Predictive Analytics Can Help Companies Manage Talent

Crystal balls might not exist, but that doesn't mean companies don't have the ability to gaze into the future.
Hidden among hiring choices, performance reviews and emplovee engagement surveys are patterns that can neip
employers make strategic, evidence-based decisions about the future. The trick is knowing how and where to
look.

Etfectively engaging in predictive analytics-using past and present data to foretell future
organizations make hiring decisions, anticipate skills shortages, head off employee attritioneventsS-can
and react to
help
the next
major disruptive event.
Allof that explains why the use of predictive analytics has grown by almost 50
according to a 2022SkyQuest Technology survey. Business leaders who percent in the last three years,
use workforce
better understanding of their talent needs than those who don't, and they are more analytics say they have a
function. satisfied with their overall HR

Yet the survey also revealed that 42 percent of companies aren't using
missed opportunities and the continuation of wrong workforce analytics at all. That can lead to
assumptions.
HR leaders at CUNA Mutual Group, an insurance company based in
how valuable regular reviews of their company's diversity, equity Madison, Wis., recently discovered just
and inclusion (DE&I) metrics could be. While
looking at their hiring processes, they came across an unexpected reason for why
candidates of color as expected. they weren't drawing as many

*The analytics helped us understand that we were seeing a different cycle

when candidates of color were applying," says Linda Nedelcoff, between when a job was posted and
executive
human resources officer for the 4,000-employee company. "They were vice president and chief strategy and
cycle." generally applying later in the posting

By reviewing the data, the HR team learned that they may have
unintentionally been excluding some candidates
of color by building job candidate lists too soon after posting a job opening.
hiring managers to make some immediate changes: post job openings to sitesThat introspection led them to ask
that attract more people of color, in
addition to using general job boards; leave each posting up for a minimum of two weeks; and
candidate pool as a whole, no matter how each person discovered the job opening. consider the entire

As a result, CUNA Mutual Group's hiring rate for people of color now exceeds industry
says.
benchmarks, Nedelcoff
*Don't be afraid to look back in your rearview mirror every once in a while," she says. "The foundation is so
important. If your foundation isn't as strong as you think, you might build something unintentionally."
Organizations of all sizes can benefit from studying their past and present data and using it to anticipate what the
future may hold and how they should react to it. It's important to note, though, that predictive analytics doesn't
simply mean perpetuating past patterns into the future.
That's only a good practice if you think your organization is perfect," says Heather Whiteman, who specializes
in people analytics as an assistant teaching professor at the University of Washington and has held HR executive
roles. If youthink your organization is not quite where you hope it should be, then take every predictive
analytics model under the assumption that this is what led to where we are and not where we want to be."

Smarter Hiring
For many companies, hiring and growth are natural starting points for using predictive analytics, because these
HR functions are considered critical to business strategy. In fact, 83 percent of talent leaders say hiring has
escalated from an HR priority to a business-level priority, according to a 2022 Talent Acquisition Trends
study by Lighthouse Research & Advisory, an Austin, Texas-based company that uncovers key trends and
technologies in HR.
 "Because of that elevation of HR leaders, they are in front of a brighter spotlight than ever before and they need
tohelpknow what's going on," says Ben Eubanks, chief research officer for Lighthouse. "Predictive analytics can
them."

It'snot enough for HR to simply know their headcounts. Instead, HR leaders are often expected to anticipate
future skills needs and identify attrition concerns and solutions. In a modern workforce, that means organizations
should make hiring decisions based on the skills needed not just for today's employee, but also for tomorrow's
new recruit.

"Organizations should be hiring for capabilities,not just past performance," Whiteman says.
She recommends considering qualities such as adaptability, creativity and interest in learning because these
attributes could signal that a prospective employee-or an existing onewould be able to thrive in a
environment. That's key, considering half of global employees are expected to need to upskill or reskillchanging
by 2025
to perform new job duties and use new technologies, according to research from the World Economic Forum.

