Tag Archive: Predictive Analytics

  1. Machine Learning vs. Predictive Analytics: What HR Should Know

    If you thought machine learning and predictive analytics were one and the same, you’re not alone.

    Though the terms ‘machine learning‘ and ‘predictive analytics‘ aren’t interchangeable, they are complementary – less like apples to apples and more like apples and caramel. Excellent apart and unstoppable together.

    Food metaphors aside, in today’s hyper-competitive landscape, the only way to get ahead is to be future-ready. To predict things before they happen so you can put your business in a favorable position. Luckily, with all the data that’s available to HR, you don’t have to be a soothsayer to answer questions like:

    • Which candidates in our applicant pool will become top performers?
    • Who on our staff has the greatest growth potential – and who is at risk of turning over?
    • When will I experience my next staffing shortage?
    • What will my expected time to fill be in next year’s economic climate?
    • How will projected business growth effect employee engagement?

    Machine learning and predictive analytics can work together to answer HR’s most burning questions.

    How does it work? Think of predictive analytics as the what and machine learning as the how.

    Predictive analytics is a practice that attempts to quantify possible future events. Predictions are made by finding patterns in current and historical data, often through sophisticated mathematical and statistical models.

    Fun fact: Predictive analytics dates back to World War II when it was used to decode encrypted German messages.

    Machine learning is a way to apply AI to predictive analytics so that predictions can be made without human guidance. Machine learning gives us a superhuman edge because its algorithms can analyze massive amounts of data and identify every possible pattern (and remember – patterns are key to predictions!)

    While predictive analytics can be done without AI, machine learning unlocks new predictive power. Free from the constraints of human analysis, machine learning can use continuous data streams to make real-time predictions, then analyze the outcomes and improve its own performance.

    How can your HR team bring machine learning and predictive analytics into practice?

    As other arms of the business (looking at you, Marketing, Finance…) sharpen their predictive intelligence, the expectation is that HR do same. But where to begin?

    If our peers can predict buying patterns and market trends, then the same capability should be available to HR. And it is! In fact, it’s built into many of the tools that your team is using today, or will be using in the near future.

    Modern pre-employment assessments, for example, are really predictive analytics tools using machine algorithms to identify the highest potential candidates in your applicant pool. You’ll also find predictive analytics and machine learning in resume screening software, recruiting chatbots, and video interviewing platforms, which are beginning to use speech and facial analysis to predict job performance.

    Whatever tools you chose, make sure they’re tied to the questions you’re trying to answer (Who are our high potentials? Where are our risk areas? What resources will we need…?). Implementing predictive analytics or machine learning without a defined purpose won’t do you any good. It can even get you into trouble.

    So go! Explore the brave new world of HR and become the strategic player you’ve always wanted to be. But also, be smart and don’t succumb to everything that’s shiny and new – especially when it comes to AI.

    For help cutting through the hype and investing wisely in new tools…

    Download the HR Buyer’s Guide: How to Evaluate HR Tech in the Machine Learning Era.

  2. 5 Ways Workplace Assessments Are Better Now Than They Used to Be

    Workplace assessments have been around for over 100 years, and have come a long way to meet the needs of modern businesses.

    The ‘science of selection’ dates back to World War I, when the military began using assessments to place army recruits. After World War II, early assessments like Myers Briggs entered the mainstream. Fast forward to today, and more than 70% of employers are using workplace assessments to help them hire the right people (source: Aberdeen Group).

    Being able to measure a candidate’s personality and cognitive ability is powerful, which is why workplace assessments are so widely used today. But they haven’t always been perfect. If you’ve had a not-so-great experience with assessments in the past, know that the industry is evolving fast to meet the needs of modern businesses.

    Say goodbye to clunky roll outs, limited use licenses, and difficult-to-decipher reports. Say hello to a new generation of assessments!

    Here are 5 ways assessments have changed for the better:

    1. Subscription options.

    In today’s cloud economy, the ‘all you can eat’ subscription model is king. Previously, assessments came with pay-per-test pricing, which forced companies to use them only for their highest volume or highest value (i.e. senior exec) roles. Now, thanks to subscription options, companies can use assessments in huge volumes, and administer them even earlier in the process. This ensures that hiring teams are spending time with top candidates across positions.

