The Dilemma of Predictive Analytics for HR

Black swans are not predictable, human behavior is.
Black swans are not predictable, human behavior is.

My attention was caught by an article entitled Most Swans are White: Living in a Predictive Society by Thomas Davenport. Having just given a class in which I discussed the concept of “black swans” this piqued my curiosity. It turns out the article was actually the forward to the book Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie or Die by Eric Siegel. Apparently things are changing so fast in the predictive analytics world that Siegel has already revised his 2013 book, with the revised copy coming out in January 2016. In the forward Davenport says “However, as Siegel points out—early in the book, which is admirable—these approaches can also be used in somewhat harmful ways.” Let’s explore that further.

Predictive analytics is amoral

Both Siegel and Davenport point out that predictive analytics, like technology advances, is amoral. It is controlled by we humans and sometimes we humans use technology and analytics to do things that are not right. Using predictive analytics to predict human behavior can be used for nefarious purposes or just used without really considering the consequences of our actions. I pointed this out in a post I did for Blogging4Jobs called The Compliance Downside of Big Data. In our rush to be better predictors of who would make a good employee we may be violating Federal law by not following the dictates of the Uniform Guidelines on Employee Selection Procedures.
By not paying attention to the Uniform Guidelines we may be engaging in adverse impact discrimination, but we excuse it, or we are unaware of it, because the predictive model says we should be selecting a particular type of employee. Since we can use predictive analytics for any number of selection processes beyond hiring, we can further engage in discriminatory violations if we are not careful.

Black Swan v. White Swan

The concept of a black swan comes from the book of Nassim Nicholas Taleb who says that many events can’t be predicted because they just can’t be foreseen. Davenport however, says “..the fact is that most human behavior is quite regular and predictable.” He labels these behaviors as white swans. Davenport says that Siegel shows that “we live in a predictive society.” It is important for us to know and use predictive analytics.
Many of us in HR are what are called “non-quants”, that is nonquantitative types. Davenport says “Such non-quants should definitely read this book, because there is little doubt that their behavior will be analyzed and predicted throughout their lives. It’s also quite likely that most non-quants will increasingly have to consider, evaluate, and act on predictive models at work.”
I am re-reading the copy of the first book that I have and I have pre-ordered the new book. If you would like to get either I have given you the links below. The thing to remember is that the challenge of predictive analytics is to not get so caught up in the data that you forget the compliance aspects of obeying HR law.

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