HR Analytics – Don’t rely on your gut



By Martin Conboy

HR-Banner2We all know how important hiring the right person can be, yet so many hiring managers rely on “gut instinct” to decide who will join their organisation. The cost of a mis-hire can be significant. It has been estimated to be at least 3.5 times the cost of the employees’ salary – (including the cost of recruitment, decreased performance and lost opportunity, to say nothing of the cost of getting the new hire up to speed). There must be a better way.

Talent acquisition and management is the single most important challenge facing the BPO services industry.  As the industry

Talent acquisition and management is the single most important challenge facing the BPO services industry.

grows and the BPO and outsourcing value proposition shifts from cost-reduction to innovation and strategic outcomes, the pressure to improve recruitment processes and capabilities mount.

Manish Sharma, Senior Managing Director for Accenture BPO Global Delivery, “…the most important challenge for the BPO industry will be people – recruiting, motivating, recognising, rewarding, and developing talent will be the overriding challenge for the BPO industry. People are the only sustainable, long-term source of competitive advantage – for providers as well as buyers.”

Imagine having the ability to accurately identify all your HR requirements now and into the future, thereby greatly reducing the possibility of a mis-hire. Human resources analytics can provide organisations with insights for effectively managing employees and recruitment in line with the goals and objectives with the business.

The challenge is the data. What data should be captured? How to use the data to model and predict the capabilities required by the organisation? Based on past data and metrics which hires have proven to be the most effective and why?

Most organisations have enough data to make analytics useful, though frequently the data is often created and stored in multiple places in multiple formats. There are plenty of BI (Business Intelligence) and analytic tools out on the market to collate and analyse the data.

HR analytics skills

What’s lacking are the analytic skills and methodologies within HR to properly analyse the data and create forecasting models.

Data analytics, particularly in HR, requires a combination of skillsets consisting of IT and Social Science – IT to mine the data, collect and warehouse the data, and to visualise the data.  Social Science professionals to understand and explain statistics and

A key purpose behind HR analytics is to highlight the impact HR has on the organisation as a whole.

the behaviour and the psychology – the human elements of the data.

Karen O’Leonard and Josh Bersin, Bersin by Deloitte, Deloitte Consulting LLP, published extensive research on HR analytics towards the end of 2013. “Our research shows that organisations with sophisticated talent analytics functions see improvements in recruiting, leadership pipelines and talent mobility,” said Karen O’Leonard, lead analyst,. “Building capability in this area has become a critical priority for business and HR leaders; and will likely differentiate high-performing organisations in the future.”

How HR impacts the rest of the organisation

A key purpose behind HR analytics is to highlight the impact HR has on the organisation as a whole. It’s about identifying a cause-and-effect relationship between what HR does and the business outcomes it generates.

Analytics can be applied to all HR functions including, hiring, pay and benefits, training and workforce develop. It can be used to identify problems and issues surrounding these requirements and build statistical models that to guide managers in making the relevant decisions.
February 16, 2015

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