Everyone loves it when a hundred dollar per hour consultant says to you, “Improve business performance blah blah blah big data blah blah blah decision making blah blah blah improve efficiency by almost 30% blah blah blah workforce competency blah blah blah by hiring the right talent.”
We are so much in love with these fancy words that they have become a part of our vocabulary. A business meeting is unsuccessful unless you throw in words like ROI, data mapping, predictive analytics, etc. These words justify your “hours of research” in this project.
But at the core, do these terms mean anything? Does big data mean anything for human resource management?
The book Big Data: A Revolution that Will Transform How We Live, Work, and Think highlights how organizations are exploiting big data. The primary reason for this behavior is the low cost of data storage and cheap technology.
The only problem with this otherwise perfect plan is that you do not know where should you start.
It starts with hiring the right people for the job. It starts with using analytics in optimizing the recruitment funnel. So, yes, recruitment metrics and big data do play a role in the management of your human resources.
This is a lesson that business owners, entrepreneurs, recruiters, and HR executives should know by now.
“If used in a proper way, talent analytics may help the senior management team of an organization to align HR strategies to value creation.”
Boring academic scholars invested their time in studying what we did not even know existed. They found a correlation between big data and business performance. And their sleepless nights tells us businesses now prefer using their big data bank, analyze it, and improve their performance. As a result, a “data-driven” approach enhances their decision-making models to a strategic outlook across the business.
But the wide-eyed professors did not stop here. They also found that decision-making models supported by data have a direct and positive impact on the business’ performance. Hence, businesses that were using big data for planning were better decision-makers than the businesses which do not.
So, what exactly is the role of big data in making your human resource management easier, better, and smoother? What stands between you and crushing the competition to pieces by exploiting the big data you have access to?
Only one thing – actually understanding where big data fits in your HR practices.
Here's what you will learn
Is big data in business performance new?
There is a new vacancy in the organization. You are excited to finally have someone on the team who will turn the wheel. Someone who is ready to be the wings your business needs to take off. But before you go all berzerk, someone has a brilliant idea to study the data you have about the role to not make the same mistake again.
“Bring me big data and an analyst!”
Okay, you have the data on your computer and an analyst sitting at the table. You start throwing numbers at the analyst and ask him to make sense of them; hoping to make a better decision in filling this vacancy. And…
*wait for it*
He comes up with some recruitment metrics that are offbeat. The numbers are not matching the industry standard. Is the result good enough for you to make a better decision? Will you implement these metrics and start managing them better? Or will you choose to ignore them because nobody knows what best for your business other than you?
Bottom line: What is the reason for this new-found love of organizations for recruitment metrics, big data, and the performance of the business?
By selecting to study recruitment metrics, you are not the first to think about using data on your employees. You might be thinking, “But I am the first guy to say the word talent analytics among all my entrepreneur friends and they were looking at me like a messiah sent from heaven.”
But no. The concept is really old. Businesses have always been trying to analyze data for evidence-based decision making. What’s new about you thinking this way is that now you are moving on from spreadsheets. Now, you can combine various data streams and analyze them to optimize recruitment, human resource management, and retention.
How exactly talent analytics work with business performance?
“Your human talent is your most important talent.”Carla Harris, Wall Street banker, motivational speaker, and author of Expect to Win
Every business runs on ROI. Your employees are your assets. So, how much ROI are they giving and how can you expand the team to maximize the ROI? By taking the guesswork out of the equation and relying on data for measuring ROI in employee engagement & your compensation schemes.
And talent analytics not only work for this but across all levels of the organization – including recruitment. Using recruitment metrics and studying the big data, you can generate the key facts that help business leaders drive strategy development.
This brings us to how talent analytics and recruitment metrics affect business performance. Think about all the great things that your business wants to achieve. Imagine all the accolades that you want the business to be awarded by your country and abroad.
There are many studies that show the effect of talent analytics on business performance but only to an extent. There is no theorem or business principle that mentions clearly how exactly big data affects the performance of an organization.
Why? Well, mainly because it is not viable to track and map individuals against the collective output of the business or the team.
Imagine you are the in-charge of an assembly plant for NewGen Motors. Your job is to make sure the employees are installing all four doors and the hood. There are five stations in the assembly line. You want to predict this week’s productivity on the floor while creating a link between productivity and employee engagement. This will be a problem because no sure way exists which define and quantify the effect of employee engagement on their contribution to productivity.
