MBA 4th SEM

HR ANALYTICS

UNIT 2 NOTES

HUMAN RESOURCE PLANNING AND FORECASTING

Human Resource Planning (HRP) is a strategic process that ensures an organization

has the right quantity and quality of personnel to achieve its objectives. It involves
forecasting future staffing needs based on business goals and analyzing current
workforce capabilities. HRP considers factors such as turnover rates, expansion
plans, technological advancements, and changes in the external labour market to
anticipate future HR requirements. The process includes developing strategies to
recruit, select, develop, and retain employees effectively. By aligning HR
capabilities with organizational goals, HRP enables proactive management of
workforce needs, minimizes talent shortages or surpluses, and supports
organizational agility. It serves as a foundation for workforce management,
succession planning, and overall organizational effectiveness in adapting to
changing business environments and achieving long-term sustainability.

Objectives of Human Resource Planning:

• Forecasting Future Workforce Needs:

HRP aims to predict the organization’s future demand for employees in terms of
quantity and quality. This involves analyzing factors such as business growth
projections, market trends, technological advancements, and anticipated changes in
the workforce demographics. By forecasting future workforce needs, organizations
can ensure they have the right number of employees with the necessary skills and
competencies to meet operational requirements and strategic objectives.

• Anticipating Talent Surpluses and Shortages:

A primary objective of HRP is to identify potential imbalances between the supply

of and demand for talent within the organization. By assessing current workforce
capabilities and comparing them with future requirements, HRP helps in identifying
areas where there may be a surplus of employees (leading to redeployment or
downsizing strategies) or shortages (leading to recruitment, training, or development
initiatives).

• Supporting Recruitment and Selection Strategies:

Effective HRP enables organizations to plan and execute recruitment and selection
processes strategically. By identifying future skill requirements and talent gaps, HR
can develop targeted recruitment strategies to attract candidates with the necessary
qualifications and competencies. This ensures that recruitment efforts are aligned
with organizational needs and enhances the quality of new hires.

• Facilitating Training and Development Programs:

HRP plays a crucial role in identifying current and future skill gaps within the
workforce. This information informs the design and implementation of training and
development programs aimed at enhancing employees’ skills, knowledge, and
capabilities. By investing in training initiatives that address identified skill shortages,
organizations can improve employee performance, productivity, and job satisfaction
while preparing them for future roles and responsibilities.

• Supporting Succession Planning and Career Development:

Succession planning involves identifying and developing internal talent to fill key
leadership and critical roles within the organization. HRP provides valuable insights
into potential successors for key positions, ensuring a pipeline of qualified
candidates who are prepared to assume higher-level responsibilities. By linking HRP
with career development initiatives, organizations can nurture talent, increase
employee engagement, and reduce turnover by offering clear career progression
pathways.

• Enhancing Organizational Flexibility and Adaptability:

HRP enables organizations to respond proactively to changes in the external

environment, such as economic shifts, technological advancements, and industry
trends. By maintaining a flexible workforce planning strategy, organizations can
adjust their staffing levels and skills mix quickly and efficiently. This agility allows
them to capitalize on opportunities and mitigate risks, ensuring long-term
sustainability and competitive advantage.
Activities of Human Resource Planning:

1. Environmental Scanning:

Gathering and analyzing information about external factors that could impact the
organization’s workforce, such as economic conditions, technological
advancements, industry trends, and legislative changes. To identify opportunities
and threats in the external environment that may affect future workforce needs and
planning.

2. Demand Forecasting:

Estimating the future demand for human resources based on business goals, growth
projections, production or service requirements, and changes in organizational
structure. To quantify the number of employees and the skills needed to achieve
organizational objectives in the future.

3. Supply Forecasting:

Assessing the current internal supply of talent within the organization, including the
number of employees, their skills, qualifications, and career aspirations. To
determine the availability of internal resources to meet future demand, identifying
potential talent gaps or surpluses.

4. Gap Analysis:

Comparing the forecasted demand for human resources with the projected supply to
identify discrepancies or gaps. To pinpoint areas where there may be shortages or
surpluses of talent, guiding recruitment, training, development, and succession
planning efforts.

