Nearly half of UK organisations rely on gut feel to assess skills needs within the business.

New research from Capita Resourcing has shown 50 per cent of recruitment leaders believe that at least half of all skills gaps within their organisation could be addressed by better use of data. The same survey suggests that almost half (46 per cent) of organisations in the UK still rely on ‘instinct and gut feel’, rather than hard data and insight, when it comes to assessing current skills within the organisation and identifying skills requirements. This is despite the fact that the vast majority (83 per cent) of HR and recruitment leaders regard data and insight as critical to improving recruitment and talent acquisition, and 81 per cent admit that they need more visibility into current skills within the workforce.

The research is based on interviews with 350 HR and recruitment specialists, 500 business leaders and more than 2,000 employees and it reveals the vast potential for data and insight to transform recruitment and deliver the skills businesses need now and in the future. Remarkably, 50 per cent of HR and recruitment leaders believe that at least half of all skills gaps within their organisation could be addressed by better use of data, and 45 per cent believe that data and insight will enable them to predict future skills gaps before they become problematic.

However, HR and recruitment departments continue to struggle to use data effectively. Senior business leaders point to HR and recruitment as the business function which has made least progress in using data and insight to optimise and measure performance – 24 per cent of business leaders report that it is the worst at collecting, analysing and using data. Employees also recognise the need for improvements – 92 per cent of UK workers claim that their employer could make better use of data to enhance their employee experience.

The research reveals that there is mounting pressure to improve. More than a third (34 per cent) of recruitment and HR leaders report that successful use of data in other parts of the business is shining the spotlight on current usage of data within talent acquisition, and more than half (51 per cent) are concerned about falling behind their competitors when it comes to using data and insight in recruitment.

As a result of the lack of progress in data usage, only 22 per cent of HR and recruitment leaders are extremely confident their organisation has access to all of the skills it needs to meet business objectives over the next five years.

Organisations must overcome a number of challenges in order to improve their use of data and insight within talent acquisition. Concerns around data security and protection were cited as the biggest barrier, with 41 per cent of HR and recruitment professionals reporting that data protection concerns are making it difficult to effectively turn data into insight.

The research also highlights growing levels of ‘analysis paralysis’, where organisations simply cannot manage the amount of HR and workforce data they are generating – 40 per cent claim that the sheer volume of HR and workforce data has become a challenge. Other barriers to turning data into valuable insight and information include budgetary constraints (32 per cent), fragmented and disparate data (31 per cent), outdated technology (26 per cent), and a lack of analytical skills within the organisation (25 per cent).

HR and recruitment leaders are fully aware of the consequences of not improving their use of data and insight – 42 per cent say their organisation will have more difficulty recruiting talent; 38 per cent say candidate experience will suffer; and 37 per cent believe that they will lose candidates to competitors unless they optimise their use of data and insight.

“HR and recruitment professionals are acutely aware of the need to optimise their use of data to remain competitive in an ever more challenging labour market and to accelerate their journey towards a hybrid workforce over the coming years,” said Geoff Smith, executive director of Capita Resourcing. “Organisations need complete visibility of skills across the workforce to make more informed, strategic decisions, not only when it comes to hiring, but also utilisation and mobility of current talent and skills. With greater insight on employees and candidates, HR can improve quality of hire, but also drive employee engagement and retention (through better cultural fit of hires), workforce diversity and business agility.”

Smith concluded: “Effective use of data and insight, when combined with innovative digitisation, can completely transform talent acquisition and enable employers to build larger, more agile talent pools, develop deeper relationships with employees and candidates and, ultimately, drive real competitive advantage in the employment market. HR and recruitment leaders need to adopt a highly targeted approach to data, identifying the areas where they need greater insight into the workforce and developing a data strategy which informs, supports and measures overall workforce objectives. This means ensuring they equip themselves with the necessary skills and expertise, both internal and external, and the technology and tools to maximise the game-changing benefits of their data and insight.”

The full research findings can be found in the white paper, The Insight Edge in Talent Acquisition: How data and insight can deliver the skills needed in a hybrid workforce, which is available for download here.