Many things can drive business decisions. One thing that really helps to make the right decision is big data mining and analytics. Data-driven business activities have increased over 100% in the past year; that’s how important it’s becoming to corporations large and small.
Talent analytics is one of the best ways a company can use big data. It uses data to assess potential candidates, and also to track current employee productivity and efficiency. Forbes contributor Meghan Biro refers to it as "an incredible predictive tool, a trustworthy future-caster, HR’s own crystal ball."
And it is hardly new. According to Harvard Business Review, way back in 2010 brands such as Google, Best Buy, Sysco, "were just beginning to understand exactly how to ensure the highest productivity, engagement, and retention of top talent, and then replicating their successes."
Talent analytics can work for your company, and increase ROI, in three basic ways:
1. Discovering Your Model Employee
A hiring template allows HR to make decisions that are based on sound data instead of guesswork or "intuition." A template shows what a model employee should possess before he or she is hired, along with what skills and qualifications are needed. This makes evaluating candidates for new positions more efficient, and more effective.
For example, when Purple decided it was time to hire a CEO, they put talent analytics to work. Now, nearly a year later, they’ve found him. This process is not a psychological test like putting different shaped wooden pieces in their slots. It’s a precisely defined pattern that comes from extrapolating a huge amount of information on the recruit to see how well they match the skills and abilities determined to be the most needful for the company. It takes some hard work and investment to set the software up properly, but once it’s in place it can predict the best talent matches with stunning accuracy.
In other words, talent analytics takes much of the guesswork out of hiring.
In fact back in 2013, Forbes contributor and author of the foreword to the book Talent Analytics For Dummies, Glassdoor Special Edition Josh Bersin shared a very telling chart in his post Big Data in Human Resources: Talent Analytics (People Analytics) Comes of Age.
Source: "Big Data in Human Resources: Talent Analytics (People Analytics) Comes of Age" - Forbes,... [+]
The chart reflects the findings of a statistical analysis of sales productivity and turnover conducted by a large financial services company. As per Bersin the analysis looked at sales performance over the first two years of a new employee and correlated total performance and retention rates against a variety of demographic factors.
What I found truly remarkable was the fact that the heretofore tried-and-true beliefs that education and references had a direct impact were proven to be completely untrue. Moreover when this same company instituted a new screening process for employees based on these results, their revenues increased by $4 million.
2. In-House Promotion
Now that the right talent is in place, it’s time to determine the best way to give them more responsibility and resources to work with. It’s usually more economical to promote from within than to start from scratch with an outsider unfamiliar with the company culture and policies. Case in point: Increasing employee engagement investments by 10% can increase company profits by $2,400 per employee per year
That’s where talent analytics comes in. Conversely, it also helps determine which, if any, employees are already in their peak position and should be left there for maximum benefit to themselves and the company.
Managers tasked with finding promotable talent can now use talent analytics technology to discover who would best fit the parameters of a new position -- and who would not. One cautionary note: hackers have been increasingly targeting brands’ employee records and data which why you need to work with a company like Dell, Zscaler, or Trend Micro who offer security-as-a-service products for this very reason.
Talent analytics is also a valuable tool in retaining employees. Too often an employee who does not feel comfortable or supported in a new role decides to leave rather than work things through by asking for help. So it helps for the analytical software to have a template that measures a person’s ability to handle new responsibilities and their willingness to go to others for help and direction. When these standards are made high in the pre-hire stage, there is much less chance of that pretested employee leaving any time soon.
Increasing employee retention obviously increases ROI.
3. A Guidepost For Employees
Companies that have a "sink or swim" mentality when it comes to hiring and promoting usually also have a "revolving door" when it comes to employee retention. A perceived lack of interest in the employee’s chances for promotion and improvement breed discouragement and burnout very quickly.
But using these same talent analytics, a supervisor can sit down with an employee and help them map out a realistic career path with the company. Using their own information to point an employee in the right direction means preventing that employee from wasting time and money on a career path that is not suitable to their talents, skills, and personality. Employees who feel trapped in a position that is not suitable for them are twice as likely to quit as employees who feel they are on the right career track.
Embracing talent analytics in making hiring and promotion decisions is one investment that can pay for itself rather quickly.