5. Strategic Workforce Planning:

Developing strategies and action plans to address identified gaps between demand
and supply of human resources. To align workforce planning initiatives with
organizational strategies, ensuring the organization has the right talent in the right
place at the right time.

6. Recruitment and Selection Planning:

Designing recruitment strategies and processes to attract and select candidates with
the necessary skills and qualifications identified during the planning process. To
ensure that recruitment efforts are aligned with workforce planning goals, addressing
immediate and future talent needs effectively.

7. Training and Development Planning:

Designing and implementing training and development programs to enhance the

skills, knowledge, and capabilities of employees. To close skill gaps identified
through HRP, preparing employees for current and future roles within the
organization.

8. Succession Planning:

Identifying and developing internal talent to fill key positions and critical roles
within the organization in the event of retirements, promotions, or unexpected
departures. To ensure continuity of leadership and maintain organizational stability
by grooming future leaders and ensuring a pipeline of qualified candidates.

9. Monitoring and Evaluation:

Continuously monitoring and evaluating the effectiveness of workforce planning

initiatives and adjusting strategies as needed. To measure the impact of HRP
activities on organizational performance, employee satisfaction, and the
achievement of strategic objectives.

QUANTITATIVE AND QUALITATIVE DIMENSIONS OF HR PLANNING:

Human Resource Planning (HRP) is a crucial process that ensures an organization

has the right number of employees, with the right skills, at the right time to achieve
its goals. HRP encompasses both quantitative and qualitative dimensions, each
addressing different aspects of workforce management.

Quantitative Dimensions of Human Resource Planning:

Quantitative HRP focuses on the numerical aspects of workforce management,

including forecasting the number of employees required and planning for changes
in workforce size. The goal is to ensure that the organization can meet its operational
needs without surplus or shortage of staff.
 1. Workforce Forecasting

• Demand Forecasting:

This involves predicting the future workforce needs based on factors such as
business growth, expansion plans, and changes in operational processes. Techniques
include trend analysis, which examines historical data to project future needs, and
statistical models that use various indicators to estimate future demand.

• Supply Forecasting:

This focuses on predicting the availability of internal and external labor. Internal
supply forecasting assesses current employee numbers, skills, and potential
retirements or resignations, while external supply forecasting looks at labor market
conditions and the availability of qualified candidates.

2. Employee Replacement Planning

• Succession Planning:

Identifying and preparing internal candidates to fill key positions in the event of
planned or unplanned vacancies. This involves assessing potential candidates’
readiness and developing their skills to ensure a smooth transition.

• Turnover Analysis:

Analyzing employee turnover rates and patterns to predict future staffing needs. This
includes calculating turnover rates, understanding reasons for departures, and
planning for replacements or adjustments.

3. Workforce Optimization

• Staffing Levels:

Determining the optimal number of employees required to meet operational

demands. This involves balancing the workload and employee capacity to avoid
under-staffing or over-staffing.

• Productivity Analysis:
Measuring employee productivity and its impact on workforce planning. This
includes analyzing performance data to ensure that staffing levels align with
productivity targets.

4. Cost Analysis

• Budgeting:

Estimating the cost of hiring, training, and compensating employees. This includes
evaluating the financial impact of workforce changes and ensuring that the HR
budget aligns with organizational goals.

• Cost-Benefit Analysis:

Assessing the financial implications of various HR decisions, such as hiring new

staff versus training existing employees, to ensure cost-effectiveness.

Qualitative Dimensions of Human Resource Planning:

Qualitative HRP focuses on the non-numerical aspects of workforce management,

emphasizing the skills, competencies, and attributes required for employees to
perform effectively. It addresses the qualitative factors that impact employee
performance and organizational success.

1. Skills and Competency Mapping

• Skill Requirements:

Identifying the specific skills and competencies needed for various roles within the
organization. This involves analyzing job descriptions, performance standards, and
future skills needs based on business strategy and technological advancements.

• Competency Development:

Developing and implementing training programs to build the necessary skills and
competencies in the workforce. This includes creating career development plans and
providing opportunities for continuous learning and growth.

