How Analytics Can Highlight Recruiting as a Strategic Function

How Analytics Can Highlight Recruiting as a Strategic Function

Emily Smykal

The application of analytics in everyday business functions is accelerating and HR, more specifically recruiting, needs to keep pace. The rise of big data cannot be overstated–we produce 2.5 quintillion bytes of data (1018) every day. Data comes from everywhere, and is used by just about every corporate division. So for recruiters, it should not be an issue of whether to use data, but how.

For some HR departments, it’s still a matter of getting started with analytics, and catching up to the competition. Others are ahead of the curve in terms of HR maturity and technology. Regardless of where you fall on that spectrum, you can be sure that every other department in your organization is using data to make decisions. In order to gain credibility and clout within your own business, your talent acquisition strategy must become data-driven, too.

The recent report from Salesforce Research, 2015 State of Analytics, sheds more light on the growing importance of analytics among business leaders today. The study was conducted in mid-2015, based on over 2,000 responses from enterprise business leaders, and covered the U.S., Canada, Brazil, UK, France, Germany, Japan, and Australia.

The results from Salesforce show the trajectory the broader business environment is taking with analytics. Senior leaders have grown to love hard evidence packaged into neat charts produced by their analytics teams. Data has become the driving force behind many business decisions, and it offers perhaps the most direct route to the boardroom. If HR can follow suit, talent acquisition leaders can use analytics to boost their team’s credibility.

In this post we’ll discuss the hurdles HR leaders face when it comes to analytics, and how to overcome them.

The Disconnect in Perceptions and the Lack of Data

There are two main hurdles HR leaders face when it comes to applying analytics to their practices: the perception of HR as people-focused (as opposed to data-focused), and the lagging uptake of data within HR departments.

The traditional view of HR is based on human relations–before, during, and after the hiring process. Talent acquisition leaders need to overcome this structure without destroying it entirely. The recruitment and development of employees can’t adopt a data-driven approach without ignoring the people it applies to. So a shift in the perceptions of HR, how it works and the purposes it serves, must take new data practices into account while maintaining a people-first approach.

This is where the second hurdle becomes an issue for recruiters–they trail most of their colleagues in other departments when it comes to applying data analytics to their practices. Mathematical and analytical skills have traditionally been crucial to utilizing the latest technology in data. However, talent acquisition leaders who are willing to stand behind the power of data, and replace outdated HR systems with new more intuitive data analysis tools will allow their teams to catch up with their colleagues and use analytics to demonstrate their strategic business applications.

Trends in Business Analytics

The Salesforce report found a 20% increase in the number of data sources actively analyzed by corporations in the last five years. They project that number will increase rapidly, by an additional 83% by 2020. The top performing enterprises from the study could rely on up to 50 different data sources by 2020, and it’s highly unlikely this won’t include any recruitment metrics.

And with so many metrics vying for attention in the boardroom, the obstacles to obtaining useful analytics should be on every HR leader’s mind. According to the report, 53% of respondents blamed the manual processing of data as the biggest challenge when analyzing data today. An equal number pointed out the sheer volume of data, decrying the amount of data that goes un-analyzed because they simply can’t handle it all.

In this case, the delay in data-driven tactics among recruiters could actually be a positive thing. Early adopters of analytics have exposed many of the problems that come with incorporating big data into decision-making. HR leaders can now identify the best tools and the most important metrics for their teams.

What This Means for Recruiters

As more decisions are made based on better analytics, recruiters should focus on the key metrics that tie recruiting performance to business performance. For example, a recent survey from MIT and IBM found that businesses investing heavily in HR analytics saw 8% higher sales growth and 58% higher sales per employee. These are exactly the kinds of results talent acquisition leaders should be presenting in the boardroom (if they had the opportunity).

Metrics like cost per hire can provide an economic value for the resources required to hire new employees. An HR leader who can demonstrate the level of investment that provides the best outcomes for an individual organization’s staffing needs will surely gain credibility among his or her colleagues. Or consider quality of hire, a metric that explains the value of new employees to the company. HR leaders can use this data to explain the effectiveness of their recruitment team, as well as the on-boarding process.

Regardless of the analytics you focus on, and the tools and staff that bring the data together, promoting HR’s status as a strategic function of the business should be on the top of your mind. By presenting useful data in clear, concise ways anyone in the organization can understand, talent acquisition leaders can move closer to gaining a spot at the table and command greater resources for their data-driven recruitment strategies.

Interested in recruiting analytics and the future of big data in talent acquisition? Sign up for the Data Driven Recruiter blog.

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