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Can big data help HR to recruit top talent?

Posted by: Jimmy Bower


The world of work is changing rapidly. With technology increasing and loyalty decreasing, managers and HR departments need to re-think their recruitment strategy. Business leaders are beginning to embrace a much more data-driven approach to identifying talent by enlisting the help of analytical and scientific processes.

Think about your current hiring processes; are the majority of decisions based on a “gut feeling” or a first impression? Do you immediately like the person and then find yourself trying to enforce that original feeling throughout the interview? Data driven strategies attempt to avoid these subjective view points by finding valuable staff that otherwise would have been missed based on these “gut feelings”. According to the US based performance management consultancy, Gallup, when companies select from the top 20% most talented candidates for a role they typically see a 10% increase in productivity, a 20% increase in sales, a 30% increase in profitability, a 10% decrease in staff turnover and a 25% decrease in absence.

But only 14% of companies across the world have conducted any kind of statistical analysis of employee data. Cynthia Tan, retired Group Head of HR at Oversea-Chinese Banking Corporation LTD (OCBC) in Singapore, refers to people analytics as “the use of data and analytical methods to provide insights for more evidence-based decisions about people, relationships, processes and their impact on an organisation.” Tan suggests that one of the reasons so few companies use analysis may be down to an analytical skills gap within the HR industry and this suggestion has been backed up by a Harvard Business Review study, which highlighted analytical skills to be amongst the top barriers in the adoption of people analytics within companies.

Tan decided to enlist the help of the customer analytics team within OCBC, who coached her HR team in analytics workflow and the modelling process. This partnership allowed her team to begin its journey into analytics by using expertise from outside of her department, whilst still inside the bank. However, this approach may not be as easy for a much smaller company who do not have an pre-made analytics department. Further, if a company has not been investing in HR technology or taking the time to record and build data sets to work from, the data could be incomplete and unlikely to be rich enough to build an analytics function around.

It has been argued that this data-driven scientific approach towards a hiring strategy is now vital to long-term hiring success. It doesn’t just tell you about your current staff, it uses predictive analytics to help HR build and qualify a pipeline of candidates. With big data identifying and targeting areas such as desired traits, geographical location and previous successful employees the hiring process doesn’t have to be hit and miss or a bit of luck. Even small companies can begin using this process by looking at simple information regarding your current staff, such as how you came across the candidate (helps you identify the strongest sources for top talent), geographical placement of candidates (allows you to hone in on those areas) and the job categories employees they identify themselves with (what areas, job titles and helping you understand more about your potential candidates).

Big data can also be used to predict employee behaviour such as any emerging trends, reactions to economic demands and what skill sets are lacking. With enough data, it can used to measure employee longevity, aid succession planning and predict when to expect employee churn allowing you to either prevent it or plan for it. Collected right, your data can tell you what keeps your employees motivated, engaged and loyal and also why they may not any of those things. Begin engagement surveys, conduct exit and stay interviews, if your company works with lots of teams perform team assessments and get 360 feedback. This data can help you identify key traits of your top performers, meaning you can make better informed decisions, including future hires.

Xerox is just one of the companies that has been analysing personal data to determine the fate of job candidates and attempting to take the hiring decision away from the interviewer and into the hands of an algorithm instead. Xerox’s analysis has found some surprising results, including the revelation that employees with more than 2 social media accounts tend to stay in a company for a lot shorter period of time than those with 2 or less accounts, and that prior experience in a similar position did not always equal success. This did two things; stopped Xerox hiring at gaming events and allowed candidates who wouldn’t have been considered based on their CV, a chance at the job.

It goes without saying that talented workers are well worth the effort it takes to hire them. Investing the time and money into hiring right will pay off in the long term, as every manager knows the cost of a bad hire as well as the results of a good one. It is likely that future HR has analytics as part of its core, so with the skills gap in mind, we need to ask should HR departments by educated to become analysts or should we be hiring analysts that understand HR? It is possible that HR departments will arrive at a point where crunching data replaces the human touch of job interviews. However, this may only be effective for companies or departments that require high volume such as call centres; it would be difficult to rely purely on data for senior level candidates because there are not as many hires so the pool of data would be much smaller. However it could be argued that if a long term project, the data collected on senior hires would become statically valid. But it can’t be denied that the potential to use big data to draw conclusions and make better decisions is much greater than it’s ever been.

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