The modern world is full of data, and everywhere you look people are coming up with new and innovative ways to use it. In the recruiting industry, that has come in the form of predictive analytics; using the information you have about your current and past hires to make better decisions about who to recruit in the future.
This, as might be expected, has changed the game in several ways. It’s always been a struggle to work out whether or not a candidate is worth bringing in for an interview based solely on their CV or application form. While analytics can’t give you the magic answer, it can provide you with a lot more information to solve it.
How does predictive analytics work?
“Organizations have a huge amount of data about their employees: their personal details, education, family background and so on. They also have data about employees’ performance and behaviors. Hence, they can correlate all these three dimensions to determine the typical profile of an employee who is likely to be successful with them.” - Aditya Narayan Mishra, CEO of CIEL HR Services But how does this change your recruitment process?
1. Predictive analytics cuts down on your cost-to-hire
Hiring new employees can be expensive. One study from Glassdoor found each hire in the US costs firms an average of $4,000, and takes them 24 days to fill the vacancy. The Society for Human Resource Management conducted similar research, and found the average cost-per-hire was $4,129.
However, using predictive analytics can immensely cut down on this. By using data to draw up a more detailed picture of who you’re looking for, you can complete the hiring process much quicker. This in turn reduces the number of hours it takes to complete all the tasks necessary for hiring the right person, reducing your costs.
2. It also eliminates useless sources
As well as having access to all this extra data, recruiters and HR departments also have a wide range of sources to choose from. For example, the rise of social media in the last decade has led to a whole new avenue for finding new hires, and now 79% of recruiters make use of social networks when searching for talent.
On the whole, job seekers love this. A recent survey from CareerArc found candidates prefer using social media when searching for careers over job boards, job ads, employee referrals, recruiting agencies and recruiting events. However, that doesn’t tell you whether or not these methods will provide your company with the right candidate.
However, looking back over your data can give you a good idea. For example, if you find that most hires made through recruitment agencies leave before spending six months in the job, but those made through social media stay for more than a year, you can clearly prioritize the latter as a source for new candidates.
3. And finds a better fit for your company culture
What’s the most important thing to look for when it comes to hiring a new employee? Most employers - 60% according to one study - would agree it’s company culture. After all, someone highly engaged with your business' ethos is likely to perform better and stay for longer, allowing you to train them up and make them even more valuable to your organization.
However, this can be hard to judge from a CV. There might be a few indications - being a die-hard Trekkie in an office full of Star Wars fans, for example - but generally, you will need to use data to find this out. Predictive analytics can be an incredibly useful tool for unearthing exactly what your company culture is actually all about.
For example, maybe people with qualifications in business or sales don’t stay on at your company, but those who’ve studied more creative subjects do. That not only tells you who is more likely to remain with your business, it also helps identify a key strength. In this way, using predictive analytics can make finding the right person surprisingly easy.