HR drives business performance by delivering competitive advantage through people. Since performance relies on measures, HR can contribute to business success by embracing the power of data insights. Finance and sales departments have been using data to strengthen company success for decades. And today, HR is increasingly getting in on the action.
HR already collects critical employee
metrics, including payroll data, turnover,
benefits cost per employee, and
demographics. The key is to collect and
analyze data, and use those findings to make
business decisions and improve your bottom
line. If you're new to data analytics, Bersin
by Deloitte (a research and advisory service)
recommends starting small. Partner with
an experienced colleague on an analytics
project to tackle an HR problem, such as
reducing turnover, improving engagement,
or reducing accidents. Experience and
insights will give you knowledge about how
to make data work for you.
Everyday ways data can benefit you
Your people are the powerhouse
of your company and recruitment
is key to getting the right talent
on board. But the reality is that
recruitment is an HR process
plagued with biases that can lead
to costly hiring mistakes.
The Harvard Business Review article
"In Hiring, Algorithms Beat Instinct" suggests that
85%–97% of professionals rely on intuition when it comes
to assessing a candidate. A poor hiring decision made on
intuition alone can cost you thousands of dollars. In a 2013
CareerBuilder survey, 27% of employers said a bad hire cost
them more than $50,000.
You're more likely to find the right fit when hiring
decisions are supported by hard data (e.g., analysis of
skills, knowledge, and experience), coupled with manager
input. Studies show that companies that make fact-based
workforce decisions perform better than those that don't. A
2013 CEB Corporate Leadership Council survey found that
companies leading the way in the use of analytics had 12%
better talent outcomes than the average company.
According to Laine Thomas Conway, a partner in the Talent &
Rewards Best Practice team at Aon Hewitt, data should be used
to drive compensation decisions, especially as variable pay
becomes more common. At a baseline level, data can be used to
determine internal benchmarks (pay ranges), external benchmarks
(market pay), and performance ratings. Thomas Conway cites two
obstacles to the use of data for compensation decisions:
1) data is not readily available, and 2) managers are not trained how to use data effectively.
Without the use of hard data, compensation decisions are often made on personal
judgments that can lead to inequitable pay practices.
Paying employees is the most expensive budget item for most companies. That's why
it's so important to make sure you're compensating your employees in the most efficient
way possible. Sticking with the status quo is the easiest thing to do, but not knowing
your employees' real value may have a direct impact on your company's recruitment
and retention initiatives. When it comes to compensation, data analytics can give your
company the upper hand in securing the top talent you need to succeed.
Another advantage of using big data in the workplace is the
opportunity to learn why employees leave – and what makes
them stay. With the use of data analytics, Xerox cut its call
center attrition rate by 20%. Data helped Xerox determine that
individuals they identified as "creative" types were more likely to
stay with the company than those who were "inquisitive." They
gathered data by putting applicants through a series of tests
and then tracked their job performance.
In addition, Xerox identified several characteristics of their ideal call center worker.
He or she is a person who lives near the job, has reliable transportation, and uses one
or more social networks, but not more than four. And he or she tends not to be overly
inquisitive or empathetic, but is creative. Since Xerox invests $5,000 to train each call
center employee, reducing attrition was a big win for its bottom line. These types of
employee insights are universal and apply to all businesses of any size. The key is
to find the right partner to help you turn raw data into winning solutions.
ADP® takes the complexity out of big data
ADP's human capital management services can help put data insights to work for you. We have
the people and expertise to take the complexity out of big data by organizing and presenting
information in ways that are clear, simple to understand, and actionable for your business.
Source: "Meet the New Boss: Big Data," The Wall Street Journal, http://www.wsj.com/news/articles/SB10000872396390443890304578006252019616768
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