2. Talent Management

• Recruitment and Selection:

Attracting and selecting candidates who possess the required skills, experience, and
cultural fit for the organization. This involves crafting effective job descriptions,
conducting thorough interviews, and using assessment tools to evaluate candidates.

• Employee Engagement:

Ensuring that employees are motivated, committed, and aligned with the
organization’s goals. This includes developing strategies to enhance job satisfaction,
recognition, and work-life balance.

3. Organizational Culture and Fit

• Cultural Alignment:

Ensuring that employees’ values and behaviors align with the organization’s culture
and values. This involves assessing cultural fit during the recruitment process and
fostering a positive organizational culture through leadership and management
practices.

• Change Management:

Managing the impact of organizational changes on employees. This includes

preparing and supporting employees through transitions, such as mergers,
restructuring, or shifts in business strategy.

4. Employee Development and Succession Planning

• Career Development:

Providing employees with opportunities for growth and advancement within the
organization. This includes identifying career paths, offering mentorship, and
supporting professional development initiatives.

• Leadership Development:

Preparing employees for leadership roles by identifying potential leaders and

providing them with the necessary training and experiences. This ensures a strong
pipeline of future leaders who can drive the organization’s success.

Integration of Quantitative and Qualitative Dimensions:

Effective HRP requires integrating both quantitative and qualitative dimensions to
create a comprehensive workforce strategy. While quantitative methods provide the
data needed for planning staffing levels and managing costs, qualitative methods
ensure that the right skills, competencies, and cultural fit are considered.

For example, while forecasting workforce needs (quantitative), it is also crucial to

assess whether the current workforce possesses the necessary skills and
competencies (qualitative). Similarly, succession planning (qualitative) should be
aligned with turnover analysis and replacement planning (quantitative) to ensure a
seamless transition and continuity of operations.

METHODS AND TECHNIQUES OFF HR DEMAND FORECASTING:

HR Demand forecasting must consider several factors-both external as well as

internal. Among the external factors are competition (foreign and domestic),
economic climate, laws and regulatory bodies, changes in technology, and social
factors. Internal factors include budget constraints, production levels, new products
and services, organisational structure, and employee separations. Demand
forecasting is common among organisations, though they may not do personnel-
supply forecasting.

Econometrics Models

The econometrics model analyzes the relationship of a dependent variable with an

independent variable. An example of a dependent variable are human resources and
an example of an independent variable are sales.

Statistical and mathematical techniques used throughout the econometrics model

allows human resource management professionals to estimate future demand with
significant accuracy.

HR Forecasting Techniques

HR Forecasting techniques vary from simple to sophisticated ones. Before

describing each technique, it may be stated that organizations generally follow more
than one technique. The techniques are:

Work Study Technique

Commonly referred to as workload analysis, the work study technique predicts
comprehensive activities and production for a specified future time period. The end
result of the work study technique is an estimation of the work hours required per
unit produced.

When estimating future work hours needed, human resource management

professionals must take into consideration-

• Resignations

• Dismissals

• Strikes

• Technical difficulties

• Absenteeism

• Turnover rate

Managerial Judgement

The managerial judgement technique includes the bottom up approach and top down
approach. In the bottom up approach, line managers communicate human resource
requirements to top management.

Applying the information received directly from their line managers, top
management forecasts human resource requirements. The end result of the bottom
up approach is a demand forecasting process that incorporates input from various
departments.

In the top-down approach of the managerial judgement technique, top management

begins the demand forecasting process. After their human resource forecasting is
completed, top management sends the forecast to departments for them to analyze
and accept.

A combination of the top down and bottom-up approach is referred to as the

participative approach. The participative approach allows department heads and top
management professionals to forecast human resource requirements collectively.
The participative approach is a human resource planning forecasting technique that
encourages collaboration while decreasing communication gaps. For this reason, the
participative approach is generally preferable to the top down and bottom up
approach.

1. Ratio-trend Analysis

This is the quickest HR forecasting technique. The technique involves studying past
ratios, say, between the number of workers and sales in an organization and
forecasting future ratios, making some allowance or changes in the organization or
its methods.

