Today’s HR departments leverage IT to benefit almost every aspect of their daily operations.
Continual technology improvements, coupled with declining costs, have fueled a surge in HR’s usage of technology:
- Software is being deployed to manage areas such as internal mobility, appraisal management, succession planning and personal development.
- E-recruitment and performance management software are dramatically improving HR’s ability to effectively execute PRM (people relationship management) and further solidify their organizations’ employer brands.
- Applicant tracking and hiring management systems are streamlining processes and driving down costs.
As a result of all this impressive technology, HR organizations have collected massive amounts of data about virtually every part of the employee management process–especially recruiting and hiring.
But is any of this data valuable? How can HR organizations leverage it? And most importantly, could the drive to “perfect” recruiting and hiring spell the death of the “human” side of Human Resources?
Algorithms and Employee Behavior
For more and more companies, the hiring process is being done by an algorithm. HR is looking to personality tests and data analysis, instead of work history, interviews and education, to fill job vacancies. IT and data-driven analysis are critical in HR, because they provide long-range information on candidates that “old school” methods do not. For example, personality tests and data analysis can help an employer predict an amazingly diverse range of work behaviors, such as how likely a candidate is to:
- quit within the first six months ( which can reduce turnover issues),
- file a disability claim (which can help control employment costs),
- utilize creativity over inquisitiveness more often in the job (which can create better quality matches between candidate and position),
- or increase productivity (which ultimately drives revenue).
These new hiring tools are part of a broader effort to analyze “big picture” employee data and trends. By extending HR and pushing its boundaries, data analytics now allows HR to see beyond what is or what was, and actually predict what will be. As a result, more organizations are customizing their HR departments to use these massive amounts of data in hiring the right candidates for a company’s future.
Outliers and Analytics
Ever heard of the name Malcolm Gladwell? His book “Outliers” examines the extraordinary characteristics that define how or why an individual or group is “successful” on the job. Gladwell’s work perfectly illustrates the need for understanding analytics, and by extension those people who fall outside the realm of ordinary experience.
Data-driven analytics should function much the same way within an HR organization’s hiring process. By deconstructing the traditional hiring model and identifying “outlier” characteristics that correlate with success, Big Data can provide new parameters to guide companies’ recruiting and hiring processes, such as:
Value in human capital – These are strategies that engage and motivate employees; not just for short-term goals, but for long-term employee success. To create value through engagement, organizations can use a range of demographic or socio-graphic factors to identify groups of similar individuals who could be engaged in similar ways.
Social capital – This focuses on how potential candidates will work together in a group or team setting. Together with other measures of engagement activities, a social network analysis can help companies understand what types of people are best able to work together as a community.
Source of performance – This helps HR better understand:
- which qualities allow employees to perform well in their jobs,
- where their strengths and weaknesses lie,
- and how the company can help transform those points.
Leadership performance – This is an analysis of characteristics, patterns, and behaviors that make leaders effective in their companies. This type of data may also give companies a glimpse into a candidate’s “potential” for leadership capabilities.
The Human Factor
The ultimate goal in using data-driven analysis in HR practices is to streamline recruiting and hiring processes–but that doesn’t mean the human touch is obsolete. Quite the opposite, in fact. Using analytics to identify behavioral patterns that correlate with high productivity, service, innovation, and execution can provide a roadmap for hiring success–by looking for those same patterns in candidates. But while businesses are relying more on Big Data for hiring, human instincts are still invaluable in deciphering and applying that data.
While technology can reduce the administrative burden associated with HR and enable them to focus on more strategic issues, HR will always be about people management–which requires human interaction and face-to-face contact. As a result, HR organizations should attempt to strike a balance between data and the human element.
Can Your Company Improve HR with IT?
Absolutely. Here are a few recommendations for leveraging the power of Big Data, without losing the human touch:
- View IT and data analysis as assets–adding to the foundation of your HR division, and making it stronger.
- Think of “big data” as your process for determining “outliers” among potential candidates.
- Use data-based hiring tools as part of a broader effort to analyze employee data and trends.
- Use IT data and analysis in your HR division to critically examine: value in human capital, social capital, source of performance, and leadership performance and potential.
- Use employee data trends to help you determine: whether a candidate will improve productivity; whether or not a candidate is a good fit for your company’s long-term goals; and new ways to enhance your compensation packages, employee training, and leadership and mentoring programs.
- Make IT an extension of your HR division, allowing your human resources employees to focus on what matters most–finding the right candidates who will help your organization grow and thrive.