Traditionally, though, organizations have focused on hiring new employees based on their fit for the role at hand.
And they do so largely by comparing candidates' resumes and interviews, says Eubanks, author of Artificial
Intelligence for HR: Use Al to Supportand Develop a Successful Workforce (KoganPage, 2018).
Predictive analytics, however, can potentially provide much deeper insights by comparing ajob candidate to a
profile of an organization's top employees. Companies can build a model of an ideal" employee based on the
skills, attributes and experience of employees who have thrived at the organization.

The idea isn't to create a team of cut-and-paste copies, but rather to identify some of the traits that could allow
employees to excel in aspecific organization. Then recruiters can use this model, combined with technology
such as applicant tracking systems, to help refine a list ofjob candidates.
In atight labor market, that can make allthe difference by shortening time-to-hire and finding candidates who
are more likely tosucceed and stay. However, organizations need to be carefulto avoid perpetuating bias in their
hiring and promotion practices, Whiteman says. For example, in the past, the majority of a company's most
successful managers may have predominantly come from a specific background. But that assumes that over the
years, everyone has been given similar opportunities, which often isn't the case, she explains.
She recommends that HR leaders use a simple technique to determine whether their approach is fair: Ask "why"
five times to test hypotheses and help uncover the true reasons behind the results. Developed by Japanese
industrialist Sakichi Toyoda, the *5 Whys" technique helps get tothe rootcause of a problem. If a deadline was
missed, ask why. After the first answer, ask why again. Keep it up to get to the real problem.

RetainingTop Talent
Hiring an employee is, of course, only half the battle. The other key consideration is how to keep them.
Employee retention is an area where companies can make good use of predictive analytics.
Data that most HR departments or organizations already track-employee engagement levels, time since last
promotion, performance review ratings- can be plugged into predictive software to help identify factors that
point to employees who are "flight risks." Identifying why employees are likely to leave a company can help HR
take measures designed toprevent them from leaving. In the long run, that can save companies money on hiring,
training and lost productivity.
Making small changes toHR processes can help counter some common reasons employees are likely to leave a
job. Take dissatisfaction with compensation and lack of interaction with their manager, for example. Eubanks
recommends organizations look at tools they can introduce into the manager's workflow to remind them to check
 in on their employees. *Managers are busy. They're pressed for
sime. And so you can use a tool that gives them a nudge," he says.
It might call out that they haven't had a one-on-one with a team ROADBLOCKS
member in two months or that the person hasn'thada pay change
in two years and is now below the benchmark for the position, What do business leaders say
Eubanks explains. are the biggest obstacles to
A recent Gallup survey proves how powerful it can be to have using analytics?
managers regularly engage with their employees. While only 1 in 3
global employees strongly agree that someone has talked to them
about their progress in the past six months, employees who receive
meaningful feedback at least weekly are half as likely to be on the
Lack of budget 40%
lookout for a new job, the survey results show. Lack of skills 39%
Whiteman cautions that predictive attrition models should focus on Lack of data 31%
larger groups, such as teams and departments, rather than solely on
individuals. Singling out a specific employee as being at risk of Multiple answers were allowed.
leaving could turn that prediction into a self-fulfilling prophecy. A
manager who believes John Doe is looking to leave the company Source: SkyQuest Technology survey,
2022.
might suddenly start treating John differently by, for example,
withholding a promotion or not assigning him critical work. These
factors could cause John to want to leave the company if he wasn't
already considering it.
*If it's done at the individual level, it can harm the individual,"
Whitemnan says. *And what's wrong with trying to preserve
everyone on your team versus just one person?"
BATTLING BIAS

Many people believe that the best predictor of future behavior is

past behavior.

