The Potential Value of Predictive Analytics in Human Resources
The last few years have seen a continuing growth in the use of predictive analytics – using computer models to analyze data and predict patterns and trends. Widely used in finance, insurance and marketing, it is less popular in HR, where much emphasis is still placed on human intuition.
Yet studies show that predictive analysis generally beats human judgement. Humans simply aren’t capable of balancing as many variables in our heads. The tactics we’ve evolved to get around this lead to bias and over-confidence in our own judgement. Yet studies have shown that predictive analytics equals or beats the decision making of senior managers in almost every case, and leads to an average of 5-6% higher gains than competitor companies.
So how can predictive analytics be applied in HR?