Add data-driven clarity to hiring decisions
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1 HCM Predictive Analytics Perspectives Add data-driven clarity to hiring decisions Today s globally connected business world eats speed for breakfast. Rapid change and marketplace pressures are competitive motivators that drive organizations to move at a faster pace, which makes the need to hire quickly an ever-greater necessity. However, for many businesses, leaner, under-funded HR departments are still a post-recession reality. 1 It can be a difficult and time consuming challenge to efficiently sort through a pool of talent without additional manpower, particularly if hiring a large volume of employees is a frequent occurrence. Even when speed is possible, without the right processes in place, speed can be detrimental to the long-term health of a company because it often leads to costly misfires in hiring. There is a solution predictive analytics. Predictive analytics blends science and technology with a proven methodology. When applied to people, it can add data-driven clarity to hiring decisions. And the data obtained can continue to inform and shape a successful employee journey long after the point of hire.
2 Table of Contents 3 From many to one: Narrowing the field of talent to the best fit for your business 4 Early hurdles to conquer: Getting past short-term challenges 5 Creating permanent organizational change: It starts at the beginning 2
3 From many to one: Narrowing the field of talent to the best fit for your business Hiring best-fit talent in the 21st century requires a degree of rigor that is markedly different from outdated practices guided by subjective levels of instinct and intuition. As HR thought leader Dr. John Sullivan has noted, People costs often approach 60% of corporate variable costs, so it makes sense to manage such a large cost item analytically. 2 Online analytical assessment tools can be a boon to organizations, for this very reason. Data is an objective expression of each individual s value and future promise. Collectively, it can be used to manage performance, productivity and growth. The most beneficial point in the hiring process to begin formulating data is at the earliest prescreening stage. All potential candidates can be pre-sorted through a set of comparative parameters based on job requirements, cultural suitability, and more, to identify those with the highest potential fit. The online prescreening test can winnow the universe of interested candidates down to the number a company wishes to interview, saving much-needed time. And, potential employees can be compared to existing employees, with analytics distinguishing which candidates will be the most likely to stay and succeed, giving you an early jump start on retention. Stem the tide of turnover: Analytics can build a better workforce Just about every business is focused on retention today, with good reason. As Kiplinger has noted, fueled by stronger consumer spending, the US economy will grow at a 3.3% pace in 2015 up from 2.4% in 2014 and will continue to expand. 3 As the economy continues to get healthier, more jobs are created, which leads to more job-hopping. Statistics show that first-year-of-service turnover rates increased from 22.6% in 2012 to 34.1% in 2013, and they continue to rise. 4 Satisfied and committed employees don t job hop. The data provided by behavioral modeling at the prescreening stage can impact turnover because it offers deeper, more accurate insight into the behaviors, preferences, and learning gaps of an individual, which can help guide personalized onboarding processes, learning and development planning, and future opportunity matching, leading to greater job satisfaction and retention. People costs often approach 60% of corporate variable costs, so it makes sense to manage such a large cost item analytically. 3
4 Behavioral modeling also helps prevent misfires in hiring, which can be costly. The US Department of Labor estimates it can cost an average of one-third of a new hire s annual salary to hire a replacement. Other sources show an even higher cost, up to five times a bad hire s annual salary, according to the Society for Human Resources Management (SHRM). 5 With analytics, you can lower the amount spent on poor hiring decisions and make sure your investment in the talent acquisition process continues to be spent in the right place in a repeatable analytical approach that delivers accuracy in hiring. Early hurdles to conquer: Getting past short-term challenges As The Atlantic noted, when it comes to the application of predictive analytics to people s careers, most companies are just beginning to explore the possibilities. But make no mistake: during the next five to 10 years, new models will be created, and new experiments run, on a very large scale. 6 Many companies are just beginning to understand the long-term benefits of using behavioral modeling to identify best-fit talent. Others may be hindered by short-term challenges. One of the biggest is the shift in mindset required for businesses that have relied on outdated processes that require a lot of human intervention to identify and pre-sort pools of viable candidates for a given position. Online assessment tools do the work that would typically require a team of HR professionals, and these tools can do it faster and more accurately, and with more consistent results. Some companies may still prefer paper-based processes and be hesitant to adopt online analytics because of the initial investment required. Or they aren t comfortable making the leap to a cloud-based HR solution, preferring instead to use software they own themselves. And, while it s increasingly rare, there are still some companies that don t have Internet capabilities, and so can t take advantage of online tools. Despite the hurdles to change, smart companies are actively deploying predictive analytics to improve their quality of hire in order to build and retain a more able workforce that s capable of working at the speed of competition. Data provided by behavioral modeling at the prescreening stage can impact turnover because it offers deeper, more accurate insight into the behaviors, preferences, and learning gaps of an individual. 4
5 Creating permanent organizational change: It starts at the beginning Why is it so important to use predictive analytics at the beginning of the talent acquisition process? Because people data not only shapes early decisions about a potential employee, it also creates a road map post-hire for how that individual can succeed within a company, which can lead to faster productivity and longer term job satisfaction. And, it sets the stage for permanent organizational change, where best-fit talent can thrive. Learn more about predictive analytics 1 Brian Sommer, The problem is HR, not HR technology, ZDNet, October 14, Dr. John Sullivan, How Google is Using People Analytics to Completely Reinvent HR, TLNT, February 26, David Payne, GDP, Kiplinger, January 30, Andrew R. McIlvaine, The Power (And Peril) of Predictive Analytics, Human Resource Executive Online, May 21, Fred Yager, Five Tips for Hiring the Right Candidate, Dice, Don Peck, They re Watching You at Work, The Atlantic, November 20, Share this : Copyright 2015 Infor. All rights reserved. The word and design marks set forth herein are trademarks and/or registered trademarks of Infor and/or related affiliates and subsidiaries. All other trademarks listed herein are the property of their respective owners Avenue of the Americas, New York, NY INF en-US
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