For centuries, businesses have thrived on exceptional analytical competences. Even when you had not heard of words like metrics and predictive analytics and big data, every successful businessman was using them silently to multiply his wealth.
Since HR services now constitute a critical part of running a smooth show, phrases like these are now commonly used to represent measurement in outsourced HR shared services too. Here is a quick outline of what these phrases really stand for before we explore the awe-inspiring benefits of Big Data HR can bring in for an organization.
Metrics: Simply put, metrics is the data used to compute the cost and impact of HR processes, to measure success of common HR areas like employee engagement, retention and performance. Metrics helps an organization in making best decisions about the workforce and cherry-picking effective HR initiatives. Metrics track activity but cannot act as the sole indicator for evaluating the causes for engagement and turnovers. Enter analytics.
Predictive Analytics: Analytics assess HR metrics to ascertain influences on organizational performance by looking for patterns of similarity between various metrics. Metrics benefit an organization by raising questions and analytics provide answers by consistent statistical tests. Over a long period, organizations can turn predictive by using the analytical data to answer questions before a pattern emerges. Questions like:
1. Who is leading the race for the most successful employee?
2. Which of your star employees are at a risk of exit in the next year?
3. Which HR schemes will have a significant impact on revenue and profits?
Big Data: Wikipedia defines Big Data as a broad term for colossal data sets whose enormous size and complexity kicks out traditional database processing tools, and demands advanced solutions. It’s not really hard to imagine a large organization with thousands of employees and multiple HR data points facing their own big data issues on a mammoth scale. This is where outsourced HR shared services fit like a dream!
For HR, Big data analytics is the process to skim trends, patterns and insights from the peaks of infobesity. The Big Goal is to inspect human behavior and find out yet-unknown insights and predict actions for HR functions like hiring, training and selecting most proficient HR initiatives.
Here is a stunning visual created by IBM that tersely shows what Big Data actually is! And this is a 5 years old image yet absolutely
relevant to explain the concept and possibilities of big Data for Outsourced HR Shared Services.
A knowledge dependent economy thrives under superior decision-making capabilities and big data offers an opportunity for data-driven decisions that can impact the business strategy across the organization.
Intuitive Data about Employees is a bonanza
Cut-throat competition and receding profits have had expansive implications on businesses around the globe. Analyzing and predicting employee behaviors are now widely accepted as the first crucial step towards proactive HR management. Performance scores, engagement patterns and turnover trends are the three major informants which, if analyzed judiciously, can spot and try to prevent avoidable resignations.
Greater ROI on Human Resources
60–70% of the annual budget of a service focused company’s annual budget is overtly or obliquely related to human capital. Formidable for a small company! Now add to this the ubiquitous decree to cut-corners and the poor managers are constantly under pressure to get the most out of this investment. Thus, Performance Data gains significance by linking performance to employee costs as one of the best approaches to calculate ROI.
Over a few years, this performance data in itself can become your priceless cradle of big data with unmatched potential for insights on high-performance drivers, employees’ competencies and behaviors and matching expectations with reality when you want to predict continuous high performance from this elite force.
Talent Management will be indispensable
The coming decade will see a massive upsurge in focus around talent management. The process can be categorized as ACQUIRING the best; RETAINING the best; REWARDING the best and challenging the available talent to match and become the best.
Since these processes demand considerable investment, big data will facilitate outsourced HR shared services to deliver skills and competencies that will drive the organization to reach its goals.
Better Workforce Planning
Business needs and HR supplies need to be aligned inclusively for an efficient business operation. Big data can play a critical role in workforce planning by forecasting trends and patterns of employee movement as a basis for reducing attrition and augmenting retention.
Aligning workforce planning information with current recruitment levels, outsourced HR sharing services can reveal staffing peaks and regulate recruitment levels. This predictive and proactive step also serves as a key cost cutting practice.
Big Data can predict and avoid turnover
Not just recruiting, the whole employee life-cycle should be used to structure big data to determine peak performance and detailed aptitudes.
Have you ever found yourself wondering what keeps an employee engaged and productive? Analyzing employee data for diverse metrics like performance data, engagement data, productivity data and movement (promotions, between divisions etc.) data can provide precious insights about what keeps a worker motivated and inspired to work to his maximum capability. Believe me you’ll be surprised by people and their stimuli!
Big data is not rocket science. You can ask an outsourcing HR shared services provider like Open Mind Services Limited to start with analyzing the root cause of high turnovers and its underlying costs on the organization as the foundation of more detailed benefits of using big data and predictive analysis.