Made famous by the movie “Moneyball,” sabermetrics refers to the use of statistical analysis to formulate a high-quality sports team at a minimum cost. The concept has similar applications to employers outside the sports realm.
A growing number of companies are trying to hit a home run in assembling their teams by employing people analytics – a collection of data from surveys, job history, interviews and any information one can gather about potential and existing employees.
Sabermetrics was used to great success by the Oakland Athletics, whose improbable 2002 20-game winning streak and playoff appearance despite one of the lowest payrolls in Major League Baseball was depicted in “Moneyball,” starring Brad Pitt as A’s General Manager Billy Beane, the team’s architect. Over the last decade, this risk-versus-reward approach to making staffing decisions has been growing.
“‘Moneyball’ is a good comparison to make because we’re taking employee data and using it the same way sports teams would,” Sayeedul Islam, a professor in the department of psychology at Farmingdale State College, said.
People analytics is creating a new path for human resources departments as they research prospective employees for large corporations.
“You can collect data through surveys, interviews and things like that,” Brian Parks, a manager in PricewaterhouseCoopers’ private company services group in Melville, explained. “It would be a matter of then collecting that data and being able to interpret it to make decisions that will benefit the company. There is software out there and different platforms to interpret the data to make it more meaningful.”
Google, for instance, is getting in on the trend, introducing “re:Work,” which provides case studies on people analytics to show employers “the biggest ways you can make an impact in your workplace,” according to the tech giant’s website.
Beyond using people analytics to make optimal hiring decisions and increase retention rates, the practice can allow companies to provide useful information to individual departments like finance and sales.
“You won’t be limiting the data to HR, but you’ll be able to share it with everyone,” Parks said. “If you think of something like sales, your company is going to be tracking performance and different measures of sales while lining that up with employee data. You can find out if people aren’t performing well or if people aren’t properly trained in a particular area. Maybe you need to bring more people on for that particular region.”
The impact people analytics is having on the hiring front is stirring up employee data in a whole new way. Instead of bringing people aboard based solely on interviews and resumes, human resources departments now have access to more data than ever before.
With the influx of information, HR departments can use analytics to predict which candidates will stay with an organization for a long period of time, “which is going to save a lot of time for the company in the long run because you won’t have the challenges that come along with employee turnover,” Parks said. “That’s definitely the main area of improvement that we’ve seen.”
Sales teams can also take advantage of the data, pitching to potential clients and investors just how productive their organization is. With more precise information about employees and how long they will continue working at that job, companies can use the data in a broader fashion to improve overall performance.
As people analytics becomes more mainstream, college students are being taught how to find a job in the ever-changing employment market.
“Students interested in careers in human resources, professional development or consulting should learn this type of material so they can get those types of jobs,” Islam, who also teaches at Hofstra University and Touro College, said. “From an applicant side of things, they should know what to expect. A lot of times, students don’t know they have to face some type of testing before they even get hired.”
Joseph Wolkin writes for BridgeTower Media.