    2. Use cases beyond hiring.

    Now that assessments aren’t limited to specific hires, companies can expand their usage outside of talent acquisition. Managers and L&D teams are hungry to learn about employees: What are their strengths? What are their gaps? Who are our high potentials? What’s the best next step in an employee’s career path? Leveraging the assessment post-hire can improve team dynamics, employee development, succession planning, and more.

    3. No barrier for small to mid-sized businesses.

    Before the shift to subscription-based pricing, assessments were used almost exclusively by large companies with large budgets. The previous pay-per-assessment pricing model created a barrier for smaller businesses that couldn’t afford to ‘buy in bulk.’ So, unless you were in an enterprise-sized organization, assessments were used ad hoc, or not at all. Now, newer assessment products offer flexible, unlimited use licences with pricing based on company size.

    4. Easy to take, easy to interpret.

    The last thing you want is a long, complicated assessment that generates a long, complicated report. Reports of the past often required an I-O psychologist to interpret, which was additional expense. Newer assessment products offer user friendly tests that can be completed in less than half an hour (ours is less than 10 minutes for hourly roles and less than 20 minutes for professional roles). The reports are easy to understand and the tests are available on mobile and web.

    5. Real-time data and analytics.

    The days of paper-based assessments are behind us. Cloud-based solutions make distribution of data efficient and give users access to real-time analytics. Each time you hire a new employee, you add a data point to your aggregate analytics, which helps your teams make more intelligent and predictive hiring decisions. 

    The 100+ year history of assessments is a testament, not only to our fascination with the science of selection, but also to the practical and enduring value of assessments in the workplace.

    To learn more about implementing a workplace assessment, or expanding your use of assessments to other areas of the business, check out these helpful eBooks:

    Or, schedule a demo with Outmatch today!

    Written by Keith McCook, Ph.D.
    Vice President of Talent Analytics, Outmatch

  3. Job Competencies: Why They’re More Important than Industry Knowledge

    Sports distributor unlocks the secret to sales success when they begin hiring based on candidates’ personality, rather than background

    Imagine you’re a large-scale distributor of sports equipment and apparel. You hire salespeople from coast to coast to connect with local schools, community organizations, athletic programs – anyone who might be in need of uniforms, spirit wear, practice equipment, or game-day gear.

    What makes a great sales hire in the sports retail world? Someone with the right job competencies, or someone with deep industry knowledge?

    Well, you can probably guess that most of your job applications will come from people with a coaching or sports related background. Which makes sense. Former coaches and players have industry knowledge and a special love of the game that will draw them to your type of business. It may even fuel their sales energy. But will it help them close deals?

    Not exactly. While this type of person likely has experience using the products you sell, and can probably make personal suggestions as to which cleat is best for the community’s youth baseball league (molded? metal? turf?), being a sports fan is not the only requirement for sales success.

    This is what a leading sports distributor discovered when they took a close look at their 800+ person sales team. The company had seen a recent uptick in turnover, and wanted to address it before it became a bigger problem. Also, they knew that their sales managers, who were in charge of all the hiring on the sales team, could use some help vetting talent from outside the industry. The company’s Talent Acquisition Manager said they needed a tool to “tip the odds in their favor.” That’s when they came to Outmatch.

    After taking part in a research study that included 250 of their sales professionals, the company realized that sales productivity was driven primarily by the salesperson’s personality, not by their background or love for sports.

    Six months earlier, the company began using a predictive talent assessment with two goals in mind: (1) streamline the selection process for busy sales managers, and (2) identify sales candidates who were best fit for the role and least likely to turn over. Rather than measuring product-specific skills or industry knowledge, this assessment measured candidates’ personality, including Accommodation, Assertiveness, Sociability, Frustration Tolerance, and other job competencies that are critical to success in a sales role.