2. Regression Analysis

This is similar to the ratio-trend analysis in that forecast is based on the relationship
between sales volume and employee size. However, regression analysis is more
statistically sophisticated. A firm first draws a diagram depicting the relationship
between sales and workforce size.

It then calculates a regression line a line that cuts right through the center of the
points on the diagram. By observing the regression line, one can find out the number
of employees required at each volume of sales.

3. Work-study Techniques

Work-study techniques can be used when it is possible to apply work measurement

to calculate the length of operations and the amount of labor required.

The starting point in a manufacturing company is the production budget, prepared

in terms of volumes of saleable products for the company as a whole, or volumes of
output for individual departments.

The budgets of productive hours are then compiled using standard hours for direct
labour. The standard hours per unit of output are then multiplied by the planned
volume of units to be produced to give the total number of planned hours for the
period.

4. Delphi Techniques
Delphi Technique Named after the ancient Greek Oracle at the city of Delphi, the
Delphi technique is a method of forecasting personnel needs. It solicits estimates of
personnel needs from a group of experts, usually managers. The human resource
planning (HRP) experts act as intermediaries, summarize the various responses and
report the findings back to the experts.

5. Flow Models

Flow models are very frequently associated with forecasting personnel needs. The
simplest one is called the Markov model. In this technique, the forecasters will:

1. Determine the time that should be covered. Shorter lengths of time are
generally more accurate than longer ones. However, the time horizon depends
on the length of the HR plan which, in tum, is determined by the strategic plan
of the organization.

2. Establish categories, also called states, to which employees can be assigned.

These categories must not overlap and must take into account every possible
category to which an individual can be assigned. The number of states can
neither be too large nor too small.

3. Count annual movements (also called ‘ flows’) among states for several time
periods. These states are defined as absorbing (gains or losses to the company)
or non-absorbing (change in position levels or employment status). Losses
include death or disability, absences, resignations, and retirements. Gains
include hiring, rehiring, transfer, and movement by position level.

4. Estimate the probability of transitions from one state to another based on past
trends. Demand is a function of replacing those who make a transition.

There are alternatives to the simple Markov model. One, called the semi-Markov,
takes into account not just the category but also the tenure of individuals in each
category. After all, the likelihood of movement increases with tenure.

Another method is called the vacancy model, which predicts probabilities of

movement and the number of vacancies. While the semi-Markov model helps
estimate movement among those whose situations and tenure are similar, the
vacancy model produces the best results for an organization.
Markov analysis is advantageous because it makes sense to decision-makers. They
can easily understand its underlying assumptions.

They are, therefore, likely to accept results. The disadvantages include:

(i) Heavy reliance on past-oriented data, which may not be accurate in periods of
turbulent change.

(ii) Accuracy in forecasts about individuals is sacrificed to achieve accuracy across

groups.

DATA BASE FOR MANPOWER FORECASTING:

Database has a crucial role to play in manpower forecasting as it determines the

methodologies that can be adopted. There is a different database for macro and micro
that are as follows:

Data Base for Micro Forecasting:

Personal Data Module

Identification particulars, educational particulars, educational qualifications.

Recruitment Module

Date of recruitment, grading in aptitude tests, grading in leadership tests, overall

grading, job preference and choice etc.

Job Experience Module

Placement history, grade promotions, tasks performed grade-wise, significant

contributions etc.

Performance Appraisal Module

Performance appraisal at each job held, job evaluation on the basis of job description,
communication rating, rating of interpersonal relationships, rating of behaviour in
group commitment of corporate goals etc.

Training and Development Module

Nature of training received at each level, individuals evaluation of effectiveness of
training, individual assessment of training needs vis-à-vis currently being performed
etc.

Miscellaneous Module

Record of compensation and benefits received health status information relating

personal problems which calls for the attention by the authorities, security needs etc.

Database for Macro Forecasting

For macro forecasting, it would be ideal to have comparable data on the following
items over a period of years in the past.

Population Statistics:

Under it population of country by age, sex, education, economic activities, status,

migration, marital status, region and rural-urban distribution are needed.

