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Talent Analytics: Why Do You Need It?

Morgan Lichtenstein
5 min read

What is talent analytics?

Talent analytics is a data-driven method for managing people on the job. Using this approach, managers make better decisions about their people based on data analysis instead of using their gut instincts.

The method uses data and sophisticated analysis to generate insights into people-related problems such as performance evaluation, recruiting, collaboration, and leadership.

The kinds of decisions that talent analysis can help with include things like which department a new hire would thrive best in, how to motivate a demoralized workforce, and whether there’s any chance a team member can successfully make the transition to a position higher up in the organization.

A company can use talent analytics to figure out what employees value most in workplace culture and then use that information to boost retention rates.

In this article, you’ll discover the three components of talent analytics, how to create buy-in with the method, and read about some stunning examples of its use in the real world.

Let’s get started!

Other names for talent analytics 

Talent analytics is nothing new.

In fact, it’s been around for decades under other names.

Here are a few you might have heard:

  • Human resource analytics
  • Workforce analytics
  • Human capital analytics 
  • People analytics

Not only for big companies

Talent analytics used to be just for big companies like Google, Microsoft, and Apple.

Not anymore!

In the past few years, small and medium-sized businesses have started to see the enormous potential in this data-driven approach.

It all starts with the right tools

To collect the data necessary to cultivate keen insights into your workforce, you first need a data-collecting infrastructure.

This includes things like a reporting dashboard with critical talent analytics metrics and regularly conducting surveys of your employees.

The essential components of talent analytics 

There are three necessary components of talent analytics:

Hiring analytics 

You use analytics to evaluate crucial hiring metrics such as average length of time to source talent, cost per hire, and time to fill.

By rigorously analyzing work behaviors, personality traits, and attitudes over time, a talent analyst can create a more gratifying and productive work experience for all employees.

Measuring hiring metrics is essential to understanding how efficient your company is in attracting top-tier talent and retaining them. Using data to make decisions will make all your decisions more objective and less biased.

This should dramatically increase the effectiveness of your hiring process, resulting in fewer failed hires.

Automated resume screening  

One beneficial feature of talent analytics software is something called automated resume screening. 

A job candidate uploads his resume, and the talent analytics software uses a machine-learning algorithm to analyze the words. Once it does this, it assigns a score to the candidate based on insights the system has gleaned.

The program then uses its findings to predict how well the candidate will do in his new job.

Ongoing feedback analytics 

Ongoing feedback analytics focuses on generating data about your workforce in real-time. This means the analysis is finished within a few seconds or minutes after the collection of new data.

You can look at the data generated by ongoing feedback analytics and assess if your company has the skills it needs to retain its competitive edge. It will help you to figure out which team members have the potential to learn new skills, would be better employed in different roles, or have the potential to become a leader.

Ongoing feedback analytics will also tell you which of your workers don't have the necessary skills to do a role justice and, therefore, a drain on the entire organization's productivity.

You can also use the data to determine which teams are the best performers and whether you have the right talent in the right places.

Optimization Analytics 

Optimization analytics helps make your internal processes as robust as possible by combining the data and predictive insights from hiring analytics and ongoing feedback analytics.

Talent analytics can hone your competitive edge

Innovative companies on the leading edge of the talent analytics trend are increasingly fine-tuning ways of analyzing employee data to boost their competitive advantage.

These companies are harnessing the power of analytics to ensure the highest levels of productivity, increased engagement, and retention of top-tier talent.

Data-driven analytics can predict the difference a new executive coaching program can make in your workforce. It can also be used to meticulously analyze hourly labor patterns so you identify where there's costly payroll leakage.

This can save your start-up millions of dollars through vastly improved practices in workforce management.  

Success depends on management buy-in

The success of almost any initiative is wholly dependent on its leaders.

Talent analytics is no exception. Top-tier leaders who exhibit a public passion for this approach is the single most important factor in whether it’ll succeed in your organization.  

Managers who fervently believe that workforce insights based on hard data should be used to solve perplexing business problems must continuously advocate for decisions based on facts rather than on gut instincts.

Analytics must be put into practice and not remain a mere academic exercise.

If you want to take talent analytics out of the theoretical realm, hire an industrial-organizational psychologist. They’re particularly good at helping to create buy-in for analytics initiatives and ongoing programs.

Choose someone who has great skills in persuasion and is trained in using the talent analytics method to convince others to get on board.

Suppose hiring managers become emotionally attached to candidates with low probabilities of success. In that case, the expert can use randomized testing to prove that analytics is the superior method.

Examples of talent analytics

Here are a few examples of talent analytics in the real world:

Harrah’s Entertainment

Harrah’s Entertainment of Las Vegas and Atlantic City has long used analytics to choose the most profitable customers.

Because this use of data analysis turned out to be resoundingly successful, they decided to use it with their employees. They were able to calculate, with uncanny accuracy, the ideal number of workers needed at each of their service points.

They used analytics to create better working conditions, knowing that employees who are happy with their jobs will be more motivated to provide impeccable service to their guests.  

The company also used the method to evaluate the effects its health and wellness programs had on employee engagement. As a result of their talent analytics initiative, preventative care visits to its on-site clinics have increased, and employee satisfaction has skyrocketed.  

It also lowered urgent care costs by millions of dollars in a single year.   

Best Buy

Best Buy used talent analytics to figure out the effect of a 0.1% increase in employee engagement at a single store.

The result?

A whopping $100,000 increase in the store's annual operating income!

Google and AT&T

Many companies favor job candidates with outstanding academic records. 

However, Google and AT&T have established through exhaustive quantitative analysis that an ability to take initiative is a much better indicator of high performance on the job. 


Experian was experiencing a bit of a problem in retaining employees.

In fact, the attrition rate was about 4% higher than they would have liked.

Using talent analytics to construct a predictive model that included 200 attributes, they were able to predict who would leave and who would stay.

One of the biggest risk factors was if an employee was in a team composed of more than 10 to 12 individuals. Another one was if someone moved further away from the office.

The model was implemented in several different areas at the same time. The insights the model produced were used to reduce the attrition rate to 3%, which saved the company $10,000,000.


Clarks, a shoe retailer, wanted to know if there was a relationship between engagement and financial performance.

The company worked with statisticians who conducted an analysis with 450 data points. The study established a positive correlation between the two variables, which was that every 1% improvement in engagement led to a gain of 0.4% in financial performance.

The company also used analytics to evaluate the characteristics of its 100 top-performing stores. Interestingly, they find that there was an ideal team size and that the length of a store manager’s stay at a store was a reliable predictor of performance.

The higher the turnover rate in a store, the more performance levels dropped.

Using these insights, the crew put together a plan to create high performers in their retail establishments. They also devise something they called an “engagement toolkit” team leaders could use to boost performance.

How talent analytics can help your start-up

The best start-ups see their people not merely as individuals but as a rich source of data that leaders can use to improve their talent decision-making process. 

Say you want your employers to be top-tier performers. In that case, you need to replace relying on your gut instincts with making decisions using objective data generated by state-of-the-art talent analytics tools.

At Hunt Club, we use analytics to curate high-caliber talent you won’t be able to find in all the usual hiring channels. We can even handle every step of the recruitment process for you.

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