3 Reasons Investing in HR Data and HR Analytics is Important
Towers Watson recently released their HR Service Delivery and Technology Survey. The Towers Watson survey shows that spending on HR products and technology is increasing for the first time since 2011.
The top three areas for HR technology spending, according to the survey, include:
- Talent Management
- HR Data and Analytics
- Integrated talent management and compensation
The investment focus in HR Data and Analytics is notable. Unlike other corporate functions like IT and Operations, HR has not had the analytical tools and decision science to easily quantify investment opportunities. Technology, through improved software tools and reduced cost of data, is changing this. For HR leaders responsible for pre-employment hiring and assessment, investing in HR Data and Analytics is important for three reasons:
1) Investing in HR Data and Analytics will help create transparency.This allows HR leaders to gain visibility into processes and results that used to be murky. For example, which recruiters deliver the highest candidate quality? Are the most engaged employees also the best candidates? Which trainers take similar talent pools (i.e. new hires) and get superior results compared to their peers? The result – HR Leaders will be able to better justify additional investment in HR tools and services.
2) You will gain improved monitoring by investing in HR Data and Analytics
HR Leaders will be able to monitor the inputs and outputs to their pre-employment hiring processes and post-hire processes to track progress against benchmarks and be alerted when goals are not met. For example, monitoring the steps in your fill rate process will allow you to compare the number of candidates meeting your quality of hire thresholds compared to your benchmarks based on historical data.
3) HR Data and Analytics tools allow you to forecast the future
Using historical data and current trends, HR leaders can ask “what if” questions to determine potential business impact. As an example, consider the impact on revenue performance by being able to adjust the pass rate during the assessment process. With the right analytics portal, you will have candidate data, current scoring model data, and performance data. Tweaking each of these inputs will allow you to compare the trade-off of a lower pass rate, recruiting impact, and revenue gain to see if the change is sustainable in your business.