How to use talent analytics in the hiring process

How to use talent analytics in the hiring process

Our blog How to use talent analytics in the hiring process
Talent analytics

In 2017, The Economist boldly declared data as the new oil—and the world’s most valuable resource. But if data is the new oil, most HR teams are still figuring out how to refine it. One invaluable piece of HR data, talent analytics, is poised to revolutionize the recruitment process. But most HR teams still aren’t taking full advantage of this new tool.

According to Deloitte, 78 percent of large companies rated using talent analytics as either important or urgent—going as far as to rank it as one of the top three urgent trends in HR.

And yet, 45 percent of the same companies didn’t consider themselves ready to implement talent analytics as part of their processes.

In this article, we’ll show you why so many companies view talent analytics as a major priority, with a focus on the value talent analytics can bring to your hiring process.

On top of that, we’ll provide practical and actionable ways for you to introduce talent analytics into your hiring strategy.

What is talent analytics?

Talent analytics is the systematic analysis of workforce data. It’s data that’s collected and used by HR teams to help you better understand your employees and your potential hiring pool so you can uncover any opportunities or gaps that need to be addressed.

Laszlo Bock, former Senior Vice President of People Operations at Google, nicely sums up the value of talent analytics. “By analyzing behaviors, attitudes, personality traits, and perception over time, we aim to identify the biggest influencers of a satisfying and productive work experience.”

By collecting and analyzing employee data, “[It] allows us to flex our people practices in anticipation of our peoples’ needs,” said Bock.

Talent analytics is also known by many other names, including human resource analytics, workforce analytics, human capital analytics, people analytics, or hiring analytics.

Examples of talent analytics in action

In practice, talent analytics can be used for many different HR purposes, but always includes an infrastructure of collecting and reporting on data about your employees. In most cases, this includes elements like a reporting dashboard with key HR metrics, and regular employee surveys or tests.

For example, all of Accenture, Intel, IBM, and Twitter use sentiment analysis from surveys or internal company chat messages to evaluate how their employees are feeling about the company. They then use this data to identify problems or opportunities that didn’t come up through typical review processes.

Wal-Mart and Credit Suisse Bank, on the other hand, feed a massive amount of data points into an advanced algorithm to predict which employees are most likely to quit. This helps them forecast where they need to focus their hiring efforts before the positions even need to be filled.

Other companies use talent analytics to create internal platforms where they can match current employees to vacant role opportunities within the organization based on their skill profiles.

Another use case would be using talent analytics to evaluate the characteristics and skills of your company’s top-performing salespeople. You could then test candidates on those skills as part of a pre-employment assessment.

An untapped opportunity

The importance of talent analytics is clearly understood by HR teams, which are already adapting to this new world: 30% of corporate HR departments already have at least one team member or an entire team dedicated full time to analytics.

LinkedIn’s Global Recruiting Trends report from 2018 found similar results. According to their research, 50% of hiring professionals were using big data as part of their strategy.

And yet, most HR teams know they aren’t taking full advantage of data yet. According to Gartner, “most companies are not realizing the value from their analytics investments, with only 21% of HR leaders believing their organizations are effective at using talent data to shape talent acquisition and recruiting strategies, improve employee engagement and inform other business decisions.”

And there’s one area of HR that stands to benefit the most from talent analytics: hiring.

How talent analytics can help with hiring

Hiring the wrong people is expensive.

According to a CareerBuilder survey, companies lose $14,900 on average on each bad hire—with 74% of companies surveyed claiming to have made at least one bad hire.

According to the same survey, the most common reasons for bad hires were:

  • The hiring manager assumed an under-qualified candidate could learn the needed skills
  • The candidate lied about their qualifications
  • The hiring manager took a chance on a nice person
  • The hiring manager felt pressured to fill the role quickly
  • There weren’t any other qualified candidates

All of these problems could have been avoided if talent analytics and HR data were used more proactively. 

Because with talent analytics, you can put more data and strategy into the hiring process rather than just focusing on filling the position.

Here’s how talent analytics can benefit the hiring process.

1. Identify skills on your current team

One simple way to hire better candidates is to fill skill gaps missing on your current team.

Current employees can be tested on their hard and soft skills to determine where your team may be lacking. You can then leverage that data to hire employees that make a bigger impact.

Alternatively, you can use skill assessments to identify diamond-in-the-rough employees who may be able to excel in a bigger role.

2. Identify representational gaps & improve diversity

There are countless benefits to diversity in the workplace.

Diverse teams are more innovative and creative. They are faster problem solvers. They make better decisions. They are more productive and perform better. The list goes on.

By using talent analytics to monitor the diversity on your team (whether it’s race, gender, or any other measure of diversity), you can then use this data to inform your diversity hiring initiatives.

3. Uncover key recruiting metrics & improve the candidate experience

By tracking key recruiting metrics like application completion rate, applicant-to-interview rate, interview-to-offer rate, offer-acceptance rate, source of hire, quality of hire, and turnover rate, you can unlock new insights about your hiring process.

By tracking and learning about your strengths and weaknesses at each stage of the hiring process, you can uncover any weak points in the candidate experience.

For example, you may uncover a flaw in the application process or learn where you need quick response times or more candidate touchpoints.

This will help you optimize your hiring process, ultimately reducing your time to hire and your recruitment cost per hire.

