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CHICAGO--Data analytics is a secret weapon that many human resource professionals don’t realize they have at their disposal. Used correctly, analytics can give employers a competitive advantage in the war for talent and offer HR practitioners a new way to understand the wants and needs of their employees.
“The movie ‘Moneyball’ was a hit and we found it so captivating because it challenged our assumptions of what good actually looks like,” said Cecile Alper-Leroux, vice president of product strategy and product management for Ultimate Software. She led a Monday morning concurrent session, “HR’s Secret Weapon: The Power of Analytics,” at the Society for Human Resource Management (SHRM) Annual Conference & Exposition.
She said the movie, which is based on the best-selling book Moneyball: The Art of Winning an Unfair Game (W.W. Norton & Co., 2003), provides one of the best examples of how data analytics has radically reshaped the way we understand how organizations work.
The book and movie chronicle how Billy Beane, general manager of the Oakland Athletics baseball team, used what many people now call “big data” to analyze and predict the performance of baseball players. By analyzing nontraditional statistics, Beane assembled a competitive team that cost one-fourth of the player salaries paid by the New York Yankees. Beane’s Oakland team ended up winning the same number of games as its New York rivals.
“With data analytics, you can understand people and what their strengths and weaknesses are and end up with some great results like lowering labor costs and raising productivity,” said Alper-Leroux.
She discussed how Google has taken data analytics and turned it into an art form. Google’s top management is analyzing HR data to raise the company’s understanding of its people.
“The result has been that Google is consistently named the best place to work in the United States and has one of the most engaged and productive workforces on the planet,” she said.
Wal-Mart is making similar efforts to understand the needs of its workforce. Wal-Mart’s goal, she said, is to know as much about its people as it knows about the products it sells.
“Several new studies have found that CEOs now rate HR analytics as the most important new information source,” she said. “So much data is now available, and there’s new software every day that can give us valuable insight into this data so that businesses can tap into this information and make well-informed decisions.”
Up to this point, most businesses have used data to react to the latest trends and shifts in demographics. Now, Alper-Leroux said, organizations are starting to turn to models that not only look at why things are happening but also examine what might happen and when it could happen.
“We’re now looking at data discovery and how to make it more available to HR,” she said. “And this is an incredibly powerful tool because the mindset is changing from ‘How should I react to changes?’ to ‘What can I do to change these predictions?’ ”
Alper-Leroux cited a large retailer that used data analytics to predict which employees were likely to stay and leave. Later analysis showed that 87 percent of employees who were predicted to leave had resigned from their jobs within a year.
“This is a very powerful tool because if you can predict with nearly a 90 percent accuracy rate which employees are likely to leave the company, then you can target those people who you don’t want to lose and retain the high-performing workers you want and need,” she said.
Bill Leonard is a senior writer for SHRM.
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