What’s next in HR: the power of predictive data analytics

HR departments around the world will experience profound shifts during the next few years, and it’s all being driven by a single factor – data analytics

HR departments around the world will experience profound shifts during the next few years, and it’s all being driven by a single factor – data, according to Andrew Lafontaine

Just as data and the insights it provides has changed many areas of business, so it will change the way organisations recruit and manage their staff. The potential benefits for those that get it right are massive.

Until now, the conventional method of hiring new staff has been to issue a job description and then match applicants with it. Filtering people by how closely they meet set criteria has allowed HR teams to find the best person for the job. However, as we head towards 2020, this process is going to change.

Data-driven recruitment
Rather than using job descriptions, HR departments will increasingly focus their recruitment activity on staff profiles. These profiles will be based on high-performing people already within the organisation. What qualifications do they have? What experience do they bring? What personality traits do they possess?

Different profiles will be created for different roles and new applicants matched against them. Those closest to the profile are likely to be the best fit for the position.

A new data-driven approach will also be taken for staff management. Rather than promoting people on personal intuition or pressure from managers, decisions will be based on data gathered about their actual performance. Who has consistently met sales forecasts? Who has suggested productivity changes? Who outperforms the average? Such data will be constantly gathered and used to ensure decisions are based on solid evidence rather than intuition or personal opinion.

Digital platforms
To support these new ways of functioning, organisations will need sophisticated digital tools to assist in the gathering and analysis of large volumes of data. Internal data will also be augmented with streams from external sources, highlighting factors such as the public perception of the organisation as an employer of choice.

Basing these data stores on cloud-based platforms will ensure they can be scaled as required to meet growing demands. Also, by having data in a single location, sophisticated analytics tools can be used to gain insights that may otherwise have gone unnoticed. Expect to see more of this type of infrastructure during the next four years.

With the data and tools in place, organisations will also be in a much better position to accurately determine the impact of investments in activities such as staff training. The flow-on effect of training a particular team or group of individuals can be matched against improvements in output and benefits to the bottom line.

The HR team will also be able to judge the impact new staff hires have on the performance of the larger team. Such data-based insights would not have been available before and any judgement would likely have been based on little more than anecdotal feedback.

Journey to a data-driven future
There are three distinct phases through which HR departments will travel on their way to a data-driven future. The first is where departments report on what has happened within the organisation, based on historical data.

The second, which involves the introduction of dashboarding and KPIs, allows the department to understand what is happening today rather than in the past.

The third, and most powerful, phase is the introduction of predictive analytics. This will allow HR departments to use the data they’ve gathered to predict what the specific staffing requirements of their organisation will be in the future.

Through embracing the opportunities of data and analytics, the HR department of 2020 and beyond will become an even more vital resource for successful organisations – and the journey has already begun.

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