Data on Economic Parameters

Under it data are required on time series basis are inputs, output, capital, investment,
wages, productivity, value added, depreciation by industry, consumption, savings
and expenditure on health by income start of population in rural-urban areas of each
region.

Information on Technologies

Details about existing technologies are needed by industry specifying the

implications of each technology for employment, generation and investment. Similar
information is also needed on emerging technologies by industry.

RECRUITMENT AND SELECTION ANALYTICS:

Recruitment analytics is the discovery and interpretation of meaningful patterns

for sourcing, selecting, and hiring. This means that data is used to find and explain
patterns in data. For example, if new hires leave within the first three months, this
may indicate a mismatch with the job description and the actual role, selection
mistakes or a bad onboarding process. This is an example of recruitment analytics.

Process:
Gather performance data

With so much data to keep track of and less time than ever to analyze it, data-based
recruiting helps make every hire count. Optimize your candidate hiring process by
calculating and tracking key recruiting performance indicators (KPIs) like time-to-
fill, time-to-hire, age-of-job, and offer acceptance rate straight from your recruitment
KPI dashboard.

Streamline your sourcing with Source Boosters

Having an idea about what type of candidate you’re looking for is work half done.
A big part of the job is discovering where to identify great talent. With Source
Boosters, you can set a physical location based on a radius search and instantly find
talent by job title, skills, and more. Streamlining your sourcing with the help of data
ensures better quality hires while saving significant amount of time.

Streamline your sourcing with Source Boosters

Having an idea about what type of candidate you’re looking for is work half done.
A big part of the job is discovering where to identify great talent. With Source
Boosters, you can set a physical location based on a radius search and instantly find
talent by job title, skills, and more. Streamlining your sourcing with the help of data
ensures better quality hires while saving significant amount of time.

Identify sources for the best candidates

Make the most of every penny you spend with our recruitment analytics software.
Monitor the status of your job opening, track how many quality hires you’re getting
from each source, identify which sources have the highest turnover rate, and much
more. Use recruitment analysis dashboard to learn where your best performers found
your job listing so you can focus on that source and drop ones that aren’t working
well. Make your recruitment process more cost-effective using actionable insights
with recruitment analytics tools.

Recruitment dashboards to attain great hires:

• Time to hire: The time it takes to identify and recruit a candidate to fill a
vacant position.
 • Time to fill: The time it takes to fill vacant positions.

• Source of hire: Identify which hiring source you use to give you the highest
returns

• Cost per hire: Amount spent by your organization to acquire a candidate

• Candidate experience: How candidates feel about your company once they
experience your hiring process.

• Offer acceptance rate: Compares the number of candidates who have

presented an offer versus the number of candidates who accepted the offer.

• Age of job: The time period of an open job.

Various recruitment metrics

• Time to hire: The time it takes to identify and recruit a candidate to fill a
vacant position.

• Time to fill: The time it takes to fill vacant positions.

• Source of hire: Identity which hiring source you use to give you the highest
returns

• Cost per hire: Amount spent by the organization to acquire a candidate

• Candidate experience: How candidates feel about the company once they
experience your hiring process.

• Offer acceptance rate: Compares the number of candidates who have been
presented with an offer versus the number of candidates who accepted the
offer.

• Age of job: The time period of an open job.

• First-year attrition: Candidates who leave in their first year of job fail to
become productive and usually cost a lot of money.

• Quality of Hire: An indicator of the first-year performance of a candidate.

 • Selection Ratio: The selection ratio usually refers to the number of hired
candidates compared to the total number of candidates.

• Selection Channel Effectiveness: The ratio percentage of applications with

the percentage of impressions of the positions.

Different Analytics:

Level 1: Operational reporting

In level 1, recruitment analytics is descriptive. They represent the well-known core

recruiting metrics. Metrics include the cost of hiring, source of hire, applicants per
job opening, selection ratio, time to fill, time to hire, hiring manager satisfaction,
and more.

Level 2: Advanced reporting

Level 2 represents advanced reporting. Reporting on these measurements still

doesn’t require advanced statistical tools but it does require the combination of
multiple data sources to be generated.