    As part of the research study that followed, Outmatch collected supervisor ratings and objective metrics on newly hired salespeople, and compared them to the recommendations made by the assessment. Such analysis would reveal just how well the assessment was predicting success in this company’s sales environment.

    Results showed that salespeople who were identified as a strong match by the assessment were 9X more likely to achieve above-average sales productivity, compared to those who were identified as a poor match.

    Without an assessment in place, the company would have likely hired a mix of strong and poor matches, based on their previous selection process. With an assessment in place, they can focus all their hiring efforts on strong matches, who have proven to be more productive in the role.

    Not only was the company able to address their turnover problem, they’re now equipped to boost performance and productivity across their entire sales team. The company still considers a candidate’s coaching or sports background in the selection process, but it’s not the most important consideration. As it turns out, job competencies for sales success can cut across industries.

    It’s not so much what you sell, but how you sell it, and people with a natural strength for sales will often thrive, even if they’re not selling something that’s deeply personal or nostalgic to them.

  4. Restaurant Industry Trends: Two Major Disruptors Facing Restaurants Today

    To operate a restaurant, some things are the same as they’ve always been. Inside the four walls, the focus is on hot food, clean tables, and good service. But in today’s social and mobile-centric world, the customer is completely different, and the employee is completely different. What has made restaurants successful in the past is not what will make them successful in the future. They are having to adapt quickly—or die.

    In a recent episode of the Talent Playbook Podcast, we talked to Joni Doolin, founder and CEO of TDn2K, a market research organization that provides insights and analytics for the restaurant industry. Having founded this organization in 1995, Joni has seen the evolution of the industry and experienced restaurant industry trends first-hand.

    Two Seismic Shifts Happening in the Restaurant Industry

    We asked Joni: What restaurant industry trends have caused the most upheaval, and what are the biggest challenges facing the industry today? Here’s what she said.

    1. The on-demand delivery model

    There’s a fast food restaurant outside our office. There’s a drive-through, which is always quite full. There’s place to pick up call-ahead or text-in orders. There’s a constant coming and going of third-party delivery drivers (from services like Uber Eats or Grubhub). But you look inside the restaurant, and it’s empty.

    Restaurants are trying to manage the consumer’s expectation of ‘I want it now.’ They’re having to balance all kind of third-party ordering and delivery services, or they’re having to shift their business model to focus on delivery versus in-store experience. It’s an enormous complexity for our industry, and something we’re still working to figure out.

    2. The onslaught of information

    In the past decade, we’ve gone from driving with our eyes closed to TMI (too much information). It’s happened that fast. Think about insights or analytics teams. They didn’t exist ten years ago. Now, we’re swimming in so much data that we need teams of people to tell us what it means, what to pay attention to, and what to act on.

    We’re even seeing restaurant companies with data analysts on the HR team. That’s how important people and talent analytics have become. In the past, if you were going to open a hot dog stand at the corner of Walk and Don’t Walk, you would know foot traffic, you would know consumer profiles, you would know competitive pricing with in a 2-mile radius… All of that was readily available, but there were no metrics on the HR side. We’ve come to realize that those metrics matter too, and have a huge impact on the success of a business. But, it can quickly become a mess of data where we need dedicated people to make sense of it and help companies understand how to use it to their advantage.

    Bonus Question: Which restaurants rise to the top?

    Throughout her career, Joni has worked with all different types of restaurant companies. Young companies, established companies, “it” companies (and not-so-“it” companies) from fine dining to quick service and everything in between. Each year, Joni’s team at TDn2K recognizes outstanding restaurant performance through their Restaurant Industry Best Practices Award. In 23 years of giving this award, Joni has found that top-performing restaurants—when looking at financial performance, human capital performance, and guest satisfaction performance, as well as work practices in areas such as community involvement and employee engagement—come in all shapes and sizes. It doesn’t matter if you have high guest checks or low guest checks, she says. It doesn’t matter if you’re the industry darling or the hot new trend.

    What does matter, then? What ultimately determines a restaurant’s success?

    Joni’s answer came easily in one word: Leadership.

