Optimize Your Greatest Asset -- Your People: How to Apply Analytics to Big Data to Improve Your Human Capital Investments

Chapter 2What Exactly Is Predictive Analytics, and Why Is It Useful?

Given that it's a nascent field in HR, there's a pretty large range of work that practitioners consider to fall under the umbrella of analytics. We broadly define analytics as the discovery of meaningful patterns in data to understand the drivers of performance. Our focus is synthesizing data from within and outside of HR to predictively improve investments in people. The ultimate goal, which is transformation (or optimization) of investments, uses past performance to attain the best possible future outcomes. This is what analysts in other disciplines mean when they use the term predictive analytics, or using quantitative methods to derive insights that shape business decisions and improve business performance. Another definition of predictive analytics comes from Forrester Research: “Techniques, tools, and technologies that use data to find predictive models—models that can predict outcomes with a significant probability of accuracy.”¹

In all of this defining, it can be difficult to know whether an analysis is truly a study in predictive analytics. While we don't find it particularly useful to create a universal Venn diagram of HR analytics projects, we do feel that it's important to distinguish between two key disciplines that are frequently confused by HR practitioners: workforce planning and workforce optimization.

Workforce Planning

The Conference Board corralled a group of talent management executives ...