"Your boss may know you want to quit before you do."
This headline from American Public Media's Marketplace, used to introduce advanced talent analytics to its broad radio audience, and many others like it are increasingly common. It's really no surprise. The power of big data is being touted by organizations both large and small. But access to that type of information is especially critical for large organizations.
We now know that predictions like this are possible, so the conversation is shifting to whether the value of the information you acquire is worth the cost of gathering it. Introducing a new technology has undeniable costs: licenses, infrastructure, staff training — maybe even recruitment. Advanced talent analytics — a technology that some argue holds promise to transform how talent is acquired and managed — is no exception.
In 2013, Bersin by Deloitte noted that the stock prices of firms using "high-impact talent analytics" outperformed the S&P 500 by 30 percent. Was this correlation or causation?
How talent analytics creates advantages for its users is a great place to start to sort that question out.
The Value of Talent Analytics to Your Organization
Kaggle is a company that engages data scientists across the world to solve real-world problems across a variety of industries, including HR. They do it by hosting competitions, which can attract as many as a thousand competitors or more, depending on the goal. For example, CareerBuilder sponsored a competition to predict which jobs its users would apply for based on previous applications, demographics and work history.
In describing how advanced talent analytics bolsters HR, Kaggle groups talent analytics candidate use cases into four categories. For each category Kaggle identified, here is but a sample of possible ROI opportunities:
- Resume screening. Compare features of resumes against outcomes, such as hire events, performance reviews or terminations. ROI: improved retention, decision support to reduce hiring cycle time.
- Employee churn. Attempt to identify employees at highest risk of resignation or termination. ROI: avoiding recruitment and retraining costs.
- Training recommendation. Examine performance review data and recommend training programs. ROI: compliance improvement.
- Talent management. Attempt to identify employee career success with the organization or probability of success in a position category. ROI: avoids retraining.
ROI: Case Study
To see how much ROI talent analytics can produce, consider the effort made by a large global enterprise. Ericsson is a global technology enterprise based in Sweden with more than 116,000 employees. According to an article in People Matters, Ericsson achieved promising results by integrating talent analytics with other business processes.
"The effects were seen on various fronts such as large [help desk] ticket operations moved to Talent Acquisition Global Shared Services Centre (TA GSSC) when the capability to automate was proved," according to Ericsson. "New tools have been designed to align the process with access-based in-house tools developed to send triggers, merge data ... and provide effective dashboards for business. This has resulted in 50% efficiency creation and reduction of timelines by 25%."
Determine Clear Objectives to Obtain Valuable Data
Advanced talent analytics demands that HR leaders marshal a mix of general benefits and the specific workforce pain points for each business. For example, for Northern California tech companies, CHROs say the main problem is fierce competition for top talent, which puts a premium on acquisition and retention. On the other hand, for a large hospital network, avoiding HIPAA fines that can range as high as $4.8 million per incident, according to Becker's Health IT & CIO Review, is the goal. Predictive analytics to detect employees most in need of compliance training would figure prominently in a hospital's analytics technology investment.
Although the tools are promising, according to the Smart Data Collective, "predictive analytics will not replace human intervention: they won't tell you the one clear course of action to take." In an article for the Society for Human Resource Management, Mark Berry, former vice-president of people insights for Conagra foods, wrote about the dangers of a failed talent analytics initiative. He lists a bevy of possible pitfalls but key among them is the necessity of determining whether leaders are truly committed to developing HR analytics. Without the full commitment of the entire organization to embrace this type of intelligence and use it prudently, any analytics initiative is destined for failure.
No analytics are needed to bolster that insight.