Does HR analytics make sense for your organization?

Nolan Gray Products & Technology

How can you put data to best use in recruiting? Specifically, how can organizations make the most out of analytics to spur effective hiring using today’s talent management software? While proponents of big data have all but written off human decision-making in favor of computer-driven insight, there’s definitely something to be said for the role software plays in making recruiting more efficient and basically allowing you to hire the best talent without scouring the ends of the earth.

Who started talking about HR analytics?
Pinning down where the conversation started about human resources and analytics is a fairly difficult task. But an article for Harvard Business Review from 2013 may be a turning point in the discussion of the ways recruiting professionals can apply data analytics in a context that has for so long resided in the realm of gut feeling and intuition.

The HBR article drew attention to a telling example: Ameriprise Financial, a subsidiary of American Express. The financial services firm found from employee feedback that its onboarding, training and other HR initiatives were rated poorly. In response to this situation, Ameriprise sought to bring together data from its recruiting and hiring practices with actual financial outcomes to get a better understanding of how to improve its HR situation. Some of the key insights and actions the company took were to alleviate issues with new hires and address individuals who were performing at a lower level than expected.

The problem that can crop up with HR analytics and trying to manage vast amounts of data is that it makes information more difficult to synthesize. In other words, you can’t gather major take aways from the data presented to you because there’s simply too much to consider. As a result, any kind of data analytics solution needs to enable decision-makers to see the biggest, most important trees from the forest. As the HBR article suggested, the data being measured and tracked must be relevant for a specific business need or purpose. It should go without saying that data needs to be valid and accurate, or else you risk doing more damage than good. Additionally, HR analytics is put to best use when the data presents a recognizable an actionable message. This, of course, depends on the software, which varies in functionality, that you choose.

Is HR analytics achieving maturity?
A recent study from research and review firm Software Advice looked at the way analytics has impacted HR and recruiting. There’s evidence that the use of data in this capacity has caught in many organizations. For instance, the study found that 37 percent of small businesses use HR analytics software in some capacity to enable more effective hiring. However, more than half of the respondents in the study said cost is a roadblock to implementation.

Yet, the most important insight from the research is that companies that use this software perform better than those that don’t in a variety of ways, including time to hire, retention, productivity, diversity and cost per hire.

While there may be a perceived financial barrier for some organizations in utilizing HR analytics, evidence suggests is an overall benefit. The challenge is selecting the best recruiting software for your organization’s needs.

Jobscience | Beyond the Applicant Tracking System

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