Predictive analytics is an upcoming trend in Human Resources (HR). Recruitment tools predict high performers, and increasingly companies are able to predict which employee is likely to leave. In this article, we will explain what HR predictive analytics are and how they can be a real game-changer for HR departments.

You are watching: Predictive analytics is used for all of the following except

We will also discuss seven real-life examples of predictive analytics in HR, two of which are detailed case studies.

The logic behind HR predictive analytics

Do you know what your personal credit score, the Oakland Athletics baseball team manager Billy Bean from the movie Moneyball and your Match.com profile have in common? They all combine big data and predictive analytics in order to predict the future.

Predictive data analytics are everywhere. It is in its essence a technology that learns from existing data, and it uses this to forecast individual behavior. This means that predictions are very specific. In the movie Moneyball, predictive analytics were used to predict the potential success of individual baseball players.


In a similar way, your personal credit card score uses historical data from millions of people in the past to predict whether or not you can pay back the loan you want to take out for your new car.

So how do these predictive analytics work? Predictive analytics involves a set of various statistical (data mining) techniques that analyze historical data and outcomes. These techniques then try to create a formula, or algorithm, that best mimics these historical outcomes. This algorithm then uses current data to predict outcomes in the future.


People Analytics Resource Library

Download our list of key HR Analytics resources (90+) that will help you improve your expertise and initiatives. Your one-stop-shop for People Analytics!


Predictive analytics in practice

Say there is a playground next to your house. For the past two weeks, you wrote down if there were kids playing on the playground or not. You also wrote down if it was sunny, rainy or cloudy, the temperature and the humidity. Based on the data you collected, would you be able to predict if kids will be playing on the playground on a specific day?

*
*
*
*
*

These people are not only damaging to the company; they are highly toxic to the general work environment. Previous research suggested that one toxic employee in a team would cause productivity to decrease by 30% to 40%. On top of that, good employees are more likely to quit when they have to work together with toxic colleagues.

The company used a dataset of 63,000 employees. In this dataset, they marked which employees were involuntarily terminated due to workplace violence, falsification of documents, drugs, and alcohol abuse, and other policy violations. Based on these criteria, around 4% of all employees could be classified as being ‘toxic’.

After analyzing the dataset, Cornerstone identified a number of key characteristics of toxic people.

Toxic people:1. are self-proclaimed rule-followers;2. score low on attendance and dependability;3. and have a low service orientation.

Remarkably, the study did not find the previously reported high levels of productivity loss in the short term. However, it did find toxic behavior to be contagious. People who work together with toxic colleagues are also more likely to quit. Additionally, the study hypothesized that toxic colleagues contribute to long-term stress and burnout among other employees.

In the end, Cornerstone proved that hiring a toxic employee will cost the employer $12,800 on average, versus an average of $4,000 for a non-toxic employee. This excludes the long-term (and costly) productivity loss through burnout and other negative effects. By fine-tuning the hiring process, companies can prevent hiring candidates who are likely to become toxic and create a healthier working environment.

A game-changer for HR

As these previous examples show, the results of applying predictive people analytics can be astonishing. HR departments can potentially save (or earn) their company millions of dollars. Additionally, HR can help their managers and executives make better decisions by applying predictive analytics and using the right HR metrics.

The potential of predictive people analytics demonstrated by these business cases (and other HR analytics case studies) makes it clear that predictive HR analytics are here to stay. They are the game changer that enables HR to not only assess how employees work but also to predict and optimize the impact of people policies on both the employees and the business.

See more: Dota 2 After Several Attempts To Connect, Here'S How To Fix That

To learn more about the application of predictive analytics and HR analytics in general, check out these 11 online HR analytics courses, or our HR Analytics Academy in which we offer courses tailor-made for HR professionals who want to learn more about analytics.