Key takeaways from this blog:
- You will learn what is predictive analytics
- See what makes predictive analytics beneficial to HR
The Human Resources industry is experiencing exciting transformations, such as the widespread adoption of predictive analytics. It is one of the newest, emerging HR challenges.
Did you know that the size of the worldwide HR analytics market was estimated at USD 2.96 billion in 2022, and it is expected to increase at a compound annual growth rate of 14.8% from 2023 to 2030? Staggering information, right?
Let’s dig a bit deeper, learn more about predictive analytics, and see why predictive analytics will be essential for HR departments.
First, let’s see what actually is predictive analytics?
Predictive analytics in HR makes use of data analysis, statistics, and machine learning techniques to help HRs make more informed decisions regarding hiring, staffing, and other operations. It is a technique that makes predictions about an individual’s actions based on data that has already been gathered.
As time goes by and technology develops even more and becomes more precise, user-friendly, and affordable, the applications and advantages of predictive analytics will only grow.
How is Predictive Analytics a Benefit to Human Resource Departments?
Although predictive analytics has received a lot of attention, it is still not used to its full capacity. However, it can be quite advantageous for HR departments in many ways:
Improved decision-making: Rather than depending primarily on gut instinct or previous experiences, predictive analytics assists HR professionals in making decisions based on data-driven information. This guarantees that HR strategies and operations are supported by factual data and have a higher likelihood of success. A 2022 research study found that over the past three years, the use of predictive analytics has increased by over 50%. Business executives who use predictive analytics report being happier with their overall HR function and having a better awareness of their personnel needs than those who do not.
More accurate performance evaluation and management: With the use of predictive analytics, companies may gain a deeper understanding of their employees’ job productivity, which can help them manage their employees more effectively. HR can identify potential performance improvement areas by analyzing relevant data and then customize training and development programs accordingly.
Improved recruiting and selection: Companies can use machine learning to identify the traits that are most crucial for a specific position and predict with accuracy which candidates will suit the company better both culturally and in terms of skills. Predictive analytics help HR improve the level of accuracy of candidate screening and selection procedures.
Some of the most interesting benefits for recruiters by using predictive analytics are Candidate Fit and Success Prediction. Predictive analytics can evaluate a candidate’s suitability for a particular position and the company’s culture. By identifying individuals who are more likely to succeed in particular roles, candidate success prediction tries to improve the hiring process.
Identifying high-performing candidates: Predictive analytics can be useful in identifying the qualities, abilities, and attributes that result in high performance in a specific position by looking at past data from successful employees. This information can be used by HR to find and hire applicants with the greatest chance of success. This helps HR in locating high-potential employees and allocating resources for their professional advancement.
Reduced costs for recruiting: Companies may dedicate fewer human resources to these manual tasks since predictive analytics models can automatically process enormous amounts of information about employees. According to some research, the total cost of hiring an employee in 2022 varied between 9330 – 10,291 dollars.
Employee turnover prediction: Predictive analytics can assist HR in identifying employees who are in danger of leaving the company by examining historical turnover data and employee-related factors. This enables HR to establish retention strategies and decrease turnover rates.
Training and development: Predictive analytics can assist HR in identifying skill gaps and training requirements inside the company by studying employee data and performance indicators. As a result, HR can create training and development plans that are specifically aimed at improving employee skills and productivity.
Employee Engagement and Satisfaction: By examining findings from survey data, performance metrics, and other indications, predictive analytics may assist HR in determining the levels of employee engagement and satisfaction. With the use of this data, HR can put in place focused efforts to raise employee satisfaction and well-being. HR departments may optimize new hire onboarding, boost teamwork, and take steps to generally improve employee performance by having a more detailed understanding of employee behavior.
Improving Communication and Cooperation: By offering insights into aspects like team dynamics, patterns of communication, and different styles of collaboration, people analytics may also be utilized to enhance communication and collaboration among employees. This can encourage the formation of productive working connections between individuals and help firms to build more cohesive and effective teams.
Decreased Hiring Bias and Enhanced Diversity and Inclusion: Predictive analytics can be used to track diversity data and spot potential biases in HR processes. This helps HR in promoting inclusion and diversity inside the company.
By utilizing the potential and power of predictive analytics, HRs may adopt a more proactive and strategic approach to managing the workforce. It enables them to make wiser and more informed choices, optimize HR procedures, and contribute to the company’s overall success.
Author: Iman Ehnech-Seran