23. October 2023 6 minutes reading time

Utilization of Big Data in Personnel Development and Management

Data-Based Work as the Key to Success

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Utilization of Big Data in Personnel Development and Management

The working world is currently undergoing profound changes, with key trends such as digital transformation, New Work, and a shifting value system significantly influencing the business landscape. Central to these changes is personnel management, including the areas of personnel development and management, which is now more challenged than ever. It must reinvent itself as a business area in order to meet the changing requirements. Big data can be a key to achieving widespread success. Rapid developments in technology have paved the way for the use of big data in many industries and business areas. Big data therefore also offers numerous opportunities in HR development and management, but also presents specific challenges. This article aims to provide an overview of both sides of this complex topic.

Possibilities of Big Data in Personnel Development and Management

According to the current study “Trend Barometer: People Management 2030” by PwC, the German Society for Human Resource Management, and the Institute for Leadership and Human Resource Management at the University of St. Gallen, the focus in the HR (Human Resources) field is changing significantly concerning future developments. According to survey participants, digital knowledge (98 percent), empathy (97 percent), and strategic planning (96 percent) are at the forefront of the required skills for future People Management. Experts predict the greatest increase in relevance by 2030 in competencies related to Big Data and People Analytics (+23 percent), willingness to experiment (+15 percent), and digital skills (+10 percent).

In this context, big data enables HR to increase its overall productivity. As early as the recruitment phase and in applicant management, data analysis helps to find suitable candidates quickly. In addition, a company can be further developed by examining existing employee data. This makes it possible to highlight employees’ skills, talents and abilities, anticipate potential dismissals and provide optimal support for entire departments. Big data makes all this potential accessible, as internal company analyses are often preferred and data evaluation opens up possibilities that previously seemed unattainable. This allows weak points to be identified and addressed at an early stage, ensuring that the company structure remains stable throughout.

How companies can benefit concretely:

Targeted Training and Talent Management

With Big Data, companies can better understand the training and development needs of their employees. By analyzing performance data, employee feedback, and external data, specific training programs can be developed. This not only promotes individual development but also enhances the overall performance of the company.

Efficient Recruitment

Big Data enables a detailed analysis of applicant profiles and data to identify the best talents. Algorithms can filter large amounts of applicant data, identifying potential candidates who would be a good fit for the company.

Prediction of Potential Employee Turnover

By analyzing large amounts of data, the likelihood of employees leaving the company can be determined. Early detection of turnover trends can help companies take preventive measures, avoiding high hiring and training costs.

Improved Employee Engagement

Through the analysis of feedback, survey results, and other data sources, companies can develop targeted strategies to increase employee engagement and satisfaction.

Challenges in the Use of Big Data

Before using people analytics methods, it should be ensured that the data analysis is legally permissible. Data protection in particular is of central importance, although other legal aspects, such as the company’s right of co-determination, must also be taken into account. From a data protection perspective, it must always be checked whether there is a legal basis for the use and processing of personal data in the context of people analytics. If there is no other legal basis, the data subject should give their consent to data processing voluntarily.

In a professional environment, it is often doubtful whether this is the case, especially if applicants fear negative consequences or if superiors have expectations or instructions regarding consent. Another aspect of voluntary consent is that it can be withdrawn at any time. In such a case, the data must be removed immediately, which can have significant consequences for the resulting analyses. Furthermore, consent is only valid under data protection law if the purpose of data collection and processing is clearly defined. Data processing that goes beyond this purpose is not permitted. It should therefore be checked exactly how the purpose is defined and whether the planned analyses really correspond to this purpose. Analyses without a defined purpose cannot be implemented, especially if the purpose of the analysis only becomes clear through the result and cannot be defined in advance in the consent.

Further challenges in the context of Big Data analysis in the HR field are:

Data Quality

Not all data collected is of high quality or relevant. Companies need to ensure that they have the right tools and skills to filter and analyze the data effectively.

Lack of Expertise

Not every company has the resources or expertise to use big data effectively. Hiring or training data analysts and scientists can be expensive and time-consuming.

Human Factor

There is a danger that companies rely too heavily on data and neglect the human factor. Decisions, especially in personnel development, should not be based exclusively on data, but should also take human intuition and experience into account.

Conclusion

Big Data undoubtedly offers significant potential for personnel development and management. It enables companies to make targeted, data-driven decisions that can lead to higher satisfaction, better performance, and more efficient processes.

At the same time, the integration of Big Data into the personnel strategy requires careful planning and implementation. Companies must be aware of the associated challenges and ensure that they have the necessary resources and expertise to overcome these challenges.

Overall, it is clear that Big Data will play an increasingly important role in the modern workplace. Companies that prepare for this and effectively utilize Big Data are likely to gain a competitive advantage and be able to continuously optimize their personnel strategies.

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