HR Trends to Watch: The Rise of Predictive Analytics in Hiring

HR Trends to Watch: The Rise of Predictive Analytics in Hiring

Predictive analytics is a powerful tool that can help HR leaders make informed decisions to support talent strategies. However, it requires robust and extensive data collection to be successful.

Hidden among the hiring choices, performance reviews, and engagement surveys are patterns that can foretell future events — or at least provide a good idea of how things might play out.

Predictive Analytics

HR leaders are shifting from intuition-based hiring decisions to data-driven approaches. Several factors are influencing this change, including new analytics tools and systems that provide robust and accessible data management and analytics capabilities. These tools can help identify talent needs, such as in-demand skills, and allow for tailored training programs to equip employees with the necessary knowledge. This results in a more efficient and effective workforce, directly impacting the company’s bottom line.

Data-driven decision-making also allows for more strategic planning around hiring and retention initiatives. For example, by analyzing employee data, HR managers can determine which departments are most likely to experience turnover and what steps they should take to prevent it. This proactive approach can save time, money, and resources by reducing the need to recruit and train new employees.

However, using predictive analytics in HR comes with challenges that must be addressed to maximize its value. First, ensuring that data is reliable and accurate is critical. This includes ensuring that HR teams are using a single, integrated system to collect data from all sources. It is important that the system is designed with the specific needs of the organization in mind. This may include incorporating advanced analytics tools into existing software or investing in specialized data management and analysis platforms.

Another challenge is addressing the inherent biases in predictive modeling systems. These biases can result in unfair outcomes for candidates or existing employees. To avoid this, HR departments must ensure that they are assessing data in a way that is free from bias and that they are consistently auditing and updating their models. Additionally, they should implement clear and transparent policies around how they use and protect data, including adherence to privacy laws and ethical standards.

Gen Alpha

In a recruiting world where a new generation of workers has entered the workforce, predictive analytics can help to make hiring more strategic and reduce rushed decision-making that often leads to bad hires. It can also be used to identify top talent based on their strengths, weaknesses, and interests, which can lead to a more successful onboarding process and lower turnover rates.

It can also be used to counter unconscious biases that can creep into traditional HR processes, like the formal annual review and feedback system. Employees are more likely to stay longer with a company that invests in their development and well-being. This is a big win for companies seeking to increase their diversity and inclusion (DEI) efforts, as research has shown that businesses with more diverse teams perform better.

Getting the most out of predictive analytics requires a robust data collection system that includes everything from resumes to applicant tracking systems, email communications and more. HR leaders will need to implement technology that can easily integrate with existing systems and work with data scientists to develop models that are effective for their specific needs.

A computer can sort through applications and resumes in minutes that might take weeks for a human to do, which can help with speed and accuracy. It can also identify subtleties that a human might miss, including a candidate’s likelihood of success in the role or alignment with the company culture.

While new and exciting methods of analyzing data can be appealing, HR leaders need to be careful about relying on them for critical decisions like salary adjustments. Long-term trends should be based on tried-and-true benchmark sources and not a sudden influx of volatile data.

Technology and AI

Across industries, companies are embracing technology and AI as business imperatives. This tectonic shift demands HR professionals to transform how they support the organization at every level. HR must build an attitude of innovation, agility and antifragility in their teams to effectively harness these technologies.

New compliance regimes like pay transparency and growing awareness of the links between employee well-being and performance demand innovative approaches to workforce management. Embedded HR, where HR isn’t just an advisor but an integral part of the team, will become increasingly prevalent. This approach ensures that strategy and execution align to maximize impact.

HR leaders can no longer afford to rely on dated methods to assess and predict employee productivity and well-being, which requires a greater emphasis on data analysis. In addition to providing more timely and accurate insights, predictive analytics can also help companies streamline the candidate hiring process. By using advanced algorithms, predictive analytics can filter out candidates who are unlikely to thrive in the role, saving recruiters and hiring managers time.

Many HR departments already collect the data required for predictive analytics, such as employee engagement levels and time since the last promotion. This information can be fed into predictive software that flags employees who may be flight risks, allowing the company to take steps to prevent them from leaving. This can save a significant amount of money on training, recruiting, and lost productivity.

Predictive analytics can also identify the characteristics that indicate an employee will adapt and thrive in a changing workplace. This could include an interest in learning, creativity and a willingness to work remotely. It can be useful in identifying talent that is likely to remain relevant in a fast-changing economy, where the majority of workers will need to upskill or reskill for their roles by 2025.

Workplace Wellness

One of the most significant challenges HR leaders face is addressing employee engagement and retention, which is why many teams are looking to predictive analytics to help. Data that most departments already collect, including flight risks based on employee satisfaction scores and length of time since the last promotion or performance review ratings, can be inputted into predictive software to identify patterns that indicate employees are likely to leave the company soon. This allows HR to take steps to keep them engaged – and save the costs of hiring, training, and lost productivity associated with turnover.

HR leaders are also focusing on workplace wellness, recognizing that employee health and happiness can have a direct impact on the effectiveness of teams and the success of their businesses. For example, companies that offer on-site healthcare benefits to their employees have higher NPS scores than those that don’t. And companies that provide flexible work arrangements, such as remote-first policies and flextime options, have lower absentee rates than those that don’t.

Moreover, HR teams are focusing on ways to increase their employees’ engagement with their jobs and the company culture, such as providing a variety of flexible work opportunities and rewarding high-performing workers. Increasingly, HR leaders are using data and predictive analysis to find the right mix of incentives, rewards, and programs for their workforces.

As we move into 2024, it’s clear that HR is increasingly a strategic partner in the success of business strategies and a critical component of organizational change. To make the most of this role, HR leaders must prepare for the future by embracing and driving technological disruptions while implementing effective and efficient practices that resonate with their diverse workforces.

Supporting Leaders

HR leaders who are able to identify the potential for their employees to excel in new roles can be proactive about developing a plan to help them advance to those positions. For instance, if an HR leader notices that one of their managers may need more training to become the next leader of a division, they can prepare by finding the right mentorship and coaching opportunities for them to grow. Managers who feel confident in their abilities to lead motivate the teams they oversee.

It’s not uncommon for HR professionals to make knee-jerk decisions when under pressure. As a result, the company values they espouse are lost in translation when it comes time to put their policies into action. To avoid this pitfall, HR leaders should strive to make the company’s core values foundational in high-pressure situations. This will prevent them from making autocratic decisions without regard for the effects on their employees.

Another way that HR can make their company values more prominent is by ensuring they are reflected in day-to-day practices and employee rewards. For instance, fostering a healthy work environment by encouraging a sense of fun at the office is an excellent way to show appreciation for employees’ efforts and boost morale. Similarly, promoting diversity, equity, and inclusion (DEI) is another excellent way to make the organization more human and relatable.

In the wake of recent global events, people are reexamining their choices and priorities. For many, that includes reexamining their employment options. Businesses need to provide quality work experience and career growth, as well as a healthy work-life balance to give workers a purposeful life. In a world where antifragility is key, HR is in a unique position to guide the business toward greater resilience and success.

Bret Harris

Operations Executive & Integrator | Process Optimization Expert | Team Builder & Leadership Developer | Author

2w

Felipe, thanks for sharing!

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Felipe Negron, SHRM-CP

I help organizations get better results through people | Director of Human Resources Content | Realtor®

3w

Thank you for the like Mohan Krishna Royal

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