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StrategyDriven Organizational Performance Measures Article

Predictive Analytics Tools Can Create a Better Workforce

Understanding What Predictive Analytics Is

Predictive analytics (PA) is well known in many business arenas but has never entered Human Resources until recently. PA is a form of technology that learns from other existing data. This process results in predictive results. It is most frequently used to predict very specific individual behaviors in Human Resources.

Predictive analytics examines data or content to answer the question “What is likely to happen?’’ This is important in any business area but is critical to Human Resources who previously depended on intuition to determine future needs of both the company and employees.

With the support of predictive analytics, it’s no longer necessary to make decisions because of intuitive feelings, or ‘’gut’’ reactions to some issue or plan. Data is gathered, analyzed and presented quickly, without stumbling or bumbling on the data or statistics. Intuition or ‘’gut’’ feelings are often unsuccessful, while data mining information that predicts uncertain outcomes is much more reliable and trustworthy.

How Predictive Analytics Affects Recruiting

Applying predictive analytics in Recruiting and Staffing helps companies foresee and enhance several areas, including:

  • Potential top talent is easier to identify with predictive analytics. This makes a recruiter’s job much easier and accurate. Predictive analytics can easily identify the candidates with the most potential, better understand when these talents can be contacted and understand if and why a job opening may be attractive to candidates.
  • Predictive analytics helps companies optimize the responses to their job openings. The analysis can help companies understand how duration, location, occupation and industry will likely affect recruiting results.

Why Companies Utilize Predictive Analytics in HR

73% of companies surveyed said the primary reason they used analytical data was to make the workforce planning process more efficient. 69% believe the main reason to utilize predictive analytics is to more accurately plan for the future and also, create plans to eliminate skills gaps in their organizations. 65% of companies credit predictive analytics as identifying high potential employees.

Other companies indicated that predictive analytics provided better analysis of company needs to align people and company strategy; while others indicated that analysis provided the needed links between performance and compensation; the remaining companies surveyed stated that predictive analytics provided more in-depth knowledge of external talent pools.

Predictive Analytics Helps HR Look Forward

HR has historically been responsible for forecasting the right amount of talent and knowing when to hire additional talent. Unfortunately, before predictive analytics was utilized in HR, the forecasting was more backward-looking than forward. For example, one or more employees terminate, and HR suddenly decides there is talent disproportion.

Unfortunately, few companies have implemented predictive analytics for their HR groups. According to Deloitte, in 2015, only about 8% of global organizations have adopted PA for their Human Resources groups.

The few companies that utilize predictive analytics have had great success and freely share their efforts and results. For example:

  • Google: This company is a strong advocate of statistics and freely admits that it is the most critical tool in their Human Resources group. All interview questions in their hiring process are computerized and perfected to ensure that the best candidates are hired. Additionally, Google’s predictive analysis can estimate the likelihood of future terminations, why they are terminating, and what could have been done to circumvent the termination.
  • Hewlett Packard (HP): HP is also a leader in the HR predictive analytics arena. Recently, HP shared with news media that ‘’when their attrition rates started moving upwards, they utilized predictive analytics to predict which employees were likely to leave by developing a ‘Flight Risk’ score.” This analysis was able to define both the ‘who’ and ‘why’ of their 300,000+ employees who would potentially terminate. For example, higher pay, promotions and better performance ratings were negatively related to flight risk, but the analysis proved that there were strong relationships between these findings. For instance, they were able to analyze that a promotion without a substantial pay increase would likely result in a termination.

“HP’s Flight Risk scores helped managers make better decisions since the early warning signal from Flight Risk allowed time for managers to intervene or if the loss was unavoidable, it prepped the manager to react accordingly. The predictive analysis in Flight Risk allowed HP to save an estimated $300 million.”

The extensive time previously spent on creating charts, reports, quotients, etc., will soon be history because predictive analytics easily allows organizations to analyze the past and predict upcoming trends for both positive and negative analytics.

The end result of having predictive analytics in Human Resources is the ability to predict future needs that are accurate and verifiable. This becomes the organization value to business that Human Resources has long struggled to create. HR has for years attempted to get the infamous ‘’seat at the table’’ and predictive analytics will ensure this happens.

