5 Ways Big Data Can Help You Make Better HR Decisions
We’ve all heard the term “big data” and how analyzing it can be vital to making better business decisions. So how do you access your company’s big data, especially related to HR and payroll functions? We all want to make strategic business decisions; however, it can be challenging and even overwhelming to harness the right analytics. This is even more difficult if you aren’t using a platform that unifies HR and payroll data.
In this article, we’ll talk about what big data is and why advanced analytics are important in today’s workforce. We’ll also discuss five ways big data can optimize HR and payroll decisions for your organization.
What is Big Data?
Big data describes the process of analyzing extremely large data sets to reveal trends, patterns, and associations. Big data can be traced back to the late 1800s. Sir Henry Furnese, a successful banker, used traditional data to make strategic business decisions. This valuable data ultimately gave him a competitive advantage in the banking industry.
Data science progressed again when Henry Ford used analytical data to make improvements to his assembly line. The result was a revolution in the manufacturing industry worldwide, and the phrase “business analytics” was born.
Over time, business analytics grew from manual tracking to the launch of robust computer servers. Computers launched a new era by monitoring historical data to dictate future business trends. Thanks to cloud-based management systems, the volume and types of data that organizations can access are exponential and steadily increasing.
What are the Benefits of 21st Century Workforce Analytics?
The widespread use of machine learning coupled with artificial intelligence (AI) has been referred to as the 21st Century Industrial Revolution. The largest factor that separates today’s big data technology from data of the past, is time. The duration it takes to get data-driven results today is a fraction of what it used to be.
Previously, businesses gathered information manually, studied that information, and made decisions based on their findings. Now, relevant data is generated through software and artificial intelligence platforms that easily predict trends for years to come. In the modern era, businesses can easily gather volumes of data and project future business insights. This readily available and instant access to big data offers businesses a huge competitive advantage.
Leveraging Big Data in Your Business Decisions
There are several ways in which your business can utilize big data to reach strategic goals and grow your business. For example, let’s look at how a business development and sales team can utilize data analytics to help with client prospecting.
The team can use data history to anticipate upcoming trends, then compare that data to client profiles generated with AI technology to better identify who to target. Furthermore, that data can be used to anticipate decisions a prospect will make based on what other companies have done and why they’re making those choices. From there, the business development and sales team can adjust their strategy accordingly.
Business intelligence allows your development and sales teams to identify the right prospects. It also lets your teams anticipate the type of buying decisions your prospects might make. Having this knowledge gives you a competitive advantage when acquiring clients who are more likely to be long-term customers. As you can see, utilizing big data analytics can ultimately help your company grow and flourish in the long run.
Why CFOs Need More Efficient Reporting
How Does Big Data Apply to Payroll and HR
Big data analytics plays a vital role in business development and sales team initiatives. Therefore, It makes sense that big data also impacts payroll and HR functions.
HR managers can use people analytics to gain insight into their human resource processes. These insights can help improve areas like employee performance, employee retention, organizational culture, and leadership performance. In a recent study by Forbes, businesses with the most people analytics performed 30% better than their other S&P 500 counterparts.
Similarly, when you track trends in payroll data over time, your finance department can tie compensation to employee performance. When you have your payroll functions and HR data together in one platform, you can offer future employees more appealing jobs.
5 Ways Big Data Impacts Payroll and HR
In order to harness the power of big data, HR professionals, CFOs, and payroll managers need a unified data source. Single-system platforms house all your HR and payroll data so it’s easier to analyze. Access to a complete data history allows you to identify areas of the employee lifecycle that you need to focus on. Prioritizing problem areas leads to greater retention and return on investment.
Access to tools like analytical dashboards allows you to easily view HR and payroll reporting in one place. That way you can quickly identify trends, anticipate future needs, and make more informed business decisions.
Here are five ways you can use big data to impact payroll and HR decisions:
1. Increasing Employee Retention
Leverage tools like total compensation reports, which communicate the entire value of an employee’s compensation package. This includes items like wages, health insurance, bonuses, and retirement matching. Provide your staff with an easy-to-read statement that shows them the total value of their compensation beyond the paycheck. With a better understanding of employee satisfaction, you can make more informed decisions about what benefits to offer. This type of insight will allow you to be more strategic about employee retention.
2. Decreasing Overtime Compensation and Labor Costs
Determine if any workers may be clocking in early or clocking out late. If you are paying overtime, this equips you with the right information to know if you should hire more employees. You can also determine if a company clock-in policy needs to be implemented, better communicated, or changed. This helps eliminate unnecessary overtime expenses.
3. Raising Workforce Productivity
Discover trends that may be affecting productivity, like absenteeism. If you have employees who are missing work repeatedly, you can utilize analytical software to identify absent employees. Employing your workforce can cost upwards of 70% of your company’s operating expenses. Therefore, it’s important to understand why employees are missing so much work and determine a solution.
4. Optimizing The Bottom Line
When it comes to payroll, small mistakes can lead to large problems. Utilizing a unified platform allows you to collect data in real time. It also offers the most accurate picture of your company’s costs throughout the day. Tracking historical trends, and identifying calculation errors, helps you improve your processes and your bottom line.
5. Improving Talent Acquisition
Use hiring data to predict your hiring needs better instead of in-the-moment hiring. Recruiting data can be used to identify on which hiring platforms you will find the right talent. View hiring process trends to ensure you’re filling positions more efficiently. Furthermore, you can review your onboarding process data to identify any areas for improvement that will lead to better-trained employees.
You don’t have to be a data scientist to identify trends, metrics, and patterns in your organization. Begin with using a single-system platform to unify your HR and payroll analytics so key data is easy to access. Use relevant data to be more proactive at improving employee retention, controlling labor costs, forecasting hiring needs, and more. Incorporate big data analysis into your processes, and you’ll make more strategic decisions that align with your organization’s goals.