4. Hire with less bias

By making data-driven hiring decisions, you can work to minimize unconscious bias from your hiring process.

And this goes way beyond classic examples of hiring bias, such as interviewer bias. You may discover something totally unexpected about what makes a great hire.

For example, AT&T and Google discovered through talent analytics that having a stellar academic record at a prestigious school was a less predictive measure of job success than having a demonstrated ability to take initiative. Without using hiring data, they never would have eliminated this non-predictive hiring bias.

5. Better predict candidate success & hire better candidates

All of the above leads to a better understanding of what makes a great candidate.

The aforementioned LinkedIn report found that companies who implemented talent analytics as part of their hiring process reported that it helped them with talent acquisition—increasing their employee retention by an average of 56%.

6. Improve forecasting

While your forecasting model may not be as complex as Walmart’s, you can use talent analytics to track historical hiring data, employee turnover, internal job changes, and factors like the current hiring rate.

Armed with this data, you can improve succession planning and predict any potential job openings or gaps in your team before they actually happen—giving you more time and less pressure to fill a role when it opens up.

The many benefits of using talent analytics are obvious. But how can you actually introduce talent analytics into your hiring process?

How to use talent analytics in your hiring process

If you’re new to talent analytics, this can all seem pretty daunting to put into practice.

But fear not, there are some realistic ways for you to start using talent analytics to boost your hiring today.

1. Start with a data-driven mindset

Some parts of HR, like evaluating candidates, are all-too-often, gut-driven. Other parts of HR, like employee reviews, can feel too process heavy. 

Committing to a data-driven mindset can help alleviate both issues. Gut-driven processes can be informed with data, and process-heavy initiatives can be lightened with easier-to-interpret data.

The key is to commit to a culture of using data on your HR team.

This starts with ensuring that everyone on your HR team has basic data analysis skills and that you encourage your team to back up their decisions with data rather than intuition.

For example, Google once posted an HR business partner job description where they preferred candidates with “strong analytical and problem-solving skills with proven ability to organize and analyze data, using HRIS systems for reporting.”

Facebook has similar requirements, requiring HR Business partners to “drive data-led decision-making through analysis of key people metrics.”

2. Use an end-to-end HR system

Unfortunately, you won’t be able to make data-driven decisions unless you have a system that gathers data.

To run a successful talent analytics program, you will need a true end-to-end HR system or technology stack that allows you to track employee data at all stages of their lifecycle, starting from the application process.

That’s why the IT team should be your best friends. Partner with your company’s IT team to develop data governance principles and to ensure your hiring team is equipped with the right HR technology. In fact, many HR teams now have an IT specialist working directly for their team.

The key to this is implementing a system that makes talent analytics user-friendly for your team. If data isn’t easy to access and easy to interpret, it will never be used.

3. Identify specific challenges and KPIs

Data for the sake of data doesn’t get you anywhere.

But once you commit to a data-driven culture, you can more easily identify the problems you want to solve as a hiring team, and then track your progress towards those goals.

Identify specific challenges you want to address and then identify the key performance indicators (KPI) that will help you measure your progress.

For example, if you commonly face the issue of having many vacant roles, you would likely want to track time to hire and turnover.

4. Build your ideal candidate persona

Based on what you learned from data from your current employees, identify any skill or representational gaps on your team.

Use this information to build your ideal candidate persona. Ask questions like:

  • What role-specific skills do they need?
  • What values should they possess?
  • What language skills do they need?

You should also assess their long-term motivations, like whether or not you want to bring in someone who could eventually move into a leadership role, or whether you’d prefer to hire someone who’s comfortable staying in the role long-term.

5. Revamp & track your employer brand

Use your ideal candidate persona(s) to reassess your employer branding.

Make sure your website, social media profiles, and job descriptions appeal to the applicants you’re trying to target. For example, if you’re hiring for more diversity, make sure your job descriptions use inclusive language.

Then, as discussed above, track your recruiting metrics like inbound traffic to your job postings, application rate, your offer-to-hire rate, and other metrics that may help you learn how to improve the candidate experience.

6. Consider screening candidate resumes

Resume screening tools have become a popular way for large companies to automatically sift through the thousands of resumes they receive on a daily basis.

Resume screening software is powered by AI that filters applications based on certain keywords, saving talent acquisition teams lots of time.

However, resume screening tools aren’t without their issues. Applicants are quickly learning how to include target keywords in their resumes, leading to false positives. On the other hand, some qualified candidates may be erroneously filtered by the system if they use non-standard phrasing or resume formats.

7. Use pre-employment assessments

A better alternative to screening candidate resumes is to use pre-employment assessments

A pre-employment assessment is a package of tests given to a candidate to complete as part of the application process.

Potential test types include:

By using a combination of tests, you get a clear, data-driven view of each applicant. Not only does this save you from sifting through every resume, but it also gives you a less biased perspective on an applicant’s true value and skillset.

Take a data-driven approach to hiring

To make talent analytics part of your hiring process, make TestGorilla part of your HR tech stack.

You can easily create high-quality, customizable assessments for any job role, allowing you to choose the tests and questions that work best for you.

You can then analyze assessment results in real-time from a convenient candidate dashboard, allowing you to instantly compare your candidates by the metrics you care most about.

To get started with TestGorilla, get a free trial today.

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