The Role of Big Data in HR

With the job market becoming more candidate-driven, HR professionals are having a hard time filling open positions with quality talent. This is because recruiting in a candidate-driven market generally requires more time and is often more costly. According to the 2016 Glassdoor eBook, “50 HR and Recruiting Stats That Make You Think,” the average amount of money companies spend filling an open position in the United States is $4,000. Additionally, it takes recruiters an average of 52 days to fill an open position.

Because of changes in the market, hiring managers and recruiters have little choice but to adapt and rethink traditional talent acquisition methods in order to remain competitive. One of these new methods is to implement big data into the recruiting and hiring process.

According to a 2013 report by Dynistics, a recruitment business intelligence software company, approximately 30% of recruitment professionals are not taking full advantage of big data. According to the company, recruiters who implement big data are twice as likely to improve their recruiting processes and three times as likely to reduce the amount of time and money it takes to fill an open position.

In addition, according to a 2013 study of more than 1,200 businesses by independent business analytics vendor SAS, the use of big data throughout business industries will continue to increase well into the next decade. The report found that larger organizations – those with at least 100 employees – are more likely to implement big data analytics, and that by 2017, the industry could expect to see a 243% increase in big data specialists.

Advantages of Big Data Recruiting

The lack of credible data doesn’t have to be a source of frustration for HR recruiters. Specific to the HR industry, big data has been shown to help with real-time prediction of hiring needs, improving the quality and retention of new employees and connecting recruiting performance with business performance. Here is a more detailed explanation of some of the advantages of data-driven recruitment.

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Increase Quality of New Hires

Hiring the wrong people can have serious consequences for companies. According to a 2013 survey by CareerBuilder of more than 6,000 HR professionals, 27% of U.S. employers stated that one poor hire cost the company more than $50,000. With the introduction of big data into the recruitment process, costly hiring mistakes can be avoided.

Big data allows recruiters to be more analytical and strategic when it comes to finding the ideal candidate. With access to online resume databases, employment records, social media profiles, applications, tests and other data, recruiters are able to compile and identify potential candidates by sorting the information and narrowing down the talent pool.

Improve Training and Employee Success Rate

Recruiting is not the only costly part of the hiring process. Training can be just as expensive, and it can be a waste of money if overall employee retention is unsatisfactory. The 2014 State of the Industry report by the Association for Talent Development found that employee training and development costs businesses an average of $1,208 per employee.

Big data lets businesses measure the potential effectiveness of a particular training initiative so they can make sure they are making wise investments when it comes to the training and development of their employees. Conducting frequent performance evaluations can also help HR professionals better understand the effectiveness of their employee development efforts.

Increase Employee Engagement and Retention

According to Business News Daily, organizations have found that tracking, analyzing and then sharing performance metrics with employees can be very beneficial. According to Jason Palmer, president of vehicle safety and efficiency at SmartDrive, big data is able to analyze real-time information, condense it into performance data and provide insights based on that data to help employees execute their job better.

According to the Business News Daily article, Palmer saw an increase in motivation and company retention at his company after providing employees with actionable data to better themselves in the workplace.

With big data, employers are able to analyze the reasons behind poor morale and low employee retention rates. Tools like social media, exit interviews, team assessments and employee satisfaction surveys give HR professionals the information to predict and help prevent future decreases in employee satisfaction and effectiveness.

HR Big Data Trends

Neither big data nor technology will ever fully take the place of a skilled HR professional, but both can help better inform decision making and increase productivity. According to a 2016 article by Talent Culture, there are several big data trends expected to impact the HR industry in the next couple years.

• Vanity metrics are going away – Vanity metrics are statistics that look good on paper, but offer little insight. When it comes to data, quality is much more important than quantity, and the application of metrics is also growing in importance. As companies implement data analytics and train their employees to use these new programs, they are mostly focusing on the strategic use of the data they are collecting.

• Smarter predictive analytics – As a whole, predictive analytics can be a useful tool for a business. Predictive analytics can provide a forecast of trends in the industry, as well as provide insights into employee benefits, talent management and promotions. For example, businesses can use predictive analytics to measure the effectiveness of employee training activities and identify which employees are more likely to hit their target goals and why.

• Data can put value on human capital – Businesses often claim that human capital is one of their most important assets; however, many companies struggle to back up that statement with data. With data analytics, companies are able to assign financial value to the individual tasks that keep the business running so they can better understand the financial impact of every employee working for the organization.

• Analytics tools are becoming simpler and more affordable – One thing that has held some companies back from fully adopting data analytics is the lack of affordability and the complexity of programs that are available. However, as the popularity of business intelligence and big data continues to grow, so too will the number of options for businesses looking to implement data analytics.

• Collecting data with sensors offers a new perspective – HR professionals are beginning to discover the power of sensor-driven data. Online listening platforms and internal monitoring systems are a few ways businesses can collect data via sensors. Sensors can help HR departments monitor worker safety and regulate HR compliance policies.

• Data analysts are in high demand – According to an article by CNBC, data analyst is the sexiest job of the 21st century, and jobs in the field are in high demand. A skilled data analyst, sometimes referred to as a data scientist, analyzes data and produces actionable reports. If organizations want to meet their analytics needs, they will need to get creative during their search for this kind of talent.