Predictive analytics is now a mainstream function for HR teams across several organizations. If you are still not convinced, here are five areas where predictive analytics can help you manage your talent better. We also delve into how using predictive analytics in HR can significantly improve your bottom line.
First came Big Data â€“ a tech heavyweight that would dominate enterprise conversations for years to come. Then, predictive analytics followed: a worthy successor, taking the raw potential of unprocessed data to extract predictive insights which were actionable on the floor.
Predictive analytics has moved out of pure-play tech circles into more mainstream verticals. Companies are now taking what was the bastion of a select few, and applying it to real processes â€“ everyday operations that can transform business as usual. That’s where Human Resources enters the picture.
A 2018 report by OracleOpens a new window revealed that HR uses analytics more than any other vertical, outdoing even finance, a field where analytics guides several decisions. HR was also found to be more confident in using predictive analytics than its counterparts.
What does this mean? Perhaps that HR leaders and organizations are ready to combine the scientific and the human aspect of HR to create a talent pool that is efficient and has a significant tenure in the organization.
HR departments have long been entrusted with some of the most vital functions in any organization, starting at talent acquisition, moving to performance/productivity mapping, upskilling, and even outplacement. The power of analytics can make a sizable difference at every step â€“ bringing an element of â€œpredictable, quantifiable outcomesâ€ to something that’s quintessentially dynamic â€“Â human capabilities.
How Predictive Analytics Is Set to Transform HR Functions
Predictive analytics has the potential to benefit five key areas of human resource processes. We take a look at the areas of implementation and use cases demonstrating the effective use of predictive analytics.
1. Hire the right people
Great employees are a must-have for any successful business â€“ and â€œgreatâ€ does not only include the most talented or most experienced or even the most qualified candidate.Â Companies are increasingly looking at a â€œcultural fitOpens a new window â€ â€“ a metric hard to quantify, but essential to the organizational fabric.
That’s why innovators likeÂ OutMatchOpens a new window Â are deploying analytics to sift through a breadth of data, to determine which candidate will match the culture of the existing workforce.
Even traditional aspects of recruitment likeÂ checking backgroundsÂ and outliningÂ strategiesÂ gain a helping hand from analytics. Advanced technologies are making it easier than ever to extract these critical insights from what is a veritable mountain of historical data. In recruitment, predictive analyticsOpens a new window is set to be a game-changer for hiring talent most suited to an organization.
2. Finetune performance and boost productivity
One of the biggest applications of predictive analytics in HROpens a new window is in boosting productivity. Once the ideal employee is identified and successfullyÂ onboarded, it is up to HR to help maximize their role in the company. Using analytics, managers can keep a razor-sharp focus on performance, progress, slips, and triumphs.
This data, when aggregated, offers key insights: Who is more likely to outperform their colleagues? Who has the potential to improve further with some upskilling? Who is most open to mentorship and thus a future leadership position? By assigning scores to each candidate, predictive analytics can tell HR leaders exactly who the best candidate for all these programs will be.
3. Upskill the workforce
In 2016, the Mexico Government’s Ministry of Energy implemented a predictive analytics model for workforce planning with the goal to locate skills gaps in critical oil and gas occupations (both existing and potential) and eliminate them.
The solution takes several factors into account, such as adjustable macroeconomic variables, which directly correlate to demand and supply of skilled labor in the industry.
Notably, the impact of predictive analytics isn’t limited to large-scale, bespoke implementations. TakeÂ YoiOpens a new window , for example, a training solution that weaves analytics into workplace learning to make the experience more contextual.
The ability to predict gaps and plug them with minimal lags in performance is a great tool for any organization, and predictive analytics tools are making this simpler than ever before.
4. Foster deeper engagement
This is where analytics’ true power comes into play â€“ employee satisfaction has always been a palpable but hard-to-measure variable. Solutions that crunch disparate figures and non-numeric data (surveys, feedback, personal interactions) and offer insights usually offer little value to HR practitioners.
Gusto is a tool that maps a company’s â€œhappiness quotient,â€ leveraging analytics to understand morale levels, motivation needs, and the overarching status of an employer’s â€œpeople culture.â€ These are ideas that go beyond just tweaking workforce practices â€“ they can reshuffle the very basics of how managers communicate and engage with the workforce.
â€œEmployee experience programs used to take months to develop and to collect useful information,â€ says Webb Stevens, GM at Qualtrics. Their QualtricsÂ iQOpens a new window Â is a simple drag-and-drop interface that lets users quickly scan millions of response records and use the data to initiate changes in the employee experience strategy in a matter of days.
5. Retain top-tier talent
Here’s a quick snapshot of the criticality of good retention programs: a senior executive at a US-based contact centerÂ saidOpens a new window Â that in spite of having a workforce in the thousands, his average cost per attrition stood at USD 3,000. And when it came to the bottom line, the impact increased four-fold.
Employers invest sizable resources in identifying, onboarding, and training workers â€“ those with high turnover end up incurring severe costs. And with high attrition negatively impacting the employer brand, the circle could turn vicious. Predictive analytics takes historical data to unearth possible attrition before it happens.
â€œPredictive analytics analyzes an organization’s data to identify the factors that have the biggest influence on employee flight risk. Managers are now able to address potential issues before they become unmanageable,â€ said Ceridian’s VP of Dayforce Product Management, Eric Schuster.
In 2017, the company augmented Dayforce’s already robust HCM solution â€“ adding an analytics layer specifically designed toÂ predict flight risksOpens a new window .
From the Next Big Thing to a Mainstream Tool â€“ Predictive Analytics in HR Is Here to Stay
The myriad applications of predictive analytics and its wide acceptance by HR professionals means that this is a tool that can add tremendous value to an organization’s bottom line. Measuring unquantifiable data is now much easier, and using essential metrics for HR predictive analyticsOpens a new window can change the way organizations recruit and manage their people.
How is predictive analytics altering the face of HR and people management at your company?Â Tell us on FacebookOpens a new window ,Â LinkedInOpens a new window , orÂ TwitterOpens a new window . We would love to hear from you!