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Three Steps To Get Started On Predictive Analytics Today

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Predictive Analytics Today

Predictive Analytics Today

Predictive Analytics Today-In order to build an effective people analytics practice, it’s best to break the process up into three steps. The first step is to obtain good historical data. The second is to visualize and trend that data into analytics to observe the patterns and build the right algorithms. The final step is to calibrate and refine the algorithm through testing. Let’s look at each step in more detail.

1. Historical Data To Build Metrics

Fortunately, most HR departments have a wealth of people data. Most of it is stored in a company’s human resource information system (HRIS). But it’s not uncommon for organizations to have several other systems that provide germane data, such as a talent management system, a recruiting system or even a separate payroll system. This data must be fed into a platform that can convert them to meaningful metrics using underlying formulas. For example, the HRIS would provide the termination dates of former employees, but these totals would need to be divided by the entire population to get a turnover metric. The same would be done for average time to hire a new person or some other such important metric.

As important, or even more so, to having history is that the data be accurate. The best way to ensure that data is accurate is with a system that can visualize the data into easy-to-understand graphics. It’s much easier to spot an anomaly on a trended chart than to decipher it through lines of a spreadsheet. Once you have such a tool, it’s good to establish a monthly checklist to continually check the quality of your data. Typical items on such a list would be questions like, how up to date is the information? Are there wrong data types in critical fields? Are there numerical outliers that are way beyond typical ranges?

Once you are satisfied that your data is of good quality and you have built your key metrics, it’s time to move onto the next step.

2. Generating Analytics And Building Algorithms

Once certain that the data is accurate, it’s time to trend the key metrics to analytics and start generating algorithms. Two common methodologies that are often used in this process, which can be used individually and combined, are regression analysis and scoring.

Regression analysis can be as simple as tracking trajectory. Once you have visualized your analytics, a regression line can be generated using statistical analysis to plot the most likely trajectory from the given data by formulating the relationships between dependent and independent variables. These are the Xs and Ys from your high school geometry class. There are several established techniques. One of the more common is the least squares technique, which can be used with either straight or plotted curves.

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Article Credit: Forbes

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