By Jeff Haynes, VP HCM Transformation, Oracle
The US unemployment rate is at its lowest since 2001’s 5.5 percent. There are 11 million people looking for work, per the U.S. Bureau of Labor Statistics. But, 5 million jobs remain unfilled because it is highly unlikely that those two unemployed external candidates for every available job will have the critical skills your company requires. Talent constraints result in lost business opportunities (to the tune of $160 billion in lost GDP in the US alone). The pressure is on for HR and business leaders to understand their workforce data as they attempt to fill critical roles from either a finite and talent-depleted source pool, or develop and manage current employees.
No wonder the recent Bersin by Deloitte survey identified the need to accelerate leadership development at all levels, and employee retention and engagement as the top issues for business and HR leaders. One tool HR is increasingly turning to is talent analytics – tying workforce data to real business outcomes.
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Most organizations are just starting to use data analytics. More than a third of companies actively use analytics to develop talent, predict performance and forecast workforce trends, but only 15 percent of companies feel they have strong capabilities in this area. Business leaders are learning that companies with mature analytics capabilities are two times better at recruiting and developing leaders and more importantly, are three times more likely to see cost reductions and efficiency gains. Leveraging talent analytics to drive business outcomes could be a real market differentiator.
HR tends to react after something has already happened. But what if companies could use predictive talent analytics to anticipate what was coming before it actually happened? Every business has had talented employees quit unexpectedly. New technologies are making it possible to avoid the high costs of those losses—in recruiting expenses, lost productivity, decreased institutional knowledge, and impact on the staff members who stay. Now companies can proactively identify those employees most likely to leave by sifting through an unlimited number of variables—salary increases, new opportunities, or time off—that would decrease the likelihood of losing those employees. Predictive analytics can provide “what if” scenario modeling of the possible actions that might help to ensure employee retention—and also improve the odds that high-performing employees continue to grow and contribute to the organization.
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Organizations that succeed at talent analytics view data through the lens of a scientist. Scientists test hypotheses, and that’s exactly what HR should be doing. HR leaders need to gather anecdotes and opinions from executives and managers, then collect and analyze the data to test the validity of those opinions.
HR leaders are differentiating themselves by becoming proponents of talent analytics in their organizations and bringing the skills and tools needed to provide relevant, provocative, consumable workforce analysis and information to their executives. This is the business intelligence that will help companies make fact-based decisions that drive business results.