Human Feedback is the Greatest Path to Efficiency

Feedback, at its core, is simply information about the results of past action that can improve the results of future actions. An airplane’s navigation system, the thermostat in your home’s heating unit, and a flashing electronic sign that displays your car’s speed are all examples of feedback that drives improvement. The plane adjusts its course, the heat turns off in the warm afternoon, and you slow down to the speed limit. Each time an adjustment is made, a ‘feedback loop’ is completed.

It’s not happening in the workplace
This is so not the way information flows between human beings in the workplace. Although employees receive massive amounts of information via electronic sources, feedback from their boss – information that could help them improve performance – dribbles in at a very slow pace or not at all.

Why is this?


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About the Author

Anna Carroll, MSSW, is an organization development consultant, facilitator, coach, and speaker. She designs and leads training and group planning experiences and creates learning tools and assessments to speed up group success. Most recently, Anna has focused on how leaders and team members can overcome their barriers to exchanging valuable feedback in the workplace. Her book, The Feedback Imperative: How to Give Everyday Feedback to Speed Up Your Team’s Success, was published in July 2014 by River Grove Press.

Want to learn more? Visit Anna’s website: www.EverydayFeedback.com or contact her by email at [email protected].

StrategyDriven Podcast Special Edition 45 – An Interview with Sharon Armstrong, author of The Essential Performance Review Handbook

StrategyDriven Podcasts focus on the tools and techniques executives and managers can use to improve their organization’s alignment and accountability to ultimately achieve superior results. These podcasts elaborate on the best practice and warning flag articles on the StrategyDriven website.

Special Edition 45 – An Interview with Sharon Armstrong, author of The Essential Performance Review Handbook explores how to conduct personnel performance reviews that are a positive experience for employees and that helps them and the organization excel. During our discussion, Sharon Armstrong, author of The Essential Performance Review Handbook: A Quick and Handy Resource For Any Manager or HR Professional and Founder of Sharon Armstrong and Associates, shares with us her insights and illustrative examples regarding:

  • what is at the heart of manager and employee anxiety over personnel performance reviews
  • why some managers and employees approach the performance review process with a high degree of cynicism
  • key principles and methods managers and employees should practice when preparing, executing, and following-up on performance reviews
  • the most effective periodicity for conducting performance reviews
  • how executives and managers can ensure performance ratings are consistently defined and applied

Additional Information

In addition to the outstanding insights Sharon shares in The Essential Performance Review Handbook and this special edition podcast are the resources accessible from her websites, www.SharonArmstrongAndAssociates.com and www.TheEssentialPerformanceReviewHandbook.com.   Sharon’s book, The Essential Performance Review Handbook, can be purchased by clicking here.

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About the Author
 
Sharon Armstrong, author of The Essential Performance Review Handbook and The Essential HR Handbook, is the Founder of Sharon Armstrong and Associates. Sharon has served as director of human resources at a law firm and several other organizations in Washington, DC. Since launching her own consulting business in 1998, she has provided training and completed HR projects dealing with performance management design and implementation for a wide variety of clients. To read Sharon’s complete biography, click here.

Recommended Resource – Talent Management Magazine

Talent Management Magazine
www.talentmgt.com

About the Reference

StrategyDriven contributors find Talent Management Magazine to be an invaluable source of information on effective talent management practices. Each month, Talent Management Magazine provides readers with the talent acquisition, management, and retention insights of successful executives and managers.

Talent Management Magazine is supported by an accompanying website (www.talentmgt.com). This website contains numerous articles and resources covering topics such as:

  • Recruitment and Retention
  • Assessment and Evaluation
  • Compensation and Benefits
  • Performance Management
  • Learning and Development
  • Succession Planning

Benefits of Using this Reference

Effective acquisition, management, and retention of talent is a critical success factor shared by all organizations. In today’s rapidly changing, hyper competitive marketplace, the loss or churn of key personnel resources can instantly cripple any business attempting to remain competitive.

Talent management is no longer the sole responsibility of the Human Resources Department. The expanding war for talent, brought on by increasing demand for knowledgeable, skilled personnel and a contracting labor pool, demands that executives and managers throughout the organization work together to create a work environment that attracts, retains, and motivates talented individuals.

The practical methods and actions presented in Talent Management Magazine can be implemented immediately to improve an organization’s talent management effectiveness. Additionally, Talent Management Magazine’s recommendations embody StrategyDriven ‘s organizational accountability and alignment philosophies; making it a StrategyDriven recommended read.

Subscribe to Talent Management Magazine for Free!

Sign up for your free subscription to Talent Management Magazine by clicking here.