So, how do recruitment metrics and talent analytics work? The driving force of talent analytics is the techniques generally used in business functions like marketing, finance, etc. Basically, those functions that generate data. Loads of it.
How does talent analytics fit into the HR function?
Akanksha is the HR Business Partner at Vasitum. One of her goals is to help us in identifying a personalized training module for every employee when they join or have to upskill in order to perform their tasks better. Akanksha and her team have been working on this task alongside various activities.
Akanksha is using database management software Vasitum already has to create and maintain the employee database at her company. The software has information of all employees including their primary skills, their designation, standard industrial skills, the project they are involved in, etc.
She thought why not make use of the existing database to deliver the personalized training experience to the employees. This meant using big data for identifying upskill opportunities in the business. Sharing her thoughts, Akanksha says:
“I use the analytics-based dashboards. The segmentation of the information allows me and my team to suggest/develop a personalized training plan for the new employees based on their education and job’s characteristics.”
Additionally, you can use the same formula in your business for new employees or training the existing employees. But the problem here is that there is no sure way of calculating the ROI. Your boss cannot calculate exactly how much she spent on an individual employee against the return she got out of it. But using recruitment metrics and talent analytics, you can collect data on individual employee’s performance against their KPIs. You can use that data to identify the extent of benefit of the training.
Can you use talent analytics in recruitment?
You’ve probably heard about attracting the right talent. Have you had an encounter with terms like the ideal candidate, right candidate, ideal employee? Words differ but they all mean the same – the perfect person for a job. The ideal candidate is the one whose education and skills match the job description and predict that they will perform the job best.
Your mission is to find that ideal candidate. And you have to use analytics and metrics to make sure you are making the right decision.
But is this something completely new? Am I talking about an alien concept, a never attempted before stunt? Definitely not. A lot of businesses are now using data to make better and smart hiring decisions, to make sure that the person is a fit for the job, and to hire the candidate who will be a driver for the organization’s growth.
HR executives use analytics to select the previously dismissed candidate pools. And using analytics is specifically useful when you have to hire for a role that needs a rare skillset. Or maybe you are just trying to hire candidates from the same pool as your top competitors.
Whatever be the case, there is one thing that talent analytics and recruitment metrics do in the recruitment process – remove unconscious bias. Using additional insights, you move beyond the traditional methods of judging a candidate like formal education, previous job role, etc.
Does talent analytics reside with HR?
Before you go all in about metrics and write down the words big data and talent analytics on a piece of paper and bust into the CEO’s room, stop and think. If you are a small business, you might not even have access to the pool of data we talked about in the blog above. So, from where will you build the database and analyze it?
And let us say you have everything. Then what next? Do you have the right? Do you have the legal structure to prevent misuse? Do you have resources in place to throw light on the gray areas about using big data in HR functions?
There is a small gap between collecting data and breaching privacy. One inch further and you can find yourself being sued, dragged to court, penalized thousands of dollars, charged for misconduct, and forced to close shop. Don’t want that, do we?
So, if someone asks you to monitor the content of the email of your employees, you may exercise full control over that. But most businesses will not dare touch them and see it as an intrusive practice. Most employees in your company are now using technology in their everyday life, like wearing a smartwatch, which can also offer you data. But you cannot collect that, can you?
Working with talent analytics means getting access to intricate data. You will have to match data to identify new patterns in the business that did not exist before. So, who will own the process – the HR or the senior management? And honestly, there is no right answer to this question.
While talent analytics will help the senior management to make more informed decisions for business growth, they may still need to be managed by HR. Or maybe you can hire a dedicated talent analytics team whose job is to produce dashboards and analytics output. This way, you can also prevent data sharing. You can even have them collaborate with the HR executives to decide which metrics are evidence-driven and important to improve business performance.
When you use talent analytics and recruitment metrics the right way, you can align your HR strategies with the business goals and drive value creation. The reason why talent analytics work is that it collects and analyzes data at an individual level which you can use to measure and develop a personalized support system for the employees.
Using data from metrics like employee turnover, retention rate, etc., you can implement analytics for solving and uplifting these numbers in the HR function. While there is no strong framework in place that measures the exact effect of talent analytics on value creation, you can evaluate evidence nonetheless.