The game changing attribute of big data has made a big hit among enterprises across the globe. Big data has opened gates for innovation in every aspect of the corporate world, from recruitment to sales. In short, everyone can have a piece of the big data pie. Let us take a closer look into some practical experiences in the corporate world benefitting from big data.
Big Data Making a Difference
Xerox (XRX, Financial), until recently, followed the conventional recruitment practice for its call centers by giving more weight to experienced candidates; however, after conducting a staffing data analysis through big data, the whole procedure went through a change.
A computer program proposed that experience doesn't matter. The software indicated that what does matter in a good call-center worker — one who won't quit before the company recoups its $5,000 investment in training — is personality. Data shows that creative types tend to stick around for the necessary six months; inquisitive people often don't. This new behavioral data matrix called for a new selection process to be ushered in.
"Some of the assumptions we had weren't valid," said Connie Harvey, Xerox's chief operating officer of commercial services.
The software analyzed human resource domain data acquired from big data. After a six-month trial, Xerox was able to successfully reduce attrition by a fifth. Xerox now leaves all hiring for its 48,700 call-center jobs to the software program, which asks applicants to choose between statements like: "I ask more questions than most people do," and "People tend to trust what I say."
Big Data Fanfare
As big data is changing the way business is conducted, more and more corporate bigwigs are joining the big data club to revamp their business activities and boost their profitability. Jobs that were once filled on the basis of work history and interviews, are left to personality tests and data analysis, as employers aim for more than just a hunch that a person will do the job well. Under pressure to cut costs and boost productivity, employers are trying to predict specific outcomes, such as whether a prospective hire will quit too soon, file disability claims, or steal.
Powerful computers and more sophisticated software have empowered employers to evaluate more candidates, amass more data, and peer more deeply into applicants' personal lives and interests.
"The public gets less comfortable when you're using extrinsic or personal factors," said Dennis Doverspike, a professor of industrial and organizational psychology at the University of Akron in Ohio.
These new hiring tools are part of an extensive effort to gather and analyze employee data. Globally, enterprise spending on so-called talent-management software rose to $3.8 billion in 2011, up by 15% from 2010, according to research firm Gartner (IT, Financial).
Big tech companies are jockeying to serve the growing market. Last month, International Business Machines Corp. (IBM, Financial) agreed to pay $1.3 billion for Kenexa Corp. (KNXA, Financial) which uses data analysis to help companies recruit and retain staffs. Oracle Corp. (ORCL) acquired job-applicant tracking system company Taleo (TLEO) for $1.9 billion in February, and Germany's SAP AG (SAP, Financial) bought SuccessFactors (SFSF), which specializes in performance tracking, recruiting and compensation, for $3.4 billion in December.
Xerox is being advised by Evolv Inc., a San Francisco start-up that helps companies hire and manage hourly workers. By putting applicants through a battery of tests and then tracking their job performance, Evolv has developed a model for the ideal call center worker. The data indicates that people who live near their job location, have reliable transportation, and use one or more social networks, but not more than four, tends not to be overly inquisitive or empathetic, but is creative and has better chance of sticking to the job, thus cutting down on the fear factor of attrition.
Applicants for the job take a 30-minute test that screens them for personality traits and puts them through scenarios they might encounter on the job. Then the program spits out a score: red for low potential, yellow for medium potential or green for high potential, according to their answers reflecting their favorability matrix toward the job. Xerox accepts some yellows if it thinks it can train them in those areas, but mostly hires greens.
Laszlo Bock, a senior vice president at Google Inc. (GOOG, Financial) and an Evolv director, said software will supplement, if not supplant, many of the personnel decisions made by instinct and intuition, thus improving recruitment quality by reducing the influence of a manager's biases. While these software and analytics tools are currently being used for recruiting new hires, with time, they will evolve into a full-time Human Resource department solution provider assisting in decisions of pay hikes and promotions, too.Â
The Big Take Away
Big data has undoubtedly provided an edge in recruitment and staffing, and will cut down on heavy losses incurred by companies due to rapid attritions. Industries like the IT and ITES sectors, where the perils of attrition looms large, walking the big data path can prove its worth by increasing the cost-to-earnings ratio. As individual analysts and investors, it would be best to keep a close watch on the companies using big data, and take positions in them to reap the benefits of rising earnings through effective resource utilization.
