Talent Analytics: Increasing the ROI of Human Capital

Asset 3

In every business, acquiring the right talent has always been a priority. For many years, getting the right people was treated as an art form or a talent in its own right. Good money has been made recruiting human capital, and professionals from HR pros to independent headhunters have earned reputations for matching the right talent with the right companies.

Fast forward to the 21st Century, though, and you’ve entered the age of Big Data and analytics. The data science world has taken its crack at producing the best ROI of human capital, and the resulting field of study data scientists have created has come to be known as talent analytics. Let’s take a look at what talent analytics is, why it’s important to companies, and how they can use it to improve their operations.

What Is Talent Analytics?

A central tenet of analytics is a belief that most problems can be quantified. This presumes you have access to sufficient data and can identify the right metrics. Notably, a branch of analytics is dedicated to ranking which metrics are most worthwhile.

Data scientists see talent assessment no differently than other fields to be analyzed. If anything, the robust amount of information about hiring, retention rates, firing, and skills that most companies have developed makes it a field that’s ready for exploitation. Organizations can acquire relevant data from many sources, including:

  • Entrance and exit interviews
  • Performance reports
  • Personnel files
  • Education histories
  • Applications

Suppose you want to figure out which team members should be considered for leadership positions and placed on career tracks for management. In the past, a fairly biased process was used, usually recommendations from other managers. With talent analytics, you can review metrics that are tied to top-tier performance in leadership roles to assess which team members have an affinity for management.

Why Is This Important to Companies?

Placing the wrong person in a position can lead to problems that echo throughout a company. If you have a management role that strongly influences your newest hires, for example, that leadership position, if poorly, filled can do years worth of damage by leaving a negative imprint on newly acquired talent. Putting time, money, and work into identifying the right people for key roles doesn’t just influence the success of one person in one position. It can influence how people who work under them pursue their careers, feel about the industry, and choose to chart their career paths.

How Talent Analytics Improves Operations

To optimize your workforce, you need to develop metrics for a host of talent measures. You might establish metrics to assess things like:

  • Leadership skills
  • Company loyalty
  • Interpersonal abilities
  • Communication skills
  • Performance on a per-dollar and -hour basis

Suppose your company is downsizing to deal with adverse macroeconomic conditions. You need to hold onto the right combination of team members who’ll provide you the most value for every dollar you’re going to spend on salary. On a position-by-position basis, you can determine which employees are going to represent the most value with what you can spend. This will ensure your company will operate as effectively as possible while riding out the downturn, leaving you in the best possible cash position during tough times.

Even in good times, this approach can be useful. You might see your firm is having trouble with the retention of skilled workers in a competitive labor market. By scanning through exit interviews and worksheets, you can produce a relevant data set. This data can then be used to identify the factors behind why workers leave and what could be done to retain the best talent at your company.


In nearly every business, putting together the best talent is a winning play. Getting there in an objective manner, though, can be a challenge. A good talent analytics system can go a long way toward helping you hire, retain, and promote the best people.

Back to blog homepage


Scottie Todd

Scottie Todd

Digital Marketing Lead

“Level 4 marketing wizard on a quest for
data insights one blog post at a time.”

Subscribe To Our Blog

Let’s Keep In Touch

Get the latest product and data analytics insights. Straight to your inbox.