Big Data’s Powerful Impact on The Role of Human Resources

HR ACA Guidelines

Big data, along with its three key features of volume, velocity, and variety, is considered the foundation of modern analytical systems. As of 2013, 91% of America’s top executives have been planning big data initiatives.So what is big data’s powerful impact on the role of Human Resources?

As far as Human Resource purposes go, Google (a data-driven company) has developed a model that can predict promotions with 90% accuracy. Other managers, however, have not been able to use the big data/HR equation because people are not ready to hand over control to the computer.

Big Data’s Powerful Impact on The Role of Human Resources

So just how is big data affecting Human Resources and how will it in the future? Let’s explore that!

Big Data for Human Resources

If Human Resource teams were to use a statistical model based on big data, that would mean “replacing presumptions with validation, hunches with data, and intuition with success ratio.” Talent scouts often face a significant challenge when structuring large quantities of different data that needs to be evaluated against a unitary scorecard. Big data offers a solution to that by employing methods specially designed for variety.

Potential Benefits of Big Data

Big data could provide some serious benefits in the Human Resource sector. These benefits include:

Decreasing the cost of bad hires

  • Big data can help cut down on poor hires.
  • Wrongfully chosen employees can cost much more than just their salary and benefits:
    • Recruitment costs
    • Training expenditures
    • Productivity loss
    • Negative client reviews
  • A primary challenge of Human Resources analytics is using big data to predict a match between candidate skills and personal beliefs against company needs and values.

Increasing retention rates

  • Big data algorithms nominate individuals by studying employees’ online activity, profile updates, employment history, job performance, and payroll data
  • Employees that are red-flagged by the algorithm could be given a raise, a more challenging role, or more training to prevent resignations
  • Companies that already do this, including Xerox, Walmart, and Credit Suisse, have seen retention increase as much as 20% with these algorithms.

Performance prediction

  • When you are hiring, big data Human Resource analytics models can help you find the best candidate profiles based on the job’s requirements and existing top performers.
  • They do this by using existing records of successful candidates to create high performer profiles which you can use as to create a targeted head-hunting tool to send personalized messages to the right talent.
  • Predictions are necessary to evaluate future job openings, promotions, and even layoffs, and aligning models to your business strategy can help you use big data to save time and money on recruitment.

Improving benefits packages

  • Using big data similar to insurance companies, employers can gather health-related data of their staff and candidates to create more attractive and useful packages.
  • Keep in mind that you should be transparent about collecting such data, stating your final goals to avoid legal issues related to discrimination practices.

Legal and Ethical Issues of Big Data

Although there aren’t any legal statements against using big data for HR analyses and evaluations, ethical concerns are still a factor to consider. Privacy is a pressing concern, and many people are afraid that the numbers could work against them and even encourage discrimination.

Of course, stereotyping and unfair treatment of an individual outlier based on the general performance of a group is not acceptable in the business sector and is an unsolved problem that could result from using big data with Human Resources. That is why it is essential to keep in mind that algorithms do not have intuition and are unable to assess undocumented progress, which is where Human Resources representatives come in.

Just make sure to keep everything as transparent as possible and continue to work within employer/employee laws and guidelines when utilizing big data for HR purposes.

So what do you think? Will you begin using big data to improve your Human Resource department and the reliability and productivity of your employees? Do you use it already? We would love to hear all about it – just leave us a comment below!

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