You may know how Big Data is impacting marketing, but lesser-known – yet extremely important – is how you can leverage Big Data to dramatically improve HR practices.
Many of the costly hiring, staffing, and retention problems you face virtually every day can be solved through the smart use of Big Data. In this primer, we show you the best ways to use Big Data in your company’s HR practices.
Digital transformation is taking place in all business areas, driven in part by the explosion in big data. By leveraging big data in human resources (HR), companies can improve their performance in almost every area. From recruitment to training, career development, compensation, and incentives, big data can help HR practitioners and the owners of any size business make better decisions and meet goals faster and more cost-effectively.
Here are some ways you can use big data in HR to benefit your business.
Manage the Employee Experience (EX)
Managing your employees’ experience has never been more critical. According to Forrester Research’s 2022 predictions, EX is one of the primary HR trends we expect to see more of this year. Companies are taking the same approach to EX as they do to customer experience, and big data can help create intentional experiences with outcomes in mind.
For example, HR datasets based on anonymous surveys offer insights such as the percentage of employees who are happy with their work environment, common problems, and suggested changes to conditions. Data and analytics can help HR leaders decide which key areas of the EX to invest in and connect the results to sales and productivity information.
Identify Talented Employees
Big data analytics can help you identify and nurture potential leaders for your organization.
According to this study by McKinsey & Company, 5 percent of the people in an organization deliver 95 percent of the value.
Use big data in HR to identify high-performing and high-potential individuals and uncover leadership abilities and potential gaps to address.
Armed with this knowledge, you can create career opportunities for your top employees, develop succession plans for key positions, and identify future business leaders to fast-track for promotion.
Enhance Employee Engagement
Big data analytics help employers visualize the connection between their workers’ daily activities and organizational goals.
By analyzing trends in employee behavior, such as how well individuals get along with colleagues and customers, you can identify and address problems that impact performance and improve the results.
For example, BestBuy discovered that increasing employee engagement in one store by one-tenth of one percent generated more than $100,000 extra operating income. Other studies show companies that prioritize engagement can see up to 20 percent improvement in their sales results.
Make Better Recruitment Decisions
When you’re recruiting a new employee, you want candidates with both the necessary skills and the right attributes to match your company’s culture. Analytics pulled from HR data can help you to:
- Sort through multiple applications in a record amount of time, based on key terms and job requirements,
- Identify those applicants who have characteristics comparable with your top-performing employees,
- Avoid any unconscious bias (on your or your hiring manager’s part) and ensure equal opportunity regardless of background factors using proven employee assessments that will dramatically improve your odds of hiring the right person,
- Generate stats on how long it takes to find suitable people for different roles in the company so that you can be better prepared in the future, and
- Tailor your hiring to address any skills gaps by analyzing and comparing the data on current employees and potential candidates.
By applying big data and analytics to the recruitment process, you can cut down on hiring times and reduce costs.
You can also predict when a good candidate is likely to drop out of the hiring process, enabling you to intervene in time and stay ahead of the current high competition for talent.
Pinpoint Skills Gaps
As the world changes and digital transformation takes over almost every aspect of business, business owners have to live with the staffing decisions they (or their HR managers) made in the past. That could mean keeping employees who aren’t up to speed with technology or have other gaps in their knowledge.
The reskilling of staff has become a new priority for companies aiming to adapt to the fast-changing economy. According to McKinsey & Company, 87 percent of organizations realized they already have significant skills gaps or will have in a few years. Detect the skills gap in your business by:
- Outlining your company objectives, so you can identify the skills you need in-house,
- Breaking down the list of skills required into individual functions or jobs and ranking them according to their importance,
- Discovering what skills your collective employees already have and using HR data to identify the qualifications they hold,
- Asking staff to complete surveys and take part in assessments to discover their abilities, and
- Evaluate customer feedback to see if you identify any gaps.
For additional evaluation insights, check out this article on the Administrate blog.
Big Data, predictive modeling, and artificial intelligence use unstructured data collection methods to gather information about employee skills, identify gaps, ensure workers are in the right roles, and guide their career paths. By defining skills gaps and development opportunities, you can plan effective training initiatives for staff engagement and retention.
For example, one company used productivity and employee feedback data to understand how managers’ leadership styles affected productivity. These insights helped them identify preferred managerial behaviors and develop and improve managers’ skills.
Track Retention Trends
In these days of the Great Resignation, big data can help you track retention trends to predict when you’re likely to lose top employees and find ways to prevent this.
By using data from employee reviews, promotions, pay histories, and resignation dates, HR can determine which employees are likely to quit and when. Proactively offering them training, better compensation, or new growth opportunities can help you keep them loyal to your company.
Good retention reduces the cost of onboarding new employees. It also improves productivity, because the longer a worker is with a company, the better their understanding of processes and the faster, more accurately they can carry out tasks.
Big data has changed the way the world does business, and it’s not going away anytime soon. If you don’t yet have a strategy for collecting HR data and applying it to benefit your organization, prioritizing this will help prepare you for the digital future.
Put Big Data and Science To Work in Your Hiring and Training
We offer a wide range of proven, validated assessments that help you find new employees like your current top performers. Equally important, we also offer assessments that will help you avoid hiring people who don’t work out and have to be replaced six months later.