Attracting and retaining talent is difficult enough, but we’re in the middle of a resignation phenomenon unlike anything we’ve seen in our lifetime. Companies, regardless of size or history, are struggling to retain their talent while hiring new and it’s costly. Old methods of predicting employee tenure and future candidate compatibility right now is little more than a guessing game. This is where predictive analytics comes in, partnering it with recruiting to be unstoppable when hiring.
A single recruitment failure costs an average of $15,000 in today’s market. In addition to the lost revenue from that employee not performing up to par, you have the costs associated with the onboarding and training processes as well as the costs of fixing any mistakes they may make. In the first year alone, the wrong hire can cost your company $50,000.
Also consider the effect of turnover on morale and culture within an organization. More often than not, high rate of turnover is a sign of something going wrong at a company. So, not only is a bad hire a drain on your finances, it has an impact on the entire organization from top to bottom.
Predictive analytics aims at identifying when you’re most likely going to have a candidate who fits business needs and is likely to stick around long-term. It can be used for both.
Despite the industry of Talent Acquisition have reams of workforce data at their disposal, Gartner reports that only 21% of HR leaders believe that their organizations are harnessing talent data effectively to make better business decisions. All that data isn’t enough to produce actionable insights. Not on its own, anyway.
That’s where predictive analytics steps in. By using advanced statistical methods and workforce data, it makes predictions about future events, like turnover, performance, and more. We can use predictive analytics to predict candidate eligibility and likelihood of success within your company.
Using it, you can assess the types of workers you should recruit based on how likely they are to perform well in the role you are offering. Moreover, it helps you identify where the best candidates may come from, so you can target them most effectively via social media, advertising platforms, etc.
With predictive analytics, businesses can make informed decisions about how best to recruit and retain talent.
Predictive analytics (especially when it’s backed by true AI) can provide insight into the efficacy of your hiring process, effectively eliminating the guessing game that has everyone scrambling at present. Recruiting in the future will include a predictive element – use it now.#PredictiveAnalytics can help prevent turnover. Get the full list of benefits from PREDICTIVEHR @TalentData here: Click To Tweet
What is Predictive Analytics in Recruitment?
Predictive analytics is the application of historical data to make predictions for the future. When applied to the world of Talent Acquisition, it can be used to guide recruiting strategies, hiring decisions, employee retention strategies, and workforce planning.
Future occurrences are actually quite easily predicted when true Artificial Intelligence is backing your predictive analytics. With both powerhouses, your specific company data can identify historical patterns, pinpoint trends, and assist HR managers and recruiters in optimizing their results for hiring faster and, dare we say, better.
Why Do We Need To Use Predictive Analytics in Recruitment?
HR executives have reams of workforce data at their fingertips, but only 21% of them say they are effectively using it. When there’s a big difference between what we know and how we think we know, the issue isn’t nearly as complicated as it may seem.
In talent acquisition, it can be difficult to explain why predictive analytics is so valuable. This is not because it is complicated, but because many businesses don’t even know what they don’t know. The company doesn’t know how capable its workforce really is, and where they might best use that capacity.
By using AI-backed predictive analytics, businesses are able to identify historical patterns, spot trends, and create more informed recruitment strategies that yield better hiring results.
Why Predictive Analytics Important in Hiring
When using predictive analytics in hiring, the ability to make quick and precise predictions leads to quick and precise decisions. Pretty helpful during, say, a hiring shortage. The saying goes that a candidate interviewing with you is also interviewing with other companies. But top talent today is getting snatched up before they’re ever actively on the job market. Timing and quick decisions are essential to keeping up right now.
Businesses that use predictive analytics to predict future demand for roles can also plan their recruitment strategies around this insight. When there’s a skills shortage, the ability to predict hiring patterns based on historical data is key in accurately forecasting when you will need to start recruiting for specific roles.
With companies using recruitment analytics software instead of relying on outdated methods like gut feelings and intuition, they can find the perfect fit faster.
Predictive analytics can help recruiters and Talent Acquisition professionals:
- Identify strong hires for their open positions
- Make quicker and better offers to candidates
- Provide a better candidate experience for job seekers
- Improve employee performance and retention rates
- Reduce hiring costs and risks
From a top-notch ATS tech stack, HR platforms, performance management solutions, and more, recruiters collect incoming people data in hoards. The sheer magnitude of that data they have access to is nearly impossible to organize and utilize on a manual level, let alone use it to drive powerful business decisions or make future predictions.
Employers can use predictive analytics to source qualified candidates faster and more accurately with the right HR tech stack. The power of predictive analytics to uncover hidden signals in people data is the basis for predictive recruiting. Recruiters are able to find high-quality candidates even before starting the recruitment process with the aid of actionable data in conjunction with applicant tracking systems (ATS) solutions.
The use of predictive analytics can also help recruiters identify weak points in their hiring cycle. As a result, companies can improve the candidate experience and improve existing business processes. By tracking employee performance and retention rates with predictive analytics, recruiters can reduce unqualified hires and improve their recruiting process. All of these factors together can help recruiters hire the best candidates for their open roles.
