After years of promotion, publicity, and discussion, the exponential growth we have expected in big data analytics in HR has begun. The percentage of companies capable of predictive people analytics doubled from 2015 to 2016 to eight percent. Seventy-seven percent of respondents to Deloitte’s Global Human Capital Trends 2016 survey now see people analytics as important to their businesses.
Part of the reason things are changing is that the software needed to gather and analyze data become universally available. Analytical capabilities are now built into human capital management technology or are available off the shelf. Most companies have upgraded their technology in the past few years, and analytics is a standard feature of modern people management platforms.
Why You Should Start with Recruiting
If you are just now contemplating getting into people analytics in your organization, we recommend you start with recruiting There are two reasons for our recommendation.
You Already Have the Data
One is that you have using automated recruiting for any length of time, you have a wealth of data about the people you hired. You have information about their education and work history. You have detailed information you gathered in assessments. You also have information about how they handled interview questions. Josh Bersin noted in a recent podcast how a company found that people who exaggerated their work experience had a high tendency to become toxic employees.
An Easy Win
The other reason is that recruiting, as Bersin says, is “an easy win.” A small change in how you select people can have a significant impact on organizational performance. A large call center we worked with impacted turnover by showing its recruiters how introverts stayed longer and performed better than their extroverted colleagues.
We have long known that managers tend to hire people like themselves. Part of it is personal biases. Some of it is the belief that their experience and background is the best model for success. Having data on which employees stay longer and perform better will help those managers overcome their misconceptions.
Things to Consider
We do not recommend you rush out and invest in a company-wide analytics project to measure everything you can. As in our other recommendations about organizational change and alignment, we recommend you start with a small, high-impact project that will show the bottom-line value of statistical analysis.
- Start small. A good place to begin would be high turnover in a well-defined employee group or performance in a sales team or customer service function.
- Do not turn your decisions over to machines. Predictive models can help you make decisions, but they do not possess the power of good judgment. Data doesn’t make better decisions. People with data do.
- Measure and report business outcomes, not processes. HR measures make business leaders’ eyes blur. We know quick time to fill results in better hires, but what matters is their performance.
- Hire good data analysts. Computation ability is only a part of the data analyst’s skill set. You need people who know how to ask the right questions and how to deal with ambiguous and imperfect data. Nobody has clean data, and yours will not be an exception.
- Understand that patterns can indicate a problem that may not exist.
People analytics will soon become a foundational strategy of successful organizations. If you have not already done so, we urge you to get started right away. Your company’s bottom line will thank you.
Pixentia is a full-service technology company dedicated to helping clients solve business problems, improve the capability of their people, and achieve better results.