In the world of today, the growth and success of business are complex matters. These long ago moved beyond the simple task of offering a good product or service, and began to encompass other direct factors such as sales strategies and competition, along with indirect factors like social consciousness. Only relatively recently, though, has there been the realization that the most impact on business growth comes from ensuring that the right people are successfully recruited, rewarded and retained.
Statistics bear this out. A survey in Australia suggested that 40% of companies find it difficult to source employees with the right skills and experience, pointing to a talent shortage that is seen in other places across the world too. The 2017 Global Human Capital Trends Report from Deloitte revealed some interesting points:
- 76% of respondents in the US suggested that people analytics was important or very important
- 67% of respondents in Europe too felt the same
- An important point to note is that the sample included small companies, for whom this is commonly believed to be less important
People analytics, also known as workforce analytics, is a lot more than managing expenses through insights into payroll. Organizations use a large number of applications that put out huge volumes of data, which can give critical insights that talent management professionals can use to proactively take better informed decisions. Such analytics helps to quantify parameters such as emotions, interactions, culture, decisions and more.
Implications for human resources
Workforce analytics can impact the work of HR leaders in a number of ways, as explained below:
- Strategic focus: The people management practice becomes a lot more strategy-driven when bolstered with the right analytical input. Hiring, evaluation, promotion and other aspects can all be suitably tweaked to improve business outcomes.
- Quality of data is important: Often notorious for its quality, the data from talent management professionals becomes critical now, as it serves as the base for action and decision-making. Better systems with lower error risks must be designed.
- Data-driven mindsets are needed: HR leaders need to focus more on data, rather than just inputs from operational managers. This can help to identify people problems and put solutions in place, accordingly.
- Beliefs must change: Data-driven insights can often bust some long-held beliefs. For instance, hiring managers often tend to believe rehiring employees who had left the company would be beneficial, as such employees require shorter onboarding times and are familiar with the work. However, people analytics could reveal the reasons behind their previous exits and thus predict whether their second or subsequent stints would be beneficial or not.
- Different tools must be used: Every step of the journey of an employee can now be analyzed and accordingly optimized. This will need a measurement of how talent is attracted and managed, which affects the deployment of HR tools.
Aspects of talent management that can benefit
Clearly, people analytics is key to successfully managing human resources. The impact can be seen on the following aspects of talent management:
- Acquisition: Traditional applicant tracking systems do not have the advantages of comprehensive data, algorithms and keywords that workforce analytics has at its disposal. Background checks of prospective hires, for instance, could also include an analysis of their social media activity, for more comprehensive profiles. Analytics will also point to talent sourcing channels that offer the highest success and returns.
- Nurturing: Identifying top performers becomes easier, and organizations also get to know specific skills that need to be improved for certain employees. This could in turn be used to plan training requirements and also predict the likelihood of employees looking to switch jobs by picking up relevant traits.
- Retention: Data from external sources, along with on-the-job performance, years of service, and other relevant inputs could help to minimize anomalies and suggest a fair compensation level. Analysis of pre-hiring behavior can also be used to avoid candidates who could be problematic.