But it can be a major mistake for HR leaders toassume that

employee behavior can be explained and predicted based solely on
what has happened before.
The ethical piece is that if you're making decisions about people
and you're using those data points, you have to understand what people are thinking and feeling," says Ben
Eubanks, chief research officer for Lighthouse Research & Advisory, based inAustin, Texas.
The best way to use predictive analytics is to marry data drawn from many sources with human insights,
according to Michael Moon, director of people analytics at Viasat, aglobal communications company with 6,850
employees based in Carlsbad, Calif.
"You need to gather multiple sources of evidence and conscientiously and judiciously evaluate that evidence for
itsvalue and usefulness," Moon says.

Otherwise, it can be too easy to perpetuate past biases into the future. Small sample sizes and poor handling of
missing data can lead to high risk of bias in prediction models powered by machine learning, research shows.
Such could be the case when organizations decide whom to promote, says Heather Whiteman, who focuses on
people analytics as an assistant teaching professor at the University of Washington. Many organizations rely
heavily on performance reviews and feedback from an employee's manager, yet that person may not always be
the best equipped to assess the individual's performance, Whiteman says.

That's why she recommends that companies conduct an organizational network analysis to learn who works
with whom and have those people weigh in on performance.'
 Companies also should have specific policies about how they use and protect the data they collect on employeeS.
For example, Moon says, if an organization uses employee monitoring software to assign
scores, HR should track the data but should not tellemplovees and perhaps employees produetiviy
not even their managers-the
scores. That's because true productivity can't be measured solely based on how long employees spend on
"provable" work, and reliance on such scores can wind up stigmatizing or demoralizing employees rather than
motivating them to work harder.
And while some employees may appreciate data-driven insights about themselves,
revelations intrusive. Whiteman recommends that HR professionals take a don't beothers may find the
creepy
deciding how to use the data they' ve collected. approach to
If you ask yourself, Is it creepy? and you pause at all, don't use it,"
she says. K.R.

Where to Focus
Despite strong buy-in from business leaders, only 20 percent of
organizations are using analytics extensively, the
SkyQuest survey found. The main obstacles cited are a lack of funds, a lack of skills and a lack of data.
These struggles can be experienced by companies both large and small. Larger
by too much data, while smaller ones may not have enough data from companies may feel overwhelmed
which to draw useful conclusions. For
example, looking at historic data on why female managers leavea company may not be
companies that have had only a few female managers. But there are steps HR can take toparticularly useful for
address these issues.
For companies that might not have the money to hire analytics experts or
purchase new software, Nedelcoff
recommends checking in with other departments in the company or with contacts
who have had success using analytics. For CUNA Mutual Group's HR in professional organizations
technology being used by another department for HR's purposes. department, that meant adopting
"Our options were: We could go out and buy and build the perfect tool, or we could
tool]and customize it for our own purpose," Nedelcoff says. "We decided to leverage[use an existing company
resources even though they were originally designed for customer solutions." existing company tech

As a bonus, the work of vetting the software had already been done.

It can also be useful to focus on using predictive analytics in a few key areas, instead of trying to make forecasts
for multiple areas all at once.

Think about your most important strategic initiatives. During the pandemic and Great Resignation periods,
hiring analytics have been really important," Nedelcoff says. "Rather than wide breadth, our company focuses on
the most critical and then focuses on the next critical. But if you have larger capability and capacity, you might
focus on three to four streams.

CUNA Mutual Group chose to focus on using predictive analytics for planning DE&I efforts throughout the
company.

The company also relies on analytics to evaluate and customize how it trains managers. HR leaders combine
behavioral science principles with behavioral analytics for individual managers to determine which managers
would appreciate what types of training at what stages of their careers.
"Often, we give managers a lot of training when they're new, and much of it won't be applied until a certain
moment in their career," Nedelcoff says. "What if we offer training when it's most needed instead? Maybe that
feature becomes more useful at the three-month mark, not day one. By studying scientifically, you can learn to
cater those resources to be much more beneficial for that period of time."

Above all, people analytics experts agree that it's important for businesses not to forget the human element when
making predictions about the future.
"Because these are people's lives and their livelihoods," Whiteman says, "everything needs to be for people, not
just about people."