We’ve heard endless amounts in recent years about the purported benefits of big data for business. It’s not always easy to separate the hype from the everyday reality. We’ve already seen, however, technologies from HR software to AI intersect with the big data revolution and change the way firms operate.
It seems safe to say that the pace of this change isn’t going to slow down any over the coming years. So, the question we’re now faced with is how other aspects of the business are likely to be transformed by the advent of big data.
What exactly do we mean, though, when we talk about big data? In short, big data involves the collection and analysis of large quantities of data. The arrival of many new tools and technologies–most notably AI-driven processes–has enabled us to make much more effective use of this information.
Without these software tools, we wouldn’t be able to make sense of the data we gather to anything like the extent we can today. The effects this is having are proving to be revolutionary, affecting everything from omnichannel customer service practices to the provision of healthcare. Scarcely any industry has been left untouched.
Human resource management is just one of the areas that’s seeing a wholesale transformation as a result of big data. Of course, HR is already well accustomed to the deployment of technology across a whole range of areas–including, for example, applicant tracking software and employee timesheet functions.
The rise of big data looks set to accelerate these processes even further, providing HR practitioners with a whole host of potential benefits. As well as simplifying HR processes, big data could provide us with an exceptional level of insight into what we do, changing human resource management completely.
Here, we’ll look at how big data is likely to affect human resource management and what its potential benefits might be for the sector. Read on to find out more.
What does big data mean for human resource management?
The most obvious benefit that big data could have for HR management is its potential for more precise judgments. Although HR has long been making use of hard data, it’s true that the niche often still involves hunches and gut feelings. Such as about the applicability of employee experience and the suitability of applicants for particular roles, or how employees are performing, for instance.
The arrival of big data means that many of these hunches can effectively be replaced by quantitative measurements. That’s not to say that HR managers themselves can be replaced, of course. It’s just that having more data at their disposal and being able to understand it better, can help them make better calls.
With big data, human resource management has the potential to make businesses and other organizations more efficient. That, in turn, can help them reach their goals more effectively. We already know, of course, what a challenge it is for businesses to keep all of their costs in check.
Big data allows HR managers to make their own contribution to keeping these costs reined in. That’s as well as helping the business as a whole to meet its wider goals, and thus making their own jobs that bit easier.
Benefits of big data for human resource management
So, we’ve outlined what big data is and what it can do to make human resource management simpler, more effective, and more efficient. Now we’ll move on and discuss the exact benefits it may have for HR management.
It goes without saying that, ultimately, business is all about the bottom line. If your firm isn’t financially sustainable, its long-term prospects are probably pretty bleak. Big data can have a significant effect on reducing costs and helping to ensure profitability through improving efficiency.
This includes in the area of human resource management. Utilizing big data can give HR managers an array of clearer insights into how the workforce is performing. By providing not just more finely-grained data but also visualizations, big data could have a remarkable impact by trimming costs and enhancing efficiencies. This could free up resources for investment in other areas, such as conference call services.
Hiring can often feel like something of a gamble. Sure, we can look at applicants’ past experiences and try to ascertain their personal suitability for particular roles during the interview process. However, this is never an exact science and it again relies very largely on hunches.
Big data analytics can help to eliminate much of the doubt, by mapping skill sets in greater detail. That enables firms to make better informed, evidence-based hiring decisions. What’s more, big data could also make the recruitment process much more efficient than it has been hitherto.
The same data analytics processes can effectively sift through hundreds of applications, isolating keywords, and relevant skills so that the best-suited applicants can be fast-tracked.
In addition to helping firms make better-recruiting decisions, big data could also help them hang on to the employees they’ve already got. High staff turnover can be a major problem for employers. It can be destabilizing to the wider team and affect morale when valued colleagues leave.
What’s more, recruiting suitable replacements is difficult and expensive (it’s also not always possible to find a replacement who offers a comparable skill set and experience).
Big data analytics provides a more detailed picture of how employees perform at work. That allows their employers to target them with rewards and incentives which will help to keep them on board.
For instance, AI-driven pattern recognition of performance data could ID an employee minded to leave the company. The HR department is then able to approach them with the offer of a raise to stop them from taking their skills elsewhere.
Freeing up resources
There are lots of processes at work that are currently very labor and resource-intensive. Big data potentially allows us to at least partially automate many of these processes. Aspects of work as diverse as dispatching orders and managing payroll can all benefit from automation with the help of big data.
This could allow HR to put the workforce to more efficient uses, facilitating improved workforce management. This is all part of the wider effort to help companies reach their aims and objectives, and it could provide these firms with a crucial advantage over their less nimble and adaptable rivals.
More objective decision making
While human resources managers do their very best to be as objective as possible, it’s always difficult to float above the fray of office politics. Conflicts of interest are commonplace, and HR managers may come under pressure themselves in this regard.
We’ve already talked about how big data analytics helps to do away with reliance on gut instinct and hunches. It can also help to circumnavigate conflicts of interest at work, allowing HR managers to make decisions based firmly on solid data.
They can point to this data as hard evidence to underpin the decisions they make. That allows for greater accountability both to senior management and any individual employees who feel they might have been hard done by.
More accurate forecasting
Hitherto, making rock-solid, accurate predictions have been the bane of human resource management. Of course, it’s extremely difficult to make forecasts with any degree of cast-iron certainty when you’re reliant on judgment calls and gut instinct.
By putting so much more data at our disposal and helping us to understand it better, big data can allow for much more accurate forecasting. HR managers could, for example, be able to anticipate changes in hiring needs and general market conditions more effectively. That would allow them to make more insightful recommendations on the back of this information.
Sam O’Brien is the Senior Website Optimisation & User Experience Manager for EMEA at RingCentral, a global UCaaS systems provider. Sam has a passion for innovation and loves exploring ways to collaborate more with dispersed teams.