15 May, 2023
While there may be no magic crystal balls, companies still possess the capacity to peer into the future. Buried within recruitment decisions, performance evaluations, and employee engagement surveys are trends that can guide businesses in making informed, data-driven choices for their future. The key lies in discovering how and where to search.
By skillfully employing predictive analytics—leveraging historical and current data to foresee upcoming events—organizations can enhance their recruitment processes, predict skill gaps, prevent employee turnover, and respond to significant disruptive occurrences.
That explains the nearly 50% increase in predictive analytics adoption over the past three years, as a 2022 SkyQuest Technology survey reported. Company leaders who utilize workforce analytics claim to have a more profound comprehension of their talent requirements than those who don't. They also express higher satisfaction with their overall HR operations.
However, the survey also disclosed that 42% of businesses do not use workforce analytics, which may result in missed opportunities and the perpetuation of incorrect assumptions.
Organizations of all sizes can profit from examining their historical and current data, using it to foresee potential future developments and determine the appropriate reactions. However, it is crucial to recognize that predictive analytics does not merely extend previous trends into the future.
Recruitment and expansion are natural entry points for implementing predictive analytics for numerous organizations, as these HR functions are vital to business strategies. For example, a 2022 Talent Acquisition Trends study by Lighthouse Research & Advisory, a company that investigates critical HR trends and technologies, reveals that 83% of talent executives consider hiring to have evolved from an HR priority to a business-level priority.
It is insufficient for HR to merely be aware of their workforce size. Instead, HR leaders are frequently expected to predict future skill demands and pinpoint potential turnover issues and solutions. In a modern workforce, this implies that organizations should base their hiring decisions on the skills required for current and future employees.
Predictive analytics can offer more profound insights by comparing a job applicant to a profile of an organization's most successful employees. Companies can develop a model of an "ideal" employee based on the skills, competencies, and experiences of employees who have excelled within the organization.
The objective is not to generate a group of identical replicas but to recognize qualities that might enable employees to succeed in a specific company. Recruiters can then employ this model and technology, such as applicant tracking systems and competency management systems, to help narrow a list of job applicants.
Recruiting an employee is merely one aspect of the challenge. The other crucial factor is retaining them. In addition, employee retention is a domain where companies can effectively utilize predictive analytics.
Information that most HR departments or organizations already monitor—employee engagement rates, duration since the last promotion, performance appraisal scores—can be input into predictive tools to help pinpoint indicators that suggest employees who are at risk of leaving. Recognizing why employees are likely to depart a company enables HR to implement retention strategies. That can save businesses money on recruitment, training, and lost productivity in the long term.
A recent Gallup study demonstrates the significant impact of managers regularly engaging with their employees. Although only 1 in 3 global employees strongly agree that someone has discussed their progress in the past six months, employees who receive important feedback at least weekly are half as likely to seek a new job, according to the survey findings.
Despite considerable support from business leaders, the SkyQuest survey discovered that only 20 percent of organizations extensively use analytics. The primary barriers identified are a lack of funding, a lack of expertise, and a lack of data.
Both large and small companies can encounter these challenges. More prominent companies may be inundated with excessive data, while smaller ones might need more data to derive valuable insights. For instance, examining historical data on why female managers depart from a company may be less helpful for companies with only a few female managers. However, there are measures HR can take to tackle these issues.
Predictive analytics may be more beneficial if applied to a few critical areas rather than creating forecasts for many. People analytics experts agree that having a human perspective when making predictions is vital.
Looking to harness your HR data for valuable insights? At Core Competency, we have the expertise and resources to help you accomplish your goals. Connect with our client success representatives today for assistance.
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