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Big Data and Predictive HR Decision Making Part 1

Posted by Lambda Solutions on Jul 10, 2014

Part 1: Introduction to utilizing Big Data for Predictive HR Decision Making

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What is Big Data?

The age of ‘Big Data’ has arrived. During the last ten years, an explosion of data stored in many different formats has been revealed as companies adopt new digital communication and information technologies. Just how big is that explosion? IBM estimates that each day 2.5 quintillion bytes are added to the global storage load. The growth is more than exponential given that 90% of all data in the world was created in the last two years.

How does Big Data Relate to HR?

Enterprise resource planning (ERP) and customer relationship management (CRM) systems have been gathering data about finances, products, customers, human resources, and many other business related information for almost 20 years now. All that data, stored in structured relational databases, can be used in combination with unstructured data such as emails, blog posts, videos, chat, and information from social media to create insightful reports.

As talent and performance management platforms have become more widespread, human resource organizations have been gathering information about individual employees and the workforce as a whole. As the so-called “War for Talent” heats up, human resource professionals are being promoted to the C-suite where they can provide strategic insights leading directly to improved corporate performance. The key now is for the new Chief Human Resources Officer to contribute data-based insight into both workforce and individual employee performance.

Business Intelligence for Predicative Analysis in Human Resources

Reporting on what is happening in your workforce now is the first step to making smart human resources decisions. Most HR departments have the ability to access key performance indicators (KPIs) and can generate workforce scorecards for planning. This kind of reporting is essentially a rear view mirror approach to planning. The next level of analytics maturity takes reporting a step further. Can you understand what is taking place now, and anticipate what might happen in the future. In other words, can you develop predictive analytics for HR? Big data is essential to the latter because predictive analysis requires large sample groups in order to be considered statistically sound.

Delivering Business Value with Predictive HR Decision Making

statsMistakes in talent decisions can be costly. Successful HR is about making good decisions about employee matters. Any foresight before making a decision – be it about retention, recruitment, succession planning or development – is a powerful weapon in HR’s arsenal. Studies show that most people can only intelligently process up to eight variables at a time. On the other hand, advancements in math and computing science have generated algorithms, which can process thousands of related and unrelated data points (numerical, text, audio, video), to and come up with far superior decisions making rubrics than human judgment.

The end goal of predictive analytics is better performance, smarter decisions, and actionable insights that drive business value. From a human capital management point of view, big data and predictive analytics can work at the macro and micro levels.

You can develop big picture (macro) predictions related to your workforce -- or sections of it -- to steer around weaknesses and improve strengths. At the other end of the scale, you can create micro predictions at the individual employee level to encourage performance and avoid risk.

By thinking out of the box and combining large publicly available data sets with your proprietary data, you can create truly compelling insights that can vault you ahead of competitors. Every organization is different. As a result, HR professionals formulating predictive analytics must have a clear understanding of the business, be able to think creatively to discern which analytics will have the biggest business impact.

In Big Data and Predictive HR Decision Making Part 1, we introduced you to the basics concept of Big Data and HR. Tomorrow we will be publishing Part 2 of the series so be sure to check back to learn about the specific HR insights you can generate with Big Data! To being utilizing Big Data for predictive decision making ensure that you have a HR and/or talent management system in place. For a free demo of one of the world's leading open source talent management system, fill out the form here. Additionally, check out our whitepaper on how predictive analytics deliver value.

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