Today, predictive analytics is having an impact on nearly every field, including human resources. Predictive analytics has broken out of the pure-play tech sectors and now has real applications that can help transform businesses and productivity.
HR departments perform some of the most critical functions in an organization such as talent acquisition, performance and productivity mapping, and upskilling. The power of predictive analytics brings the facet of predictable, quantifiable outcomes to an area that has frequently relied upon human intuition.
Here are three key ways that predictive analytics is impacting human resources.
Talented employees are a must for a successful organization. Yet, this is just a beginning. Businesses need experience, skills, and good corporate cultural fit. This last element is hard to quantify, but just as necessary as the other aspects.
Predictive analytics is having a positive influence on even conventional areas of talent acquisition such as background checks and outlining strategies. Advanced technology is enabling organizations to easily extract these crucial insights from the massive mountains of data now available.
Once you have acquired and onboarded the ideal employee, HR must ensure maximum performance for the company. Managers can now use analytics to hone in on key factors of performance, progress, errors, and successes. The aggregated data offers important, actionable insights.
In addition, when objective data is shared with employees, individual performance and productivity tend to improve, as ownership of the numbers increases. On the other side of that coin, it is much easier to address performance problems when objective factors are available.
Even government agencies are using the predictive analytics model for workforce strategy. This model enables managers to pinpoint gaps in skills, thereby giving HR more information about what skills to seek in new hires. Retention goes up and turnover goes down, while the team as a whole becomes stronger.
This type of strategy takes into account several factors depending on the organization, such as macro- and micro-economic variables which relate to the supply and demand for specific skills in an industry.
In addition, this strategizing is applicable to SMEs as well as enterprise-level organizations. The ability to identify gaps and fill them quickly to maintain optimum performance is a goal in any business.
Electronics and appliances retailer Best Buy uses HR predictive analytics to assess the impact of employee engagement on store profitability. Best Buy’s HR team found that just a one-tenth of one percent increase in employee engagement results in an increase of over $100,000 in the store’s annual income. The results of that particular predictive analytics helped the Best Buy HR team decide to conduct four engagement surveys each year, rather than just one.
You might already be using predictive analytics without even realizing it. Do you review prospective candidates’ Facebook profiles prior to hiring? As far back as 2012, a study revealed that it is possible to predict someone’s personality and future work performance based data contained in their Facebook profile.
Of course, predictive analytics will never replace human intuition, but it can provide an objective, accurate, and quantitative foundation on which HR managers can base their predictions and forward-thinking decisions.