Big data is changing the way companies across industries perform vital functions, from the way credit unions are assessing loan risk to the way retailers are deciding when to release the newest product lines. Now, companies can use the same analytics capabilities to make better hiring decisions, according to The Wall Street Journal.
Payroll costs are usually among the largest expenses companies absorb. It is beneficial to keep qualified and trained staff members on board for longer, since it's costlier to recruit and educate new talent. Big data is now being used by some human resources teams to determine which candidates are most likely to stick around, making initial investments worthwhile, the source reports.
This enables companies to go beyond the hunches or personal biases of hiring managers to determine statistically which employees can best perform the necessary job functions, according to Venture Beat. Xerox started doing this and recognized an improvement in the number of hires who stick around past the six-month date - the point at which the company recovers its initial investment, The Wall Street Journal adds. There are also dangers that companies must account for. If they do not maintain data quality
, they could use analytics that accidentally rule out employees from protected groups, such as those with disabilities or from certain ethnic backgrounds.