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    For more on restaurant industry trends, and wisdom about embracing change, check out episode 9 of the Talent Playbook Podcast with Joni Doolin.

  5. Predictive Talent Analytics: Overcoming Barriers in HR

    Predictive analytics has become the standard decision-making framework for finance, marketing, healthcare, retail, logistics, and countless other business operations. Predictive analytics also powers our non-working lives, from Amazon product recommendations to travel itineraries and social media news feeds.

    Predictive talent analytics – where do we start?

    When it comes to adopting predictive analytics for talent decisions, however, HR still faces many barriers. In a recent webinar, HR Tech CEO Greg Moran talked about the top use cases for predictive analytics in HR, and barriers including a lack of analytical expertise, as well as silos in and outside of HR.

    To help HR leaders overcome these barriers and begin using predictive talent analytics, Greg answered the industry’s top questions on skills, silos, and technology in HR.

    HR is traditionally a soft-skills industry. How do we improve our analytical capabilities?

    The best place to start? An online class. An intro-level understanding of data analytics would be helpful to everyone in HR today. You don’t need a Ph.D. in data science, nor do you need to gain a mastery of statistical analysis. You can hire data scientists and data analytics teams for that. Your goal should be to adopt an analytical mindset where you can start to think in terms of ‘How do we apply data to our biggest business challenges, what kind of questions can we answer that we weren’t able to answer before, and how do we get access to the data and technology we need to improve the operations of our business?’

    Talent Acquisition and Talent Management departments are often disconnected. How do we connect these teams together so we have more access to data?

    This is really common area where silos form within HR. The first step is to build a business case for sharing data, which involves articulating the types of questions you want to answer and the results you’re aiming for.

    You can say, ‘As a talent acquisition organization, we don’t want to just understand our cost per hire or our time to hire. We want to understand how we’re impacting quality of hire and the overall performance of the business. The only way we can understand that is by getting access to post-hire data.’

    A big challenge in HR is being able to articulate bottom-line results. So, take your case a step further by saying, ‘We believe that by connecting performance data to pre-hire data, we can improve our hiring decisions for a 10% increase in sales’ – which, depending on your business, can have millions of dollars of impact. And that’s a compelling reason to make a change.

    There are a lot of IT products on the market. Which is best for HR analytics?

    The answer to this depends on what you’re trying to accomplish. Before you look to technology, you first need to understand the business questions you’re trying to answer. Are you trying to solve for turnover? Are you trying to solve for performance, or diversity, or some other challenge? The technology you choose should be geared toward driving business intelligence in those areas.

    If you’re trying to solve for employee performance and turnover, you’ll benefit from using a predictive analytics tool in your selection process. A predictive talent assessment, for example, will analyze performance potential and turnover risk to identify your top candidates. Another good option is an employee engagement tool, where you can start to identify correlations between engagement, performance, and turnover. All of this you could potentially do on a spreadsheet, but the technology is there to provide efficiency and transparency into your processes.

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    To learn more about improving HR’s analytical capabilities and getting started with predictive talent analytics, watch our webinar: How to Gain an Edge with Predictive Talent Analytics

  6. Integrate a Pre-Hire Assessment with Your ATS

    3 Reasons Why You Should Integrate a Pre-Hire Assessment with Your ATS

    Pre-hire assessments deliver predictive analytics on job and culture fit, providing a crucial layer of insight into your applicant pool. When you you integrate an assessment with your applicant tracking system, your talent acquisition teams can access these analytics directly within your ATS platform.

    Speed to useful information is the key gain. An integration allowed our team to move faster. Without it, our tools were not going to be as effective.”

    Clay Stallings, VP of Talent Acquisition and Development at Acceptance Auto Insurance

    About 90% of the companies we talk to already have an applicant tracking system in place, and more small and medium sized business are adopting pre-hire assessments after seeing how valuable they have been for enterprise organizations.

