Corporate mind games

More and more companies are mining data about their employees to predict how they’ll behave in the future

Photograph by Liz Sullivan

A few weeks ago it was revealed that Google and the CIA—two organizations whose job it is to know what’s going on in the present—are working together to learn what will happen in the future. Through their respective investment arms—Google Ventures and In-Q-Tel—the geeks and the spooks each took a stake in a little-known Cambridge, Mass., company called Recorded Future, which bills itself as “the world’s first temporal analytics engine.” By scanning websites, news stories, blogs and Twitter pages for links between individuals, groups and incidents in the past, the company says it can apply “temporal reasoning” to predict events that haven’t happened yet.

The company is at the forefront of a fast-growing field known as predictive analytics, which uses algorithms that detect patterns and connections in life that wouldn’t otherwise be found.

The concept of businesses harvesting the past to try to predict the future isn’t new. But what has changed is the tsunami of information that gets churned out every day, serving as the fuel for these mathematical soothsayers. And while examples of police and spies using such techniques grab most of the attention, a growing number of companies are applying predictive analytics to the workplace to figure out which employees are at risk of leaving, who will work the hardest, and who is worth hiring in the first place.

It’s easy to understand what drew the CIA to Recorded Future. The company has already had some success forecasting troubling events. This past March, Israel warned that Hezbollah had obtained long-range Scud-like missiles, something Recorded Future had found evidence for a month earlier. It’s not the only one delving into the field of predictive analytics. Police in Memphis, Tenn., are using IBM technology to prevent crime before it occurs by predicting when and where it will happen.

In