The use of big data by human resources has several implications for the multinational corporation managing a global workforce. ‘Big data’ is defined as the use of analytic data tools to predict and manage any aspect of a business, based on large data sets from any number of sources. The sheer volume of available data increases each year, requiring the use of search technologies that make the information accessible and practical for any application.
By using statistical analysis with the assistance of sophisticated software – trends, patterns and outcomes can be seen in light of almost any element of business operations.
These data sets are now being used for ‘people analytics’ by the world’s largest corporations, many of them technology companies that are comfortable implementing the software and skills training needed for effective use of the data. Instead of relying on traditional HR methods, some companies are basing the majority of their hiring, management and retention on the use of big data.
Big Data Meets Human Resources
While the use of big data in business can be most easily understood in terms of market analysis, cost structures and consumer behavior, there are also internal uses for any large corporation. One of the most obvious areas is that of human resources, where hundreds or even thousands of employees have to be successfully managed across a global landscape. The application of big data for recruiting, compensation, retention and performance are all relevant for the modern human resources department.
Software firms are continuing to develop the tools that HR departments need to sift through increasingly large data sets, and strive to give some value to the information for human resource tasks. What this means for the HR professional is an increasing slant towards understanding the numbers and trends behind big data tools, as well as the very important people skills that are at the center of the HR role.
There is no question that the data is available, but the real challenge is in how it will be used and who has the skill to apply it within the HR department.
The Use of Big Data for Recruiting
Recruiting of talent by ‘people analytics’ is one important tool for HR professionals who are always looking for ways to identify the top prospects for any position. Some of the approaches used include:
Scanning the internet and social media such as Facebook and Linkedin for identifiers that may lead to a qualified candidate
Using in-house data bases of historical information such as past applications, business cards and other direct interactions with the company
Use of tests to sort through open applications via online games and queries, which in turn will supply the characteristics and skill sets available in each candidate
Once this data is compiled, searches are performed by keywords and scores that find the best matches for each position. While it may seem like a simple process, the sheer volume of data available can present some challenges in knowing how to pull out the correct patterns and qualities from the search queries.
This is where HR and their big data partners must find a way to increase the technology and skill needed to assess the data and evaluate candidates through the matching process.
The pitfall in all of this data analysis is that the personal aspects of HR become less emphasized in favor of simple statistics and probabilities for candidate recruitment. While big data may carry predictive value based on a range of data sets, HR still has the responsibility of assessing each candidate on their own merits and difficult to quantify variables, such as charisma, problem-solving techniques and character traits.
For example, there is no statistical evidence that a convicted felon is less likely to stay on the job or perform at a high level. However, a criminal background remains a factor in hiring for many HR departments, regardless of whether big data recommends it or not. This is only one example of how traditional HR tools and skills need to be retained and integrated with the statistical analytics of big data.
Employee Retention and Prediction Of Decision Making
In many cases, the use of big data in the recruiting process can have the effect of increasing employee retention rates. Google has an HR department that uses people analytics almost exclusively, which has increased their retention of top talent by 35%. Some of this is related to their big data driven hiring processes, which identifies the candidates most likely to remain in their position.
A few of the factors that can be used in the big data analytics to predict when an existing employee might quit include:
- Trends in employee activity
- Timing of promotions
- Regional data
- Changes in the industry
By using these data sets, managers may be able to identify which employees are likely to quit, and could possibly step in before the employee make a decision to leave.
The area of employee performance, testing and standards has historically been more art than science. However, with the advent of big data in HR there may be more tools available that help to quantify the performance metrics being used for each employee. Compiling enough data for each employee has been a challenge, but now it has become easier to generate some predictive analysis by reviewing several areas of machine-generated daily employee data such as:
- High volume of emails
- Phone log times
- Meeting attendance and participation
- Utilizing Customer Relationship Management systems (CRM)
Analyzing data such as sales volume, numbers of calls, customer satisfaction and comparing the results to industry standards are now easily accomplished by using people analytic software. This allows the HR department to monitor the employee’s performance over a period of time, and compare the results to data mined from the entire industry. This can also be helpful by giving the employee a verifiable benchmark for improvement and progress.
In addition, the data can be analyze for its effectiveness in achieving real internal business goals, such as actual time spent on corporate priorities, generating sales and producing income. In this way, employee behavior and activity can be more effectively managed and improved.
While the use of big data is still a developing area for human resources, many companies are investing in the necessary software and skills training for HR departments. There is an intense interest in finding efficient and accurate methods for locating, hiring and retaining top talent, and if big data can assist it may revolutionize the human resource function. There is still a need for face-to-face management and evaluation of employees, but if big data can predict trends or patterns any personal interface and review could be enhanced.
Previously, much of this analysis has been achieved through the intuitive skill of an HR professional and their experience in the field. Now, those perceptions can be verified and expanded by the use of a more scientific method. Instead of being suspicious or feeling threatened by the use of big data, HR departments should see data mining as a new ally in making better hiring decisions, retaining employees and creating an overall credibility in the HR role that can be accurately communicated to top management.