Big data has become a popular catch phrase in the media, with reports of businesses buzzing about the potential for using big data discovery software to boost profits by acquiring new customers and keeping existing customers.
But can analyzing reams of data about past employee performance help companies make better hiring decisions using big data discovery software instead of the traditional approach of relying on human resource managers?
Some companies are betting on big data discovery software.
Xerox, for example, is now using big data discovery software to choose the people to hire for its more than 48,000 open call center jobs. The company was able to slash attrition by one-fifth during a six-month trial using predictive analysis to choose those workers who are likely to stay in those roles.
According to the data, when screening potential applicants, personality matters more than previous work experience in hiring decisions. While creative people tend to stay on the job for six months – allowing Xerox to regain its $5,000 training investment in a worker – those who are more inquisitive tend to leave earlier.
“For more and more companies, the hiring boss is an algorithm,” the Wall Street Journal notes. “The factors they consider are different than what applicants have come to expect. Jobs that were once filled on the basis of work history and interviews are left to personality tests and data analysis, as employers aim for more than just a hunch that a person will do the job well.”
Employers are using data to predict how long a prospective employee will stay in a position and if that worker is likely to file a disability claim or steal from the company.
Xerox is part of a growing number of companies using big data discovery software to bolster their abilities to predict the future when it comes to human resources issues. Companies are “reducing labor costs, improving productivity and employee effectiveness and managing risk more effectively” by using workforce analytics, according to a recent study by Deloitte.
Deloitte Consulting’s national leader of human capital, Nicky Wakefield, tells Consultant-News.com that advanced analytics and big data discovery software help companies look deep into their workforces to predict which employees are most likely to advance.
“In our fast paced business environment, organizations need predictive solutions that help address critical business issues before they actually become problems,” she notes.
But as companies rely more heavily on data to guide their hiring decisions, some have questioned if this practice opens the door for discrimination. Some experts say the practice is legal as long as the analysis doesn’t intentionally discriminate against job applicants based on traits like race or gender, according to the WSJ.
However, enforcement agencies also have taken note. In fact, the Equal Employment Opportunity Commission has released a draft enforcement plan that gives the highest enforcement priority to claims of systematic discrimination in hiring – including pre-employment tests that use past performance data to rank candidates.
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