An example is the candidate experience. In order to assess the candidate experience,

different phases in the recruitment cycle will have to be mapped and the candidate
experience needs to be measured or otherwise collected. This can happen through
surveys integrated into the candidate software or through separate questionnaires.

Level 3: Analytics

Level 3 represents strategic and predictive analytics in recruitment. Strategic

analytics includes segmentation, statistical analysis, and the development of people
models. Predictive analytics involves the development of predictive models and
strategic and scenario planning.

EVALUATING RELIABILTY AND VALIDITY OF SELECTION MODELS:

Selection a best suitable candidate for a job is an essential function of HR

department. And, the effective selection is depending to a large degree on the basic
testing concepts of validity and reliability.
Reliability: It is a test’s first major requirement and refers to its consistency. A test
is said to be reliable only when the result an outcome is consistent on identical test
obtained form same person at two different occasions.

Validity (Legal acceptance): It measures to prove that something is true or correct.

In other words, validity tells us whether the test is measuring what we think it’s
supposed to be measuring.

“Reliability means that the selection methods, tests and ensuing results are consistent
and do not vary with time, place or different subjects”. Or as Cowling puts it:
“Reliability is a measure of the consistency with which a predictor continues to
predict performance with the same degree of success”. That means that, for instance,
two interviews at a different time and place, with different interviewers and
questions but under otherwise same conditions and with the same applicants will
bring the same result; namely the best candidate should still be the best and the
interviewees who failed should still fail. It is also possible to maintain the conditions,
the applicants and the structure but to change the other parameters of the assessment.
By comparing the results, information about the reliability can be gained. However
it is difficult to conduct these tests due to several constraints.

Interviews vary in many ways, nonetheless one can distinguish three main forms:
The individual interview, where each participant has to compete with only one other
speaker, or sequential interviews which take the form of a series of individual
interviews. Besides those we can find panel interviews in which several persons
conduct the interrogation (Cowling defines it as meaning that the applicant is faced
with three or more interviewers). We can therefore imagine different situations with
a different number and position of the interviewers: the departmental manager in
small firms, a personnel officer with technical assistance, panels of senior executives
sitting together, large committees in some of the public services, and variations and
combinations of all these possibilities.

Validity can be of following types:

• Content validity: Content validity means, the content of the test item
correlates highly with the job content. In other words, the content that choose
for data entry test is a representative sample of what the person needs to know
for the job, then the test is probably content valid.
 • Predictive validity: It means the performance of an employees or test score
highly correlates with the future requirement of the job.

• Concurrent validity: It means, the degree to which test score correlates with
job performance (i.e. those we do well in the test do well in job).

• Construct validity: It means the relation between the job and its score in
practical aspects. In other words, the extent to which the test measures the
psychological quality or quantifies the psychological aspect of an individual.

Types of Reliability Estimates

Test-retest reliability indicates the repeatability of test scores with the passage of
time. This estimate also reflects the stability of the characteristic or construct being
measured by the test.

Some constructs are more stable than others. For example, an individual’s reading
ability is more stable over a particular period of time than that individual’s anxiety
level. Therefore, you would expect a higher test-retest reliability coefficient on a
reading test than you would on a test that measures anxiety. For constructs that are
expected to vary over time, an acceptable test-retest reliability coefficient may be
lower.

Alternate or parallel form reliability indicates how consistent test scores are likely
to be if a person takes two or more forms of a test.

A high parallel form reliability coefficient indicates that the different forms of the
test are very similar which means that it makes virtually no difference which version
of the test a person takes. On the other hand, a low parallel form reliability coefficient
suggests that the different forms are probably not comparable; they may be
measuring different things and therefore cannot be used interchangeably.

Inter-rater reliability indicates how consistent test scores are likely to be if the test is
scored by two or more raters.

On some tests, raters evaluate responses to questions and determine the score.
Differences in judgments among raters are likely to produce variations in test scores.
A high inter-rater reliability coefficient indicates that the judgment process is stable
and the resulting scores are reliable.
Inter-rater reliability coefficients are typically lower than other types of reliability
estimates. However, it is possible to obtain higher levels of inter-rater reliabilities if
raters are appropriately trained.

