Importance of Predictive Analytics in Human Resources
What is Predictive Analytics?
“Predictive Analytics is a broad term describing a variety of statistical and analytical techniques used to develop models that predict future events or behaviours.”
Charles Nyce, Predictive Analytics White Paper, 2007
Predictive Analytics and machine learning are disrupting a range of functions within a business and human resources is not an exception. By quantifying human capital, organisations are able to better predict future trends and make stronger and well-informed decisions. A lot of organisations have already started leveraging on large employee data-sets for the same reasons.
Here are some ways predictive analytics could help HR leaders shape talent operations.
Proactive Employee Retention
While employee turnover is normal to a certain extent, organisations should be able to minimise attrition risks by successfully predicting exit of high-performing employees. Employee exits can often spiral out of control if HR leaders cannot accurately monitor employee satisfaction levels. Apart from tracking how happy current employees are, companies must also focus on metrics to identify gaps in skills, foresee changes that might be inevitable and develop learning and development programs accordingly.
Better Leadership Assessments
One of the most important assets in any organisation is the leadership quality it possesses. It is imperative to monitor employee performances and check leadership potential among current employees to pave the path for a strong future. Many organisations have internal assessment plans in place to review leadership potential, however, most of them adopt a subjective strategy. Predictive Analytics and related technologies can provide a data-backed system to find trends for potential leadership traits in employees.
Smoother Payroll Systems
With advanced predictive metrics, it is now possible to improve payroll systems. Issues like time clock frauds, waste of company resources, and employee bonus anomalies run rampant in many organisations. Such errors can be rectified effectively through a systematic, data-driven analytics plan saving organisations valuable time and money.
Predictive Analytics in HR is still a new trend with a huge potential. A lot of organisations are still taking resort to manual data mining, which is time-consuming and often erroneous. HR Analytics will prove to be a game-changer since it will not only make day-to-day human resources operations smoother, but it will also help HR leaders to successfully predict risks and formulate effective measures.