Sunday, July 26, 2020

Power of Big Data & HR Analytics and it’s key benefits to the organization.

Power of HR Analytics & Big Data and it's benefits

HR analytics is a methodology of deciphering data for creating insights on how investments in human capital assets contribute to the success of four principal outcomes:

(a) generating revenue

(b) minimizing expenses

(c) mitigating risks

(d) executing strategic plans

This is done by applying statistical methods to integrated HR, talent management, financial, and operational data.

The two most recent and major fields of study and implementation for Human Resources have been, The Big Data, and HR Analytics. The power of HR Analytics and Big Data has made companies make more informed decisions. Companies so far had largely been dependent on “intuitions” based decision making as a trend. With the advent of HR analytics, the official decisions have become more promising and accurate across the board, worldwide. 

This is the most important reason for companies which are investing millions and billions into talent management software and hiring subject matter experts including data scientists, key statisticians, and data analysts.

Now let's spend some time to understand what HR analytics and Big Data really mean. When an organization maintains a record of all its prospective candidates and present & past employees, it means that the HR function has any time excess of that data, making it easier to manage people and processes and get a better return on investment on employees. Employee Hiring these days is also based on the inputs through HR Analytics.

As organizations are realizing that employees are the central bodies of their business, it is the HR department that takes care of every aspect of these bodies. In that way, the HR function becomes the central point for collecting and processing the data regarding employee information, hiring requirements, salaries, promotions, attrition, etc. But HR analytics does not just deal with gathering data on employee efficiency. Instead, it aims to provide insight into each process by analyzing data and then implementing it to take relevant steps to improve these processes.

There are various aspects of the workplace where HR analytics and Big Data can be useful:
  1. Talent Acquisition
  2. Training and Induction
  3. Performance Review
  4. Compensation
  5. Rewards and Benefits
  6. Retention
  7. Employer Branding

This useful data could be all over the place and be worthless in the absence of a proper HR analytics tool. This is why a desirable HR analytics tool could use HR and big data analytics to interpret this useful data and transform it into useful statistics. Once observable patterns are depicted, HR can decide what to do with it based on the observations. Analytics are used to examine the effects of HR metrics on organizational performance. In general terms, analytics look for patterns in the metrics.

For example, using the HR Analytics, organizations can find out if the high potential employees are leaving more often and can use this data to ponder over ways of retaining and engaging these Hi-pots.

By using analytics, organizations and their management can become predictive over time. In other words, you can use the data you may already have to discover answers to questions like which of my top performers are at risk for leaving the organization in a few quarters, or distinguish which HR initiatives like job enrichment, onshore project or long term incentives will defer the decision of employees leaving your organization.

Here are 8 benefits of HR analytics:

1. Data-driven recruitment decisions

HR analytics helps HR and Line managers to make better choices based on historical data. A great HR analytics tool can make a difference by enabling HR to easily derive the best candidates to hire from the historical data.

For example,­ if you hired 10 candidates and 4 out of them belonging to a particular background couldn't qualify beyond a level, perhaps you will not hire someone from a similar background again. HR analytics prevents you from making such mistakes. Moreover, it also allows the recruiter to learn more about candidates through online databases, applications, social media profiles, job portals, records, etc.

2. Reduced Talent Scarcity

Data-driven recruiting strategies provide insight to build a larger pipeline. With the help of HR Analytics, it is easier to target potential candidates for a particular position arising in the company. It is easier to understand the type of talent required, the knowledge required along with other important aspects that might be missed in a regular talent acquisition process. When the required talent is scarce for a specific industry or a job role, HR Analytics helps in identifying a Plan B for the next best talent which can be groomed into the role.

3. Process Improvement

Once the company has enough data to provide to the experts to come up with accurate statistics and patterns, the company can then use it to make the hiring process fast and efficient. Hiring managers will know which positions in the company require what type of talent, people, background & experience, along with the type of people that will not be suitable. Then it becomes much more streamlined to target a specific talent pool and get the much faster conversion for the pipeline of candidates. Organizations are realizing they need to embrace a data-driven culture to compete with others and attract top talent.

