In many countries, credit bureaus will look at your current income and your past spending patterns to determine if you're worthy of receiving credit. If you can't pay cash for a purchase, your credit score helps businesses determine whether or not you are eligible to buy a new home, a new car, or a new Coach purse.
Credit bureaus use "predictive analytics" to understand how your past behavior will equate to future success. Predictive analytics is the discovery of meaningful patterns in data. However, it's not the data itself that always matters, but rather, the signals that exist within and across data.
HR data everywhere
In human resources, we sit atop a huge pile of data. The chain of data collection begins the moment we put a requisition on our careers website. Candidates submit resumes and make inquiries. We screen applicants, and hire candidates. HR departments conduct background checks, onboard new employees, track performance metrics, and make labor estimations based on business forecasting models.
Once employees join an organization, they visit websites and communicate with colleagues via instant messaging and email. Your workforce spends time on enterprise software solutions and interacts with global teams via Skype.
Are there patterns in your HR data?
What if a computer program could look at HR data and employee behavioral data and understand whether or not an employee is looking for a new job? What if a software program could see patterns in communication and tell you if a leader is a good leader? What if you could understand the ROI of your training program before you spend $50 000 on that program?
That's predictive analytics, and that's the future of human resources and talent acquisition.
Now, listen. Computers aren't psychic, and people are
somewhat unpredictable. No software program can predict a sexual harassment
lawsuit or a random workers compensation claim.
But in the quest for improved employee engagement and better integration of leadership development programs, predictive analytics and workforce optimization software may help.
It's time for HR to start using predictive analytics
Much of what I've just described is uncharted territory for human resources professionals, but predictive analytics are old hat for financial companies and customer-facing businesses who are trying to understand how, when and why people spend money and buy things.
If you want to learn more about data and analytics, partner with your IT director and find out how your company uses analytics in other aspects of the business. Ask your IT and finance teams for ideas on how you can better leverage the data you have from your recruiting and performance management software solutions.
And remember that Rome wasn't built in a day. Just like your credit score, life's circumstances have a real-time impact on the data.
You don't have to master predictive analytics, but you do need to take baby steps in order to be respected by your business leaders. The time is now!
Your Turn: What predictive HR analytics data would you most like to have?