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Go Big or Go Home: How to Utilize Big Data for Human Resources

Chad Brooks
Chad Brooks
Editor Staff
Updated Dec 22, 2021

For many years now, businesses have been using big data for a variety of tasks.

Some of those tasks may include more effective marketing, streamlined operations, improved sales, or any number of items critical to the success of a company. However they use it, it’s clear that businesses see big data as a crucial tool for future growth.

For that reason, it’s baffling why more organizations aren’t using big data for human resources.

After all, a company’s payroll often accounts for up to half of their expenses; sometimes it’s even more than that. With such a large chunk of the budget dedicated to this important line-item, businesses can end up saving lots of money if they take advantage of big data analytics.

Talent Analytics

The trend of using big data for human resources is commonly referred to as talent analytics. While big data in marketing can gather and analyze data from customers, talent analytics gathers and analyzes data from a company’s current and prospective employees. The goal in most cases is to optimize what the company spends on its workers to identify the answers to questions like:

  • Where is the money going? Can it be put to better use elsewhere?
  • Is the business getting everything it can from the money allotted to workers?

These and many questions like them are what big data attempts to answer, and as more and more organizations implement big data solutions, they’re quickly finding news ways to prevent wasteful spending.

Related Article: Millennials In the Workplace: How Will They Affect Hiring?

Employee Retention

Let’s take one example to start with. One of the most difficult tasks for human resources is increasing retention among employees. Businesses with a high turnover rates end up spending thousands of dollars on employees that don’t end up staying with the company, which is a costly waste of resources.

With big data, HR representatives can get a more accurate picture of who is leaving and if there are any patterns among those seeking employment elsewhere. At the same time, big data can be analyzed to identify patterns for people choosing to stay with the company, eventually coming up with a model for employee retention.

Smarter Hiring Processes

Much of that starts with the hiring process, and big data has a key role to play there as well. When businesses look for new employees, they can look at data from job sites and social media to find people with the exact qualifications they want for a particular position.

Without big data, the chances of making a bad hire only increase, which can in turn be costly. One survey from CareerBuilder found that 27% of employers believed a single bad hire could cost them as much as $50,000. Reduce the possibility of hiring the wrong person for the job, and you can save the company significant amounts of money in the long run.

Quality Hiring Factors

Big data is essentially a crucial component in finding the right people for the right jobs within the organization. This goes beyond a simple list of criteria since every business is different. Oftentimes, what is thought of as a valuable characteristic for an employee to possess turns out to not be so important.

For instance, one company using big data found that people who had relevant job experience were not more likely to stay with the company in the long term. The same business also discovered the length of tenure at previous jobs did not impact employee performance.

Based off these findings, the company could then focus on more important factors when hiring, but data from a different company might come up with different findings. The point is that data will vary from organization to organization, and companies need to conduct their own big data analysis for hiring and training purposes.

Performance Measurement

Big data can also help make sure performance is more accurately measured. Companies may use big data to determine that some hourly employees aren’t being as productive during certain shifts.

They may also use it to identify employees that are considered top performers and reward them appropriately, thereby treating workers more fairly based on performance. Other businesses may use big data analytics to enhance their training lessons and ensure employees attend them and actually apply what they learn to their jobs. These tasks are much more difficult if big data isn’t involved.

All of these examples show how big data can be used to make human resources more efficient. Even if a company saves only a few percentage points in payroll, that still represents sizeable savings that can mean the difference between success and failure. Use of big data in HR is still relatively new, but as more advances are made, greater savings will likely be the result.

Image Credit:

fizkes / Getty Images

Chad Brooks
Chad Brooks Staff
Chad Brooks is a writer and editor with more than 20 years of media of experience. He has been with Business News Daily and for the past decade, having written and edited content focused specifically on small businesses and entrepreneurship. Chad spearheads coverage of small business communication services, including business phone systems, video conferencing services and conference call solutions. His work has appeared on The Huffington Post,,, Live Science, IT Tech News Daily, Tech News Daily, Security News Daily and Laptop Mag. Chad's first book, How to Start a Home-Based App Development Business, was published in 2014.