Subscribe to Entrepreneur for $5

Why You Need to Embrace the Big Data Trend in HR

Opinions expressed by Entrepreneur contributors are their own.

The big data trend has quickly made its way to the human resources industry, and HR professionals should embrace it with open arms.


In fact, 6,400 organizations with 100 staff or more will have implemented big data analytics by 2018, according to a 2013 SAS study of more than 1,200 businesses. What’s more, a Towers Watson survey of more than 1,000 organizations last year found HR data and analytics to be among the top three areas for HR technology spending.

Related: Hire Better Talent With a Big-Data Scientist

Where HR is concerned, big data is a big deal. It empowers employers and human resources to make more informed business decisions. Here are four reasons to embrace this growing trend within the HR industry:

1. Better insight.

“Big data” is a big buzzword reverberating throughout the business world, and for good reason. Big data serves as a window into employees’ professional lives. By tracking, analyzing and sharing employee performance-related data, employers and HR not only gain more insight on employees, but boost individual motivation and overall engagement.

Companies like The Container Store, for instance, are even using wearable tech, designed to improve communication within its stores, to track employees when they’re at work. Using the Theatro Wearable Computer, store management can access performance data, including how employees communicate with coworkers and customers and where they spend the most of their time.  

Applying big data analytics to employee performance can also help employers identify and acknowledge top performers, along with workers who may be struggling in their positions. Investing in talent management software can assist HR professionals in gathering and analyzing the data they need to evaluate individual performance levels.    

2. Better retention.

One big advantage of utilizing big data within the workplace is the opportunity to learn why employees leave -- and why they stay. With tools like employee satisfaction surveys, team assessments, social media, exit and stay interviews, etc. HR can essentially predict (and thus, prevent) employee attrition.

Take Xerox, for example. With the use of big data analytics, it was able to cut its attrition rate at call centers by 20 percent. By analyzing various sources of employee information, HR can more accurately identify issues that lead to lower employee engagement, as well as opportunities to boost engagement.

Related: Not Using Big Data for Hiring? You May Be Missing Out on the Best Candidates.

3. Better training.

Formal training programs, professional development events, lunch-and-learns with industry leaders -- employee training, while necessary, can be costly. In fact, The Association for Talent Development’s (ATD) 2014 State of the Industry survey of 340 organizations found that, on average, these organizations spent $1,208 per employee on training and development.

Measuring the potential and effectiveness of training initiatives, however, can ensure that employers are making wise investments concerning employee development. However, CEB’s 2014 Global Assessment Trends Report revealed that only 45 percent of its 1,400 respondents use measures of potential to guide development and succession plans.    

Employers should focus on obtaining data related to training program participation and outcome. Are employees taking advantage of the professional development opportunities being offered to them? Furthermore, are they applying what they learned through training programs, activities and events to their work?

Conducting regular performance appraisals or incorporating 360-degree performance reviews can help employers and HR better understand the effectiveness of their professional development efforts.

4. Better hires.

With the use of big data, HR has an opportunity to become more analytical and strategic in acquiring candidates. Not to mention, this data can help employers avoid making bad hires. Twenty-seven percent of employers said a bad hire cost them more than $50,000, according to a 2013 CareerBuilder survey of more than 6,000 HR professionals. Big data prevents big mistakes.   

Rather than relying heavily on repetitive resumes and “gut feeling” when it comes to hiring, take advantage of big data analytics. Learn more about potential hires through their various social media profiles, online resume databases, records of employment, applications, tests and even challenge-based games or contests, like Google’s Code Jam, a global, online software-writing contest that attracts over 7,500 people each year.  

This wealth of data can help employers and hiring managers identify great talent by sorting information into trends and narrowing down the talent pool.

The bottom line? Big data can help employers and HR professionals gain more insight on existing talent to better retain and train. Plus, turn to data to land the best quality talent in the future.

Related: Use Data as Your Secret Weapon to Find the Best Talent and Ensure Their Success

Matt Straz

Written By

Matt Straz is the founder and CEO of Namely, the HR and payroll platform for the world's most exciting companies.