    Whether you’re using an assessment for the first time, or considering a new vendor, integration is going to be a key concern. Many companies require that all tools and technologies integrate with their core HR systems, but if you’re on the fence, here are the top three reasons to integrate an assessment with your ATS:

    1. Seamless candidate experience. Having an integrated assessment keeps candidates engaged, and makes the application and assessment one simple, seamless process. Candidates stay plugged into your ATS, and you reduce the risk of drop-off as you’re not requiring them to jump from one system to another.

    2. Greater recruiter efficiency. With an integrated assessment, recruiters will see a shortlist of top candidates for the job, along with job match scores, candidate rankings, and more—right within your ATS. The ease-of-use, plus the tremendous time savings in early screening results in a highly efficient recruiting process.

    3. Competitive edge in recruiting. Outmatch Assessment provides recruiters and hiring managers with critical data on culture fit, as well as a candidate’s likelihood of success in the role. By integrating the assessment into your process, you greatly sharpen your team’s decision making capabilities, and give your organization a competitive edge in identifying and selecting top talent.

    To learn more about ATS integration, check out our 1-pager: 5 Reasons to Integrate Outmatch with your ATS. Or, to learn more about adding predictive analytics to your selection process, download our eBook: The Essential Guide to Predictive Talent Analytics.


  7. New Technology in Talent Selection

    It’s an exciting time in HR. Our traditionally soft-skills industry is becoming tech-savvy. Finally! HR technology and predictive analytics are bringing precision and accuracy to talent strategy, and giving HR leaders the power to impact bottom-line business results like never before.

    By embracing technology, HR continues to sharpen it’s decision-making capabilities. We’ve seen huge improvements in Talent Acquisition’s ability to predict a candidate’s job performance and turnover risk before making the hiring decision. Talent Acquisition is also equipped to predict and prepare for staffing shortages, and to quantify the financial impact of hiring decisions on the bottom line. All thanks to technology.

    In light of such successes, employers are taking an all-in approach to technology. At the same time, they’re beginning to devalue to the human side of talent selection.

    Before the rise of modern HR technology, employers had no choice but to trust the instincts of their recruiters and managers to make the right hiring decision. Employers now have the option to eliminate gut instinct and human intuition from the hiring process entirely. But should they?

    What we’ve found is that HR technology and human intuition don’t have to be at odds with one another. Technology has transformed HR into a an efficient, high-powered machine. But in talent selection (and in life), balance is key.

    That’s why best-in-class companies use a blended approach, valuing their teams’ ability to make good judgments about talent, and also leveraging technology to provide guidance and create an efficient, reliable, and pain-free talent selection process.

    To learn more, download our white paper: Hydrangeas, Narcissists, and Intuitive Thinking: The Science Behind Intuition, and Its Role in Talent Selection.

  8. Innovation in HR: 3 Trends for Talent Acquisition

    “Structure, structure, structure” has been the mantra of Talent Acquisition professionals for several years now. If your Talent Acquisition team has successfully implemented a structured, scalable hiring process—especially one that can process hundreds or thousands of applicants across hundreds or thousands of locations—then take a moment to acknowledge this tremendous feat. You’ve officially joined the ranks of best-in-class companies, and are better positioned to secure top talent for your organization.

    So what’s next for Talent Acquisition? HR leaders know that pushing forward and staying ahead of industry trends is critical to success. That’s why you’ll see companies that are strong in talent acquisition continue to experiment. Why settle for good when you can have great? In HR, just like in business, the most successful among us are the ones that continue to innovate.

    Here are 3 ways you can drive innovation in HR and take Talent Acquisition to the next level:

    1. Embrace AI and predictive analytics. 

    According to Glassdoor, artificial intelligence will impact all facets of the workforce, but the biggest changes will be seen in two key business sectors—Finance and Talent Acquisition. Predictive analytics are already sharpening HR’s decision-making, and coupled with AI capabilities like machine learning, which can probe massive amounts of data for patterns and trends, identify the most predictive models, and learn, adapt, and self-correct over time, HR leaders are poised for success like never before.

    For Talent Acquisition specifically, these solutions will provide the ability to quickly sort resumes, make predictive matches between candidates and jobs, calculate turnover risk, and predict labor market shifts and staff shortages.

