Baseball may be “on hold” until at least July, but that doesn’t have to stop you from tracking important stats—ones that reflect your staffing vendors’ performance.
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The Eiffel Tower celebrated its 130th birthday this year. Originally conceived as the gateway to the 1889 Exposition Universelle, or World’s Fair, it stood as a monument to commemorate the 100th anniversary of the storming of the Bastille. Although it endures today as an iconic part of our global consciousness, most people don’t realize that it was an eyesore to Parisians at the time. The French novelist Guy de Maupassant, as the tale goes, openly despised the tower yet ate lunch every afternoon in its restaurant. When asked why, he responded that it was the only spot in the city where he couldn’t see it.
His story is an interesting metaphor for the views held by workforce industry professionals on HR analytics software and “big data.” They’ve become popular buzzwords among organizational leaders who are focused on innovation. Data-driven HR functions are heralded by Laszlo Bock, former Google’s senior vice president of people operations, in his vaunted business book, “Work Rules!” Like the Eiffel Tower, people analytics and big data are symbols of modern science. And a lot of HR leaders, hiring managers and staffing & recruiting professionals look on them as ugly, complex structures blighting their once pristine environments. So, as de Maupassant, they find ways of hiding within this architecture to avoid seeing it.
As HR guru Tim Sackett explains:
“That’s the problem with Talent Acquisition everywhere. We don’t truly listen to what all the data is telling us. We gather all of the information. We get assessment scores, we get personality and cognitive measures, we do in-depth background screening, we perform behavioral-based interviews, we check the candidates’ professional references, we stalk their Facebook page, we check informal references the candidate doesn’t know about, we do just about anything to get as much knowledge as we can on a candidate. And then what happens We make a decision based on a gut feel.”
The encouraging news is that talent acquisition leaders are beginning to embrace big data and the meaningful contributions it will make in their worlds. Let’s dive deeper into people analytics and how it can become a boon to hiring managers and their contingent workforce programs, instead of an eyesore.
People analytics, or HR analytics, represents a new way of making more precise workforce decisions in a manner that replaces hunches and gut instinct with evidence and data-driven predictors. In other words, this sort of big data allows hiring managers and recruiters to make determinations about talent selection, placement, development and even separation using meaningful criteria -- information that has been correlated statistically with outcomes that can be proven and repeated. Less relevant criteria get pushed aside, along with the margin for error.
One famous example of people analytics’ success comes from the Oakland Athletics baseball team, popularized in the film “Moneyball.”
Still, not much research has surfaced on how analytics have impacted key HR and recruiting metrics. Our friends at Software Advice sought to remedy that in a 2015 report, “Improve on Key Performance Indicators With HR Analytics Software.” They found that 37 percent of small businesses were beginning to use HR analytics software at that time to help make more informed hiring decisions. And of all users polled across the board, those firms that rely on people analytics rate their performance indicators as “good” to “very good.”
In the most common scenario, Software Advice writes, “HR analytics is used to improve a company’s bottom line. This occurs either by ensuring there are enough employees to bring in maximum revenue, or that new hires have similar skills and attributes to the company’s most successful current staff.” Equally important, it can also “aggregate data and identify trends.”
The data collected by Software Advice show that companies using HR analytics and HR analytics software outperform those that don’t. Through these platforms, research demonstrates that all mission-critical KPIs improve:
As Software Advice illustrates: “For instance, when it comes to the common recruiting metric of time to hire, those respondents using HR analytics software report significantly better performance than non-software users: a combined 86 percent report ‘good’ or ‘very good’ performance, while only 58 percent of non-software users report the same.”
The investment is more economical than people believe, and HR analytics software helps smaller businesses save critical funds by making smarter hiring decisions, which bolsters their return on investment. Additionally, “most systems in the HR software space are now cloud-based -- and this deployment method is considerably less expensive than traditional, on-premise deployment when it comes to upfront costs.”
To show how people analytics can strengthen the recruiting process for talent acquisition specialists, consider an example based on Software Advice’s studies. In this case, let’s say a hiring organization is looking to fill a requisition for a senior data analyst in a management role.
Software Advice discovered that low adoption rates for HR analytics software could stem from misconceptions about the definition: “As it turns out, only 55 percent of respondents are able to identify the correct definition. The other 45 percent, combined, choose a definition that falls short. Therefore, the low adoption rate of HR analytics software may be partially due to ignorance of what can be accomplished with such systems.”
In the purest sense, HR analytics entails statistically modeling worker data. And here are the ways, talent executives can start off on the right foot when moving to a data-driven recruiting approach for their program and their staffing suppliers.
Given the attention the industry has spent on shifting talent functions from administrative to strategic, one would think HR analytics would be embraced by every staffing and recruiting leader. The reality, however, is that less than half of global companies use analytics to make talent-related decisions. Like the Eiffel Tower 130 years ago, this sort of big data seems to represent an imposing structure that casts its large, abstract shadow over a once familiar landscape.
Richard Straub writes in Harvard Business Review that our “industrial-age management mindset is becoming an impediment to our fully realizing the promise of the digital revolution’s technologies. Our accustomed modes of thinking are straitjackets constraining the human energy and creativity these tools could unleash.”
The benefits delivered by people analytics are unparalleled. And while it might seem alien and overwhelming now, in the not-too-distant future, big data will emerge as a monument enshrined in the collective conscious of the staffing industry.