When your marketing team pushes sales on your audience, they use analytics data to determine the most effective form of messaging. When your website is being optimized, your developers use analytics to determine what changes bring in the most traffic. When you want to launch a new product, you use analytics to determine the best target audience, the best features to add, and so on.
When it comes to hiring, though, do you use analytics? Or do you just put a job posting out into the usual career portals, go through a typical interview process, and hire people you assume are the best?
Data can help you optimize any process where you can view and harvest that data, and hiring is no different. Enter Talent Analytics.
What is Talent Analytics?
Analytics is the science of harvesting significant data points (Key Performance Indicators) about a subject and then using that data to make informed decisions.
Talent analytics, then, is applying this process to your talent pipeline. With it, you can harvest information about your workforce and make decisions that improve performance. These decisions can start as early as “what attributes, talents, or sources bring in the best performing employees?” and can stretch through the entire career of your top employees.
“It typically involves the use of software that gathers insights into a company’s current workforce and potential employees, allowing talent acquisition teams to understand what motivates their workers and potential hires. That’s in addition to getting a better understanding of their strengths and weaknesses. All of this info is essential for adopting strategies that improve performance and productivity.” – Harver.
Talent analytics is also commonly known as workforce analytics, human resources (HR) analytics, or human capital analytics, depending on the terminology your company prefers. No matter the name, the process is the same.
What Are the Benefits of Talent Analytics?
There are innumerable benefits to using data to make decisions. You can make more accurate choices and choices with more substantial benefits to your company when fueled by data. The key is to make sure you’re using the correct data to make the right decisions and not choosing the wrong data points to monitor. So, what are the benefits of using talent analytics?
You gain better insight into your candidate pool.
First and foremost, a talent analytics tool can look into the information gathered about candidates when they apply and collect data about them. Which skills do they list? What attributes do they have? What is their background? All of this information, where available, can be gathered and used.
This data can then preemptively answer questions the company might ask as part of the hiring process. A talent analytics platform can act as a first-line filter to weed out the least likely to succeed candidates from your candidate pool, improving the overall quality of your potential hires.
It’s worth mentioning that these pieces of software must be tuned properly to avoid issues with bias and adverse impact. A talent analytics platform that uses protected data can be grounds for legal action due to discriminatory hiring practices, even if it wasn’t intentionally created to do so.
You can monitor and track hiring metrics.
Hiring metrics include data such as:
- What is the average cost of a new hire?
- How long does it take to fill an open role?
- What sources and channels provide the most high-quality candidates?
Talent analytics is not used solely as a predictive tool. Instead, it’s primarily used as a tracking tool, monitoring real data and generating reports about past performance, which can then be used to adjust processes and improve future performance.
You can analyze your existing workforce for areas to improve.
No workforce is perfect, and employees will always have room for change and improvement. By monitoring data points throughout your workforce and your daily tasks, you can find opportunities to improve and optimize your existing roster.
- You can identify which employees are most likely to be able to learn new, valuable skills for their roles and thus be receptive to training.
- You can identify employees who may be underperforming in a given role but have the skills to succeed in a different team through lateral movement.
- You can monitor and flag certain employees for their leadership potential, or lack thereof.
- You can find the weakest links in your productivity pipeline, identifying the employees who consistently underperform or negatively affect productivity.
This can also help you avoid problems with personality and charisma interfering with objective decisions. Talent analytics can, for example, help you identify the middle manager who throws good employees under the bus to make themselves look good and allow you to take action against them rather than the people they blame.
You can leverage predictive analytics to guide the future of the company.
No algorithm will be able to replace the human element in guiding the direction and strategy of a company. However, powered by talent analytics and other data sources, predictive analysis can help identify traps, reasons to make certain decisions or not, and locate areas of improvement for the overall company strategy.
Moreover, predictive talent analytics allows you to determine if your current employees are enough to complete the expansion you want successfully or if you’ll need to hire new employees to fill skill gaps or avoid overworking and burning out existing employees.
You can analyze existing business processes and company culture.
Employee turnover is expensive, time-consuming, and detrimental to the productivity of your company as a whole. While a resilient company insulates itself against the worst damage by maintaining adequate staffing and redundancy, many companies fall short of the mark. Thus, employee retention is as important as making the right hiring decisions in the first place, if not more important. Of course, the two are tied; hiring the right people means they will fit in better and be more productive.
In particular, talent analytics can allow you to analyze your existing company culture, business processes, regulations, and monitoring to see which elements of them have a beneficial or a detrimental effect on employee turnover rates. You can then strive to promote the positive and fix the negative.
You can make more informed decisions.
At the end of the day, the primary benefit of any analytics is to empower you to make informed decisions. The analytics platform must be appropriately configured and must be fed with the right kinds of data to generate relevant reports. You must then be empowered to act on the information you receive. If all of those are true, however, you’ll be able to boost business profits, save time and money, and make better decisions without the threat of misjudgment.
