The Future of HR Technology and People Analytics Has Already Arrived

HR teams everywhere are slow to adjust to the rise of “people analytics,” which are being used to reduce turnover and find better hires. What do companies stand to lose by not investing in this burgeoning branch of analytics?

It’s no secret that today’s advanced data analysis software can uncover highly useful business insights – still, many HR departments have been slow to adopt this technology for their own purposes. Companies that represent the cutting edge of “people analytics” use predictive analytics to learn more about everything from why effective employees quit, to which management practices work best. If used properly, this previously inaccessible data can lead to increased operational efficiency from the top to bottom of an organisation.

But of course, most companies aren’t part of this cutting edge, and some may still be harbouring doubts as to how effective the technology is. But they shouldn’t be concerned: although it is not yet completely mainstream, HR tech is no longer a pipe dream. It is here, it is happening, and it is no longer optional for companies seeking success in the fields of recruitment and people management.

The Key to HR Analytics? Focus

While “people analytics” has been around for some time now, today’s systems bring something new to the table. In the past, data analysis was typically applied to simple performance indicators – for example, a study to determine the ROI of a certain training programme. However, as new tech companies like LinkedIn and Facebook gained more and more users, they found that simply keeping their services operational required serious data expertise.

The tremendous amounts of data generated by these social media companies became incredibly valuable to brands and marketers, fueling a need for data scientists capable of interpreting it. This demand has in turn sparked innovations in the field, both in terms of the technology being used and the ways in which it is applied – including in HR.

For example, the energy conglomerate Black Hills Corp. made extremely effective use of people analytics after doubling its workforce from one to two thousand employees. Many of its existing employees were approaching retirement age, so Black Hills used predictive analytics to forecast turnover and retirement rates before determining how many new employees (and which types of employees) would be needed to keep things running smoothly. The insights gleaned from that analysis yielded a company-wide summit with 89 plans of action for the incoming talent shortage.

The first step in making effective use of the massive swathes of data now available to companies everywhere is to establish clearly what it is you hope to use that information for. If you have particular objectives in mind for your HR analytics programme, it will be much easier to implement an effective people analytics strategy across your organisation.

In fact, it’s likely that people analytics will soon make its way outside of HR and into its own department. The practice yields insights about each and every aspect of a business, from the characteristics of top-performing salespeople, to the workplace factors that motivate excellent employees to quit.

Using Numbers to Find Right-Fit Hires

Perhaps the most obvious use for people analytics, however, is in recruitment. Good hiring protocol does not rely on snap personality judgments or impressive qualifications alone – right-fit hires can be consistently chosen only by way of rigorous evaluation criteria.

Thankfully, HR analytics can help with this. Using technology to bolster your hiring decisions makes it possible for you to make the criteria you’ve defined into an objective, quantifiable standard by which all candidates (and all candidate reviewers) can be assessed.

Human Decisions Are Still Vital

While algorithmic data analysis can provide countless benefits to your organisation, data analysis is useless without humans to first set goals and later turn insights into actionable strategies. With the right tools at their disposal, any HR department can make better decisions about hiring, promotion, and compensation – but tools are ultimately still just tools.

Because many of the most novel developments in this field involve classification of jobs by category and assessment of field-specific performance and job satisfaction, it’s difficult to imagine that people analytics will move away from human-led analysis anytime soon. Only people, not computers, can offer reliable analysis of another individual’s personality, and insights only turn into action because of human decision-making.

Fewer than 20% of global companies today are satisfied with their use of data, and as of 2014 only 4% of HR departments made use of predictive analytics – there is certainly a huge opening for data scientists to further transform the way we do business. Take action today to ensure that your HR department (and the whole of your organisation) is prepared for the still-growing influence of Big Data and analytics.

Picture of Harver Team
Harver Team
Updated on:
May 9, 2023

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