5 Things that HR Predictive Analytics will Actually Predict

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IT analytics , 3D backgroundBig data will move HR from darkness into the light…

Big data is big news in HR and talent management. We hear a lot about how big data is set to transform the world of HR; how it will move us from darkness into light. But, data has been around for many years in HR, so what’s all the excitement about now, suddenly?

Well, traditional HR analytics has been very much focused on the present, that is, items such as turnover, cost per hire, but predictive analytics, such as is hitting the headlines today, seek to look into the future and answer questions like, “What will turnover be like in 3 years?” and, “What should we do today to manage that predicted turnover to ensure future competitiveness in the talent war? Yes, HR predictive analytics is boldly going where no HR person has been before.

So, why is the demand for predictive analytics in HR increasing or set to increase? Well, there are many reasons for why predictive analytics is so high profile now, but there are three profound changes that have really created a hunger for predictive analytics and these are:

  1. Significant increases in computing power and its affordability
  2. Massive increase in digitalized HR data that can be accessed via the cloud for processing
  3. Global talent war that is sending company’s talent strategy into turmoil and threatening the long term integrity of inward talent streams

Predictive analytics is part of an HR big data wave that is sweeping the world in many disciplines such as sales and marketing, and the HR profession is being swept along. In fact, as executive teams becoming increasingly engaged in the language of big data and predictive analytics, if HR wants to remain commercially relevant, it needs to be tuned into the HR big data debate, and be able to provide senior executives with a predictive analytics based justification for its key talent related decisions.

But, even as I read about HR predictive analytics in the press, I still find it is a little intangible and I find it a little hard to grasp exactly how it can help HR and what specific questions it can actually answer. So, I have looked at some examples of how predictive analytics has been applied in other fields, such as customer management, and transferred this to the HR arena to give some kind of idea of how HR predictive analytics can/may actually help your HR function.

1. Turnover modeling. It may be able to predict future turnover in your business in specific functions, business units, geographies and countries by looking at factors such as commute time, time since last role change, and performance over time. This means you can scale your hiring efforts accordingly, reducing empty desk time and panic hiring, which can lead to lower cost, higher quality hiring.

2. Recruitment advertising measurement. Response modeling for advertising jobs. You can use your experience from previous campaigns to avoid contacting candidates or using channels that don’t yield a response and focus on those channels that do work.

3. Targeted retention. Find out which employees or groups of employees are at high risk of churn in the future and focus retention activities on those who are more in need and reduce it in other areas where it is not needed as much.

4. Risk Management: develop a profile of candidates with a higher risk of leaving prematurely or performing below standard.

5. Talent Forecasting. Being able to predict which new hires, based on their profile, are likely to be high fliers and then moving them in to your high potential programs.

I am not attempting to answer the entire predictive analytics HR question in such a short article, but really wanted to bring the HR big data discussion down from the clouds and into reality, just to get people thinking and to open the discussion as to exactly what questions HR predictive analytics can help us to answer.

By Kazim Ladimeji