Big Data and Employment Decision-Making: How Analytics Can Add Value

Posted: 2/20/2018


Big Data and Employment Decision-Making: How Analytics Can Add Value

Analytics solutions can improve HR decision-making in hiring, performance evaluations, advancement, and policy implementation.

By Sharon Goldman | UPDATED Feb 16, 2018

Labor and employment law is generally geared toward helping organizations manage their most important asset: their people. And as the use of data analytics continues to grow, more and more law firms are using Big Data to help employers manage more efficiently and accurately, thereby helping with critical labor and employment decisions and reducing the risk of costly legal disputes.

“Data-driven analysis that sheds light into what employees are doing, how they work and how an organization’s policies or practices impact them can be incredibly valuable,” says Aaron D. Crews, chief data analytics officer at San Francisco-based Littler Mendelson, the largest U.S.-based law firm devoted exclusively to representing management in employment, employee benefits, executive compensation and labor law matters. Crews is also an employment lawyer by training and was global head of e-discovery at Walmart.

Analytics solutions and machine learning algorithms can improve HR decision-making in hiring, performance evaluations, advancement, terminations and policy implementation. For instance, analytics can warn of disgruntled employees who might soon depart the company, determine under- or over-utilized staff or predict which applicants will be good at the specific jobs.

Similarly, an analysis of certain data types can show the effectiveness of an organization’s diversity to date, how the organization’s policies and practices affect pay equity and other issues, or how effective an organization’s compliance program is in operation. Analytics can also provide powerful litigation insights that help an organization understand potential liability and offer factual context for claims, communications, and important actions or events. Firms can also use tools that analyze federal employment cases, including case timing, resolutions, damages, remedies and findings.

Of course, the insights derived from analytics in any space are only as good as the data being analyzed; incomplete data, or data which carries a significant bias, often results in bad or incomplete analysis. The 2017 Littler Annual Employer Survey found that 43 percent of respondents said one of their companies’ major concerns in analyzing data to improve workforce management decisions is insufficient resources to collect, manage and analyze data.

In addition, respondents expressed concern with the legal risks of violating discrimination laws (31 percent) and those related to employee privacy (23 percent). However, as the use of Big Data continues to grow, employers are becoming increasingly comfortable with using these tools — in ways that comply with the relevant laws that govern workplace data analytics — to avoid the risk of costly litigation.

Labor and employment law is similar to other segments of the economy, in the sense that analytics will only grow in importance, says Crews.

“Lawyers are the quintessential knowledge workers, and they do their best work when they have all of the data/information available,” he explains. “Analytics allow us to rapidly sift and synthesize large amounts of information so that it can be quickly and easily understood by lawyers and those who create or carry out policy.”

When done well, he adds, “data-driven analytics can provide the kinds of insights that allow for better policies, happier and more productive workforces, and a huge competitive advantage.”