The implications are dramatic because talent management in many businesses has traditionally revolved around personal relationships or decision making based on experience - not to mention risk avoidance and legal compliance - rather than deep analysis. Advanced analytics provides a unique opportunity for human-capital and human-resources professionals to position themselves as fact-based strategic partners of the executive board, using state-of-the-art techniques to recruit and retain the great managers and great innovators who so often drive superior value in companies.

Some leading organizations are already using advanced HR analytics successfully in certain talent-management areas. A leading healthcare organization, for example, has used these techniques to generate more than $100m in savings while simultaneously improving the engagement of its workforce. The organization found that highly variable and unequal compensation levels were disturbing employees and driving high rates of attrition. Once the data analytics had identified an optimal minimum and maximum compensation threshold, the healthcare group increased the engagement and productivity of its employees - and reduced not only their rate of attrition but also its total compensation expenditures.

Another company reduced its retention bonuses by $20m - and employee attrition by half - thanks to the use of predictive behavioral analytics. Through this process, and contrary to expectations, the company found that limited investment in management and employee training, and inadequate recognition, were the main drivers of staff defections. Expensive retention bonuses, to which the company had resorted in desperation, were simply an ineffective and costly Band-Aid. Many companies conventionally try to tackle retention issues by conducting in-depth exit interviews. The important advantage of the new analytics techniques over that approach is that they are predictive, rather than reactive, and they provide more objective information than the more qualitative findings of a one-on-one discussion.

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