How Can You Leverage Talent Analytics?
Talent analytics is often viewed as a “nice to have” process that, nevertheless, businesses don’t prioritize.
“A report by Deloitte shows that although almost 80% of large companies rate talent analytics and HR as “important” or “urgent,” only 4% of companies have predictive talent analytics, and just 14% of companies have a program in place.” – Harver.
Implementing talent analytics is easier than it sounds, but it requires executive buy-in, as well as changes to the workplace to appropriately monitor the right kinds of data to make informed decisions. This takes forethought, planning, and an awareness of the goals and intent behind the analysis you’re performing. While some talent analytics platforms come with out-of-the-box configurations, most need customization to be truly valuable to your company specifically.
To establish talent analytics and use it for the good of the company, you need:
- Goals. You need to know what you’re trying to accomplish with your reports.
- Metrics. The goals you decide on will inform the metrics you’ll be monitoring and help you avoid “trap” metrics that don’t represent what you need to make good decisions.
- Buy-in. If there is push-back or resistance to metric monitoring, software use, or even using reports to make decisions, your talent analytics will fall flat.
- Investment. Like it or not, any major business tool like talent analytics will require money and time to purchase, configure, and deploy across your organization.
From there, it’s typically a matter of finding the right software to meet your needs (in terms of business size, focus, and metrics monitored) and deploying it.
What Does Talent Analytics Look Like in Action?
Despite the meager 14% investment in talent analytics across the board, some companies have invested in their processes and have shown significant results. Here are some examples.
IBM decided to make a change to their performance review process. To determine how their employees felt about it, they applied analytics to their internal social network, asking for feedback. General feedback against one portion of the idea led leadership to re-evaluate and eventually drop that portion of the proposed changes. Had they gone ahead with it anyway, it would have demoralized their workforce and led to increased burnout and turnover.
Twitter is well-known for sending out employee surveys twice a year, but they wanted more open-ended insight. So, they leveraged a smaller sample of their workforce to send more open questions and solicit feedback. They used analytics on the resulting data to determine pain points and morale issues they could solve.
Credit Suisse Bank leveraged talent analytics via anonymous surveys to predict which employees and teams were at the highest risk of leaving the company. Once they determined who might be at risk of leaving, they figured out what issues there were and offered training and other benefits to those employees to retain them. They report that this saved the company as much as $70m per year in turnover and hiring/training costs.
Professional sports teams are investing heavily in modern analytics technology for various purposes, including using data to draft better teams, enhance teamwork, and reduce the risk of ineffective training.
Should Your Company Invest in Talent Analytics?
As mentioned above, 80% of businesses say that talent analytics is essential, but far fewer invest in it. What is stopping them?
Typically, the biggest roadblocks to investment in talent analytics are:
- Buy-in. Often, many executives are used to making decisions through their instincts and analysis. They distrust a computer system that makes decisions, especially modern systems that use black box “machine learning” and other algorithms to fuel those decisions. This can be worked around either through demonstrations of the platform’s value or through the use of platforms that present data and reports, not conclusions, allowing them to make their own decisions.
- Expense. While a talent analytics platform is not necessarily terribly expensive, any expense is more than no expense. To work around this issue, you can demonstrate that the savings outweigh the buy-in cost once the system is up and operating.
- Uncertainty. Many companies can recognize that, in the abstract, talent analytics is a valuable process to implement. When it comes down to it, though, they don’t know how actually to use it. What metrics should they monitor, and how? Luckily, most talent analytics systems have onboarding to help with this.
The truth is, virtually every business can benefit from a well-configured set of analytics to help them make hiring and workforce decisions. If you have ever thought you could use more objective interview data, better tracking of employees from application to retirement, or better performance monitoring focusing on actual, tangible key performance indicators, a talent analytics platform will do well.
Only one decision remains: what platform should you use? There are many out there, and there’s no one ideal choice for everyone. It all comes down to the size of your business, the complexity of your organization chart, your ability to implement metric monitoring, and your goals. Finding the right platform is half of the battle, but once you’ve set one up, you’ll see the value behind having deep and detailed data to use to make business decisions.
Do you have any further questions about talent analytics or how your company could use it? Please feel free to drop a comment in the comments section down below, and we’ll get a conversation started!
Andrew Greenberg’s roots in recruiting date back to 1996. He has experience both on the agency-side and corporate-side of the staffing business, with a focus in the financial services space at companies like Bloomberg and UBS. He also has core experience with information technology staffing, and has worked for major software companies such as SAP Business Objects and IBM/Informix Software. To get in touch with Andrew, you can reach him by email or by phone at (800) 797-6160.