4. Improved Process Training

Training is a necessary requirement for any organization. Gaps in the training process can increase the job errors leading to unwanted issues. In the present time, most enterprises have started investing in good HR analytics and utilizing the collected data and patterns to design their training programs. This method also helps the organization identify if employees are making full use of the opportunities and knowledge imparted to them during training programs.

5. Better Insights about performance

HR analytics also help the company look at the employee's professional life by tracking, sharing, and analyzing performance-related data. This is the reason why companies track and record the behavior of their employees with customers and co-workers regularly. This employee's performance data is also used by the hiring manager to identify great talents during Internal Job postings as well as for promotions. This data not only provides more insights about the employees but also shapes the strategies to boost employee morale, retention, and engagement.

6. Controlling Attrition

When it comes to retention, HR analytics is an important tool to identify the retention rate of employees. It tells the company about the major reasons why employees leave and why they stay. There could be a variety of reasons ranging from under-performance, compensation, lack of skills to anything else. HR analytics could also be helpful in finding the gap areas where employees are finding difficulty in meeting goals and targets. HR can use various methods like employee surveys, team assessments, exit as well as on-stay interviews to find out the reason for attrition and map out strategies to retain them.

7. Improved Employee Experience

Once your recruitment process becomes swift, it automatically gives a good impression to candidates you want to attract to your organization. HR Analytics methodology in turn helps in employer branding too. It makes the recruitment process faster and the candidates don't have to wait endlessly to know whether they are rejected or shortlisted. This gives them a better candidate experience and improves the brand image simultaneously which gives your enterprise an edge over your competitors.

8. More Productive Workforce

Since enterprises have a grip on the kind of people to hire for a job, it becomes easier to expect better performance and productivity from employees. With analytics, you get an understanding of the workforce and hence know what kind of environment, policies, and teams will make them work hard and give you results that you expect from them.

The Future of HR Analytics & Big Data

Many renowned as well as few lesser-known organizations have actively started using Big Data and HR analytics and have been reaping the benefits of the same. Cognizant, HCL, Deloitte, Google, to name a few have been consistently making use of HR Analytics as a daily practice.

We’re experiencing huge changes in the HR landscape. Data analysis has taken over as a necessary tool to move beyond intuitions and gut feeling, but it comes with its own challenges. Once consensus is gained by removing peoples' apprehensions to move beyond traditional ways, then human resource management solutions will need to be chosen wisely to ensure goals are met.

Prior to Machine Learning, organizations used to manage data in manual and semi-automated ways. It would gather, store, analyze and process data to produce statistics before the data became irrelevant and needed updating at regular intervals. Moreover, there was a huge wastage of useful data that could help enhance the organization’s performance if stored and assessed properly. No data was being used and reused for multiple reasons and solutions, until now.

With machine learning, we can understand patterns in Big Data and accelerate business through automation. Resume parsing, for example, fast-tracks the screening process by identifying the candidates with the apt skills and education with existing data. Artificial intelligence also helps eliminate human error while performing repetitive tasks. Other concepts allow matching skills and qualifications of job seekers to provide a list of recommended jobs and creating relevant personalized learning opportunities based on individual learning history, goals, and preferences.

While HR analytics and Big Data has been a game-changer for many years, these new possibilities promise a plethora of potential from data insights.

HR analytics offers some undoubted benefits. It allows HR teams to significantly streamline processes that reduce costs, reduce attrition, and consequently improve the bottom line.

With task automation, you are freed up to innovate and explore the human aspect of human resources without spending time on tracking mountains of data from multiple sources.

Overall, the use of HR analytics has been established as an HR technology trend, as it is posed to improve the employee experience that directly translates into improved business outcomes.