With an unemployment rate at 4.1 percent, the U.S. labor market is becoming something akin to the Hunger Games for hiring firms. Competition for talent will be among companies’ top challenges this year — and not just because the labor market is tight, according to a recent article by Beth Zoller, legal editor at XpertHR, "The Top 15 Most Challenging HR Compliance Issues for 2018."
“Workers today do not have the same sense of loyalty to an employer as they used to in the past,” Zoller said. “The gig economy is heating up and in certain fields people are coming to realize that they don’t necessarily have to work for an employer — they can get paid better if they work for themselves.”
Add other such trends as telecommuting to the mix and “employers are really being forced to take a long, hard look at their workforce and do what it takes to make them feel welcome.”
It is a situation, some might say, tailor-made for talent or people analytics. For those not well-versed with this particular flavor of analytics, talent analytics is a predictive-based software that helps companies make decisions about its workforce such as deciding which prospective hires would make the best fit. A lesser-known benefit of the application, though, is it can also help companies figure out how to offer the best incentives to the talent they want to attract, and perhaps more importantly, to keep the talent they already have.
“HR analytics can be the secret weapon that HR deploys to retain the right talent, which results in a measurable contribution to core business objectives,” such as increased revenue, customer satisfaction or market share, said Tammy Cohen, chief visionary officer for InfoMart.
Related Article: Talent Analytics: What It Is and Why It Matters
A New Focus in Employee Onboarding
As one example, Patrick Downes, assistant professor of Human Resource Management at Rutgers’ School of Management and Labor Relations told of an organization that did an analysis to identify who was likely to stay through a 90-day probationary period. “They found that people who immediately elected to participate in a 401(k) retirement plan were much more likely to stay past the 90 days compared with people who didn’t elect to participate.” As a result, the company shifted its onboarding process to talk more about the retirement benefits up front, Downes said.
Talent Analytics Prevents Flight Risk
Talent analytics also have the capability of spotting flight risk — that is, it can help identify which employees are likely to leave, Downes continued. For instance, the system might be able to tell from the data that someone is having a bad experience in her work group — for example, she is showing up late or leaving early whereas before she was very punctual. There are a number of reasons why this employee might be slacking off, from a loss of interest in her job to possibly something more dire, such as harassment. Whatever the reason, “there is something in the data that is indicating this person might leave — and that it is fixable if the organization knew about it,” said Downes.
Pinpointing Problem Areas in the Workforce
The beauty of talent analytics is that it also provides a broader picture of what is happening at a company and can delve into the root causes of negative trends, said Dave Weisbeck, chief strategy officer with Visier. Consider a company that wants to understand why employee engagement is low, a process that requires a fairly sophisticated level of analysis, he said.
“You’re looking at your engagement data and you’re going to want to correlate that with other measures and other inputs around your workforce. You’re going to want to see if low engagement really is an issue. And you might look to things like turnover to try to understand that your engagement is leading to you losing people or is driving down productivity,” Weisback said. “Then you are going to look for root causes. Why is engagement low and is it low everywhere? Are there pockets of engagement that are areas where we can narrow and focus?”
It may determine that it’s not that people are bored with their jobs or hate the company but that compensation is actually the heart of the low engagement. At another company the same process might determine that the low engagement is in fact a lack of leadership development opportunities and people feel their careers have stalled — it all depends on the data and the people. “These are not simple transactions,” Weisbeck said.
Connecting People Analytics to Business Outcomes
More sophisticated companies are pursuing a higher level of talent analytics use, Weisbeck continued, which goes beyond understanding who is likely to leave or who should be considered for promotion. Rather, these companies are making connections between decisions on people and business outcomes. “And some of these can be profound,” Weisbeck said.
In the healthcare space for example, questions are being asked about whether among the staff, the right levels of experience, the right training and certifications can make a difference in patient outcomes, he said. “They are looking at such factors as how tired people might be and when their schedules are, then putting all those factors together to determine what gets the best patient outcomes.”