HR Analytics How-To's, Part IV: Pushing the Frontiers in Predictive Analytics
At HR conferences these days, there's often a lot of talk about predictive analytics. But when you ask conference attendees who are already using analytics what they're predicting, the answer is inevitably either turnover or retirement (the latter being a subset of the former).
While this is all well and good - and clearly a positive development - it is still a fairly limited application of predictive analytics. Measures like turnover or employee engagement are "intermediate outcomes," ones that contribute to an organization's ultimate goals (e.g., high quality goods/services, satisfied customers, profits).
The real breakthrough opportunity for HR professionals will be when predictive analytics methodologies are applied directly to organizational-level goals like profits and customer satisfaction. And the good news is that's already possible; there's no need to continue limiting analytics applications only to more traditional HR measures like engagement and turnover.
Linking to business results does require putting together disparate pieces of information (see figure below) for the purpose of creating actionable business intelligence. This is the analysis that will get the attention of C-level executives and the Board of Directors - and help HR professionals play a truly strategic role in their organizations.