    2. Provide transparency for candidates.

    HR is beginning to shake up the silos so that candidates profiles are easily accessible and continue to build by taking in data from key points in the hiring process (so that hiring managers don’t see a “different” candidate than the recruiter, or make decisions based on limited information). This provides great transparency for decision makers internally. The next big obstacle is providing transparency for candidates. Glassdoor puts it best by saying:

    In an era when consumers can easily track every step in a FedEx delivery process — from a mobile device — it strikes most job seekers today as archaic to be unable to track the status of a potentially life-changing job application in real time.”

    The technology is already in place to support this change. Technically speaking,  it’s just a matter of repackaging data from your existing ATS and opening it up to candidates. Candidates expect, and appreciate, communication like this, and if transparency is a core value in your culture, then it’s a necessity to demonstrate it in your candidate experience.

    3. Build powerhouse hiring profiles.

    When you’re filling vacancies, you want to hire people to satisfy the immediate need, but you also want to hire people who will contribute long-term to your company’s business growth and goals. How do you know when you’ve got someone who will thrive in your culture and drive results in your company? Hiring profiles provide that benchmark. Hiring profiles can be tailored to your organization’s culture and core competencies, and then “plugged in” to a pre-hire assessment to measure a candidate’s fit for the job.

    What are the most important things to capture in your hiring profile? That depends on your company, and on the job. Amazon, for example, which is known for hiring pioneers, innovators, and workhorses, looks for traits like Curiosity, Frugality and Customer Obsession when evaluating candidates for leadership roles.

    For a further look into the future of HR, see our 2018 HR Trends to Watch, or check out our webinar on How Predictive Analytics is Changing the Game in 2018.

  9. 3 Reasons Why HR Should Embrace Predictive Analytics

    Predictive analytics is top-of-mind for business leaders everywhere, and for good reason. It’s transforming the way that businesses operate, and it’s applications are practically limitless.

    Organizations of all kinds, from finance and healthcare to retail and marketing, are finding new and innovative uses for predictive analytics. It’s time for HR to catch up. Here are the three top reasons to move predictive analytics to your must-have list this year.

    1. Drive superior decision-making.

    Predicting trends and future events has always been the holy grail of business success. Predict the future, and you’ll know which products will be in highest demand and which solutions will be most successful, you’ll know when you’re going to experience shortages and surpluses, and you’ll know which opportunities to purse and risks to avoid.

    Predictive analytics brings precision and accuracy to your predictions like never before. With big data and predictive algorithms and your fingers tips, you’ll be better positioned to predict employee performance, turnover risk, or any of the key metrics that impact your bottom line.

    2. Shift your strategy from reactive to proactive.

    Why report last year’s numbers when you can report next year’s numbers? Predictive analytics provides a vantage point that’s far superior to basic, or even advanced reporting.

    For example, you probably report your organization’s annual turnover rate. With predictive analytics, you can predict and prepare for turnover and talent shortages. Not only that, you can also avoid turnover by calculating turnover risk in order to avoid hiring high-risk candidates, and to better retain high-value employees.

    3. Stay ahead of your competition.

    Predictive analytics has become the gold standard in business intelligence, and early adopters are already reaping the rewards. In the retail space, companies like Whole Foods are quickly adopting this data-focused model to keep up with competitors like Kroger, which uses predictive analytics to power its best-in-class loyalty program and drive impressive same-store sales growth and market share gains.

    For HR leaders, the competition is for talent. But it’s also within your own company, to prove yourself capable of the strategic visioning and problem solving that C-suite leaders have come to expect from HR.

    Here’s what Josh Bersin had to say about it in last year’s Deloitte report on HR Technology Disruptions for 2017:

    The reality is, companies should double down on their investments in analytics and pay serious attention to this area… Companies that don’t are likely to be disrupted by competitors that do.”

    For more insight on how predictive analytics is different from the data analysis you do already, and how you can start driving results using predictive analytics, download our eBook: The Essential Guide to Predictive Talent Analytics. Or, watch our webinar: The Future of HR: How Predictive Analytics is Changing the Game in 2018.