Internal consistency reliability indicates the extent to which items on a test measure
the same thing.

A high internal consistency reliability coefficient for a test indicates that the items
on the test are very similar to each other in content (homogeneous). It is important
to note that the length of a test can affect internal consistency reliability. For
example, a very lengthy test can spuriously inflate the reliability coefficient.

Tests that measure multiple characteristics are usually divided into distinct
components. Manuals for such tests typically report a separate internal consistency
reliability coefficient for each component in addition to one for the whole test.

Test manuals and reviews report several kinds of internal consistency reliability
estimates. Each type of estimate is appropriate under certain circumstances. The test
manual should explain why a particular estimate is reported.

FINDING OUT SELECTION BIAS:

Bias in recruitment forms prejudice and discriminatory hiring decisions against one
person or a group of people. Candidates suffer in the hiring process and miss out on
job opportunities due to bias motives. Unconscious bias happens outside of
conscious awareness, recruiters may make hiring decisions stemmed from
subconscious emotion, perception and stereotypes.

Selection bias is the bias introduced by the selection of individuals, groups, or data
for analysis in such a way that proper randomization is not achieved, thereby failing
to ensure that the sample obtained is representative of the population intended to be
analyzed. It is sometimes referred to as the selection effect. The phrase “selection
bias” most often refers to the distortion of a statistical analysis, resulting from the
method of collecting samples. If the selection bias is not taken into account, then
some conclusions of the study may be false.

Leading with intuition

The sole reason to hire should not be led by human intuition. A ‘feeling’ or a ‘gut
instinct’ is not strong enough as a reason to hire. They are subjective and difficult to
justify. Whilst also lacking validity.

Every recruiter’s intuition is different, which makes it difficult to standardise for a

consistent screening process. During this stage, bias can occur because human
emotion takes over. Causing the reason to hire to shift focus away from skillset,
experience and true job potential.

Hiring someone similar to yourself

The case of hiring a ‘mini-me’. This means a recruiter will favour those who are
similar to themselves to fill a position. Recruiters can become prone to this type of
unconscious bias during early hiring stages where a candidate’s job application
reflects similar characteristic to themselves. For example, if the school in which they
attended or where they live is the same as the candidate, recruiters may feel an instant
pull towards that application because they share similar traits. Which will
consequently lead to the presumption that they will make a good hire. This can also
later occur further down the hiring process during the interview stage.

Affect heuristics

This is when the recruiter mentally takes shortcuts to reach a conclusion about a
candidate’s ability to do the job, without carefully examining all of the evidence
first.

Quite simply you are judging someone’s suitability for a position based on
superficial factors that have no say in how they would carry out the task at hand.

Comparing job applications against one another

During the job application screening process, there becomes a tendency to compare
CVs/resumes against one another. Adopting one high-performance job application
as the ‘standard’, to which all others must compete with. However, in doing so, the
risk of bias increases. One recruiter’s vision of the perfect CV will differ between
individuals within the hiring team.

Halo effect
This hiring bias is similar to the expectation anchor bias as it occurs when the
recruiter forgoes proper investigation of a candidate’s background, choosing instead
to focus too heavily on one positive aspect of a candidate, like where they went to
school, or what sports they do, and rely on that one thing when making decisions.

Similarity attraction bias

It is human nature to want to surround ourselves with people we like and feel we
have a rapport with. And the work environment is no different. If you’re going to be
spending a third of your day working alongside someone, you want to know that you
will get on with them.

Overconfidence bias

The overconfidence bias occurs when the recruiter is so confident in their own
abilities to either pick a good candidate or to eliminate the supposed bad ones, that
they allow confirmation bias to creep in, to justify their decisions. The recruiter
allows their subjective confidence to cloud their objectiveness, and they tend to rely
on so-called intuition but we’ll get to that bias later.