Lets take a look at how AI Powered Predictive Analytics can work for your hiring process.
Use #1: Predictive Analytics Can Predict and Prevent Employee Turnover
Back in 2019, Gallup estimated the cost of turnover is around 150%-200% of an employee’s annual salary. When you consider the time and money spent hiring a replacement in this market specifically, it’s safe to bet it’s now even higher. Research also shows that more than 75% of the causes of turnover are preventable.
The right predictive analytics can evaluate which employees are most “at-risk” of leaving based on an analysis of employee attributes, plus the financial impact that will have on the enterprise. By detailing the variables that may cause each potential resignation, predictive analytics can also streamline target retention and/or hiring plans.
Use #2: Predictive Analytics Means Predictive Hiring
If you’re hiring right now, and we’d be surprised if you aren’t, you know how frustrating this market is. Spending hours mulling over candidate fit only to be beat out, hire someone who leaves shortly after they start, or have a tough time finding anyone to hire at all. This is yet another area where this industry can benefit from leveraging predictive analytics: to help assess candidate fit and position readiness.
Using data from existing employees, AI and predictive analytic algorithms can help narrow down candidates effectively before their profile even makes it to the recruiter or hiring manager. The candidates making it that far are only the best-fit recommendations, saving you time mudding through the people very unlikely to thrive in that position.
Use #3: Leverage Predictive Analytics in Talent Sourcing
Recruiting costs are soaring.
The competition is fierce.
Employees have more options than ever before.
All of this means that hiring the right employee, and hiring them quickly, is a more important task than ever. Organizations need to rely on more agile methods of talent sourcing in order to have any success capturing talent in this environment.
Predictive analytics and AI can aid in this process by seeking out candidates likely to leave their jobs in the near future. Passive candidates are a large target for sourcers right now, time in the job search is practically nonexistent.
Access to candidates that aren’t actively looking but could consider making a move to the right company? That’s invaluable access to top candidates.
Algorithms from social media profiles, company health information, and stock fluctuations can all be used to predict which employees might be prime passive candidates. It also takes into account signals such as their tenure, overall company turnover rates, company news, etc. This helps hiring professionals seek out prospects, but also helps them cater their recruitment strategy to suit this particular type of candidate.Predictive analytics partnered with recruiting= Unstoppable hiring. Read more in the latest from PREDICTIVEHR @TalentData here: Click To Tweet
Predictive Analytics: Data That Speaks
Data on its own has limited impact. Even data returned by predictive analytics is useless without the recruiter or hiring professional to make final decisions. However, predictive analytics CAN save hiring professionals time and money. By creating candidate shortlists, your hiring teams can focus on the candidate for a better, faster hiring process.
- Businesses can use predictive analytics to create a talent pool of qualified candidates before even starting the recruitment process. This allows businesses to focus on the most qualified candidates, which speeds up the hiring process.
- Predictive analytics can also help businesses identify potential areas of weakness in their recruitment process. By addressing these weaknesses, businesses can make the process more efficient and improve their chances of hiring the best possible candidate.
- Predictive analytics can be used to track employee performance and identify potential areas for improvement. This information can be used to improve the recruiting process and ensure that only the best candidates are hired.
Predictive Analytics with Recruitment Services?
Hiring is just the start. In recruitment, predictive analytics is used for more than filling vacant positions with qualified candidates. Thanks to the availability of such valuable workforce data, companies can do more than simply say, “Well, we’ll see.”
PREDICTIVEHR pairs predictive analytics with recruitment services. These services are agile, adaptable, and can come in and augment your current recruitment team – for a cost that is cheaper than an agency. Pair this with our analytics and we are that much better suited at finding the best fit for your positions.
By using predictive workforce analytics in Talent Acquisition, you can do more than just hire one candidate at a time or even predict when you will need to recruit for specific positions. AI can now analyze the information collected by your applicant tracking system, which is a game-changer when added to your predictive analysis.
The retention of employees is another area where predictive analytics can assist companies. Companies today face one of the biggest challenges of all: retaining employees. If they hope to succeed, they have to win this battle.
A company can also use predictive analytics to predict the number of employees it will need in the future. With access to workforce data, it is possible to build leaderboards dedicated to specific roles and departments. Managers can then manage their teams based on this data, which increases employee engagement as leaders keep score with predictive metrics.
Managers who are experts in talent identification can identify who has the skills they need and see where that person is in terms of performance or readiness. Employees who feel their strengths are being used effectively contribute to the feeling of well-being in an organization.
The HR leaders can more accurately predict who will be the best performers in the future. Through predictive analytics, they are able to identify candidates who have the skills and experience necessary for success in the target role. A plan can be developed to provide these people with more training, coaching, and development opportunities to help them become more competent in the future.
Companies are building strategic workforce plans based on data analysis from advanced analytics software in hiring, making big data small by focusing on the most relevant information.
Stop reacting to the market as it changes. Get predictive. Schedule a demo with PREDICTIVEHR today.