority of today’s workforce, and they prefer real-time feedback. Leveraging cloud-based solutions that offer data analysis is crucial to gain the bigger picture of an employee’s contribution within an organization.
6. Lowering turnover costs
Predictive analytics can now enable us to build algorithms to predict turnover, not on an aggregate basis, but on an individual employee basis. Data points specific to your company or aggregate data from a number of companies can be fed into an algorithm that will allow you to determine who is a top-flight risk. HR functions can easily touch base with 25 employees the algorithm may identify.
7. Creating fair pay systems
One big benefit is creating fairer pay systems. Knowing how large cohorts of companies that are similar to yours are paying, and how your company compares is the first step in understanding and creating fair pay practices and ensuring that your company is paying fairly.
8. Analyzing benefit spend, associated engagement
Benefits are the second-largest expense after payroll. They play a pivotal role in employee engagement. Understanding what benefits are utilized will help make better decisions about future investment. Big data can also help reduce compliance risk by identifying trends that could drive future risks.
9. Talent discovery and mobility
Understanding data about employees, including skills, experience, performance indicators, as well as analysis of trends over time, can help identify people in your organization that has high potential and also offer insights into the characteristics that are a better fit for a given role. Additionally, future workforce development and planning can benefit from an effective big data strategy.
10. Trend spotting
Your HRIS, intranet engagement and more can help you spot trends in the workplace you may not have noticed anecdotally. Attrition, retention, content you share should be analyzed quarterly to determine what you should start doing, stop doing and keep doing. The benefits of reviewing the data and spotting the trends are to tailor your HR and engagement strategies to keep your staff engaged.
11. Streamlined talent acquisition
Bad hiring decisions cost employers up to 30% of an employee’s first-year earnings. Therefore, anything that can be done to ensure the right employee is hired for a role the first time will save employers money. By leveraging big data, employers can determine what qualities make an employee successful in a role, then filter through thousands of resumes to identify the most qualified candidates.
12. Understanding how to reskill candidates
With the lack of skilled workers and employers having to create their own labor pool, benefits from workforce analytics will play a key role in breaking down job requirements to better understand where and how to reskill candidates or employees. With the right data, employers can look at what someone brings to the table in terms of creativity and innovation, and translate those skills into what they need.
13. Separating fact from fiction
Data analytics can help HR teams distinguish hearsay from reality. Inaccurate perceptions can negatively impact productivity, morale, and quality. Skilled managers can address these issues with accurate information that can realign teams with their mission and goals. While instincts are helpful in many industries, big data tools allow us to utilize the best of human intuition and quantitative information.
Since benefits from workforce analytics is still in the development stage, HR is still awakening to its immense potential, there will soon be a time when using these tools will become far easier and cost-effective.