Predictive analytics, which help businesses predict demand for their products and decide how much raw material they will need, can also help recruiters and HR professionals hire more efficiently. But just the term "predictive analytics" is enough to send some people running for the hills.
According to "Predictive Analytics Improves Staffing and Retention" by Jac Fitz-Enz, "Predictive analytics is a logic process that leverages business intelligence (BI) tools such as data mining and statistics to make predictions of future events. The predictive analytical model enables HR departments to be ahead of the curve in identifying staffing and performance opportunities and to anticipate problems before they happen."
What can predictive analytics tell you?
In theory, predictive analytics can take the guess work out of hiring for recruiters. With enough data, software can tell you where to look for your next candidates and make predictions about their success as employees. It's not an exact science, but blogger and SPHR Tim Sackett, told ZoomInsights these tools can give you insight into your potential employees, such as how a candidate will perform, turnover risk and engagement level.
Which companies benefit most from predictive analytics?
As with any statistical analysis, the key to accuracy is in having a big enough sample to draw from. If you're a small firm, employing this particular strategy may not be for you.
So who should be turning to predictive analytics to help make hiring decisions? "Industries that have high-volume hiring and large numbers of employees," Sackett said. "Predictive analytics rely on data to tell a 'predictive' story: If you only have three data points - let's say three hires from Google and two out of the three hires were great hires - what is the data really saying? Sixty-six percent of hires from Google are great! Do you really believe and trust that number? For the data to have validity, you would need more data points to truly have confidence in what it was measuring."
In other words, you need a large data set from which to draw your conclusions in order to have any real success with predictive analytics. Big companies with long recruiting histories will probably have the best results with this particular technology.
When do you use predictive analytics?
Even under the best conditions, the hiring process can be a long one, and there are many tools that can be used at different points in the journey. But using predictive analytics is an on-going process, and the more data you collect, the better the resulting predictions will be.
So when do you start? "Hopefully from the beginning - one reason major organizations would incorporate the use of predictive analytics would be to reduce the time of their hiring process and lower the overall cost by having a higher quality of hire," said Sackett. "This starts by analyzing things like source of hire, where your best hires are coming from - organizations, schools, demographics, etc."
Using software to help pull resumes that match criteria for historically successful candidates can help speed the process along and save time and money in the meantime. It might also help you beat your competition to the best candidates.
Predictions, by nature, aren't exact. Even software can't be right all the time, but if you correctly deploy this technology, it can significantly improve your recruiting outcomes. In a competitive marketplace, every advantage helps.
When you learn from an analytics package the attributes of the best candidates, ZoomInfo Pro can help you find people who match those attributes. Learn more.