Human resources (HR) management is essential to any business, and perhaps even more so with the rapid pace of digital transformation. HR managers are responsible for attracting, recruiting and retaining staff with the required skills. Fortunately, digital transformation is also making HR managers’ lives easier, because the growth of People Analytics is very definitely helping us to do our jobs better and ensure that HR is fully aligned with the company strategy to deliver business value.

Over the past months, I have seen an increase in both line managers and staff wanting to supplement their development plans with the support of analytics. From a practical viewpoint, understanding the possibilities, and limitations, is critical. I found these five applications for people analytics to be productive:

1. Using performance and skills analysis to improve internal and external recruitment

Recruitment has always been a bit ‘hit and miss’, with every HR manager having their own views about what makes the ideal employee, in terms of combination of educational background, experience, and skills, and also how best to assess candidates. Analytics, though, can take the guesswork out of the process. One Asian bank, for example, analysed its employees’ performance to discover that its highest-performing employees were from five specific universities, and three specific certification programmes, and had experience in particular roles within the company, which clearly provided very effective training. Using this information in recruitment, performance management and assigning managerial roles has improved productivity by 26% and net profit by 14%, and also reduced turnover of new hires by almost 80%, suggesting that the targeting of recruitment efforts is much more effective.

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2. Removing biases in HR processes

Nobody wants to think of themselves as biased, but it is important to be aware that some of the most dangerous forms of bias are unconscious. It is, for example, hard not to be drawn to people who are similar to you, even if you are trying very hard to increase diversity in your hiring. One professional services company found that using analytics helped it to overcome this kind of unconscious bias. It started using an automated profiling system to sift CVs as part of its hiring process. As well as saving a huge amount of time and money, the company found that the number of women whose CVs were selected for reading — on merit, and not specifically by gender — increased by 15%, suggesting that there was some unconscious bias in its previous sifting methods.

3. Improving understanding of the factors affecting employee turnover, and how to address them

Employee turnover has a huge impact on organisations. Being able to predict it accurately saves on recruitment costs, and therefore also the knock-on costs of onboarding and training. It can also make the organisation more efficient, by ensuring that employees are in the right job. One insurance company identified the people most likely to leave as those in small teams with underperforming managers, and who had not had a promotion for a while. The company discovered that the best way to reduce turnover was not to offer bonuses — its first thought — but instead to help these individuals to change teams and managers.

Join this on-demand webinar on how to use analytics to gather insight into employee satisfaction, predict triggers for employee attrition and make proactive decisions regarding your workforce.

 

4. Applying marketing logic to employer branding and reputation

Sentiment analysis and text mining techniques are hugely powerful because they can take unstructured data, such as social media posts and comments, or a collection of exit interviews, and turn them into useful insights. This has been one of the big breakthroughs of new analytics tools, and allows HR departments to apply marketing logic to employer branding, because they can analyse employer reputation on social networks and ensure that branding is delivering the right message.

5. Supporting strategic decisions such as ‘make or buy’

HR should be crucial to strategic decisions within organisations, because it is fundamental to acquiring the right skills to support the business decisions. Too often in the past, however, HR has not been able to take its place at the decision table, because it simply did not have the necessary information. Analytics makes that a thing of the past. For example, when deciding how to acquire critical skills, one crucial part of the decision is whether to ‘make’ — that is, to train and develop your own staff to attain the skills, or ‘buy’ — recruit someone who already has the skills, either as an employee or a consultant. People Analytics can help HR managers to understand the availability of critical skills on the market, and combine that with evaluations of soft skills and personal results about current employees to assess the relative likelihood of ‘make’ or ‘buy’. This ability to bring data and insights to the table means that reliable workforce planning is now possible.

Learn how human resources professionals can use advanced analytics to become strategic partners within the business. Listen in on the webinar: Taking People Analytics from Good to Great: Best Candidate Analysis

People analytics is still an emerging domain; but one that is taking off fast. Line managers and staff who can see the benefit of ‘self-service’ will be active participants, but there will also be those who have concerns, and will naturally be late adopters. The HR professional has an exciting adventure ahead as we help the business navigate most effective options.