How HR Can Leverage Big Data

Companies that use big data and people analytics frequently see improvements in recruitment, hiring, retention – you name it. It’s no wonder more businesses are pulling out the checkbook and taking the plunge into the tech pool.

Yet the biggest skeptics of these Human Resources successes may be none other than HR professionals themselves.

At big industry conferences such as the Society for Human Resource Management’s annual confab, you’ll hear common complaints like these from HR pros:

  • “You can’t really evaluate a candidate until you sit down and talk to him (or her).”
  • “Show me the tech tool that can help me with my particular issues. There isn’t one!”
  • “It [people analytics] is just the latest buzzword.”

One HR pro we spoke to said big data solutions have helped her provide C-suite execs the hard info they need to make long-term growth decisions.

Yet she still calls big data and people analytics “mostly buzzwords … if it’s not useful data, or you don’t have a sound reason to use it, then it’s just a lot of background noise.”

Maybe so. But the general trend is undeniable: Investment in HR technology is on the upswing.

Companies believe they’ll need business intelligence and people analytics to help them stay ahead on the HR front, according to a Forbes report.

Competition for the best new hires is fierce already. A CareerBuilder survey says 40% of HR pros expect to hire full-time workers in 2017 – that’s the most enthusiastic hiring forecast CareerBuilder has published in 10 years.

Better Decision Making

“Reams of data” and a wealth of software choices may not help every HR professional with every current hiring challenge on the front burner.

Regardless, you don’t want to be the company that can’t make heads or tails of its business data and isn’t prepared to answer critical personnel questions – Where are the best candidates hiding? Is now the right time to hire? What are our competitors likely to do?

One of the most common complaints CEOs and CFOs make about HR is:

“Don’t give us anecdotal evidence. Give us real data.”

An HR pro we know described how a lack of data almost backfired:

“We thought turnover was unusually high in one of our divisions. That obviously reflected poorly on the person in charge of that team. It wasn’t just my impression. From the top on down, there was this belief company-wide … that this particular division couldn’t hold on to strong performers. … Then we took a look at the numbers, went back several years to test that widely held belief. Guess what – it wasn’t true. Turnover there was no better or worse in our other divisions, across the board.”

HR tech vendors aren’t churning out “one-size-fits-all” people analytics solutions. They’re working with companies to create platforms that help companies focus solely on:

  • Present and past employees
  • Candidates that satisfy companies’ criteria

That can sound like music to the ears of HR pros at small firms charged with beefing up recruitment or gaining a hiring edge on competitors. There’s no shortage of dynamic HR vendors available to help.

Is Big Data the Solution?

Here’s another reason why big data can help HR: Forty percent of hiring pros say they’re dealing with a talent shortage, according to a recent Manpower Group survey. Job candidate scarcity hasn’t been that big of a problem since 2008 when the markets crashed.

Rather than settle for subpar employees, many firms are letting these positions stay unfilled for significant time periods. Some might look to widen the salary scale for those tough-to-fill positions. Others will look to train and promote from within. Big data and people analytics can streamline this process.

You can be sure some firms will continue to make their personnel decisions based largely on anecdotal data – “Dave gets results and works hard. He’s a go-getter.” After all, it’s the way businesses have made decisions since the beginning of time, and more often than not, these “gut” decisions work out fine. (Or so we think.)

But more and more, companies are looking for hard data to support their decisions, and they’ll start to rely on people analytics and business intelligence solutions instead.

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