PREDICTING THE PERFORMANCE AND THE TURNOVER:

Employee turnover refers to the percentage of workers who leave an organization

and are replaced by new employees. It is very costly for organizations, where costs
include but not limited to: separation, vacancy, recruitment, training and
replacement. On average, organizations invest between four weeks and three months
training new employees. This investment would be a loss for the company if the new
employee decided to leave the first year. Furthermore, organizations such as
consulting firms would suffer from deterioration in customer satisfaction due to
regular changes in Account Reps and/or consultants that would lead to loss of
businesses with clients.

Pre-hire Predictors

Are pre-hire predictors of turnover also effective indicators of work performance?

Several indicators, such as biodata (biographical data) and pre-hire attitudes, have
been explored for the purpose of answering that very question. In particular, three
types of information are especially strong indicators of job performance and
turnover.

• Biodata: Predictors that represent pre-hire embeddedness in the organization

(employee referral; number of friends and family) and habitual commitment
(tenure in prior job; number of jobs in last five years)

• Pre-hire attitudes: Includes the applicant’s self-confidence and confidence

with decisions, as well as the applicant’s desire for a job and pre-hire intent to
quit

• Personality traits: Conscientiousness (being dependable and reliable) and

Emotional Stability (ex. Individuals who have low emotional stability tend to
have negative perceptions of themselves and their environment.)

Turnover Decisions and Job Performance

Some notable indicators of which employees are likely to remain working for a
company six months after hire include: pre-hire embeddedness, habitual
commitment, personal confidence, motivation for employment, conscientiousness,
and emotional stability. Further, beyond the period of six months post hire, up to two
years later, the remaining two indicators for voluntary, avoidable turnover are
conscientiousness and emotional stability. The number of jobs held over the previous
five years was a better indicator of early turnover, whereas tenure on the most recent
job was more predictive of early job performance. The good news is that most
turnover decisions are “functional,” meaning that those employees who tend to stay
in an organization tend to be the better performers.

Analytics is one such tool that can help organizations predict employees’
performance based on historical and real-time data. It provides both retrospective as
well as forward-looking analysis.

Predictive analytics can be applied to the workforce to identify traits/patterns that

account for bad or good performance on an individual and team basis. Since
analytics is an amalgamation of powerful mathematical algorithms, it also gives
objective insight into their work preferences and the factors that drive their
performance.
There are many approaches to predict program ‘s performance on computers. They
can be roughly divided into three major categories:

• Simulation-based prediction

• Profile-based prediction

• Analytical modelling

Predicting employee turnover rates with data

Data-driven results

Thanks to advancements and innovations surrounding modern technology, the

average HR employee can actually glean a great deal of insight into the likelihood
of employee turnover.

What was once relegated to guessing games can now be laid out clearly on a
spreadsheet for any set of curious eyes to peruse.

Provided you’re willing to tackle the slight learning curve that comes along with any
new tech skill, you’ll be well-poised to make data-driven predictions about retention
and turnover rates. Through the use of predictive analytics, you’ll be able to gain
valuable insight into employee flight risk and manage potential issues before they
arise.

Predictive analytics

Predictive analytics rely on the use of data, machine learning techniques, and
statistical algorithms. These three factors, when combined, can do tremendous work
in identifying the likelihood of future outcomes– in this case, those outcomes will
centre around turnover and retention rates.

The adage about history repeating itself is at the centre of predictive analytics.
Calculations and predictions made through the use of predictive analytics are based
on factual and historical data; that data is used to assess what’s likely to happen in
the future based on what’s happened in the past.

Any project that relies on predictive analytics is only as good as the data that’s fed
into it. Make sure that the data you collect is entirely factual, valid, and useful to
your purpose. One commonly-used phrase in the realm of data analysis as a whole
goes something like “garbage in equals garbage out.” Luckily for you, it follows that
quality in translates to quality out.

Implementing data analisation:

Practically enough, most predictive employee flight risk models rely on employee
data that’s already stored in the human resource system of an organisation. It’s easy
to pull out the stats you need to get insight and results into what the future could
look like. In many cases, the following pieces of information are critical to
determining future employee turnover based on predictive analytics:

• Duration of employment

• Time elapsed since previous promotion (if any)

• Compensation level

• Job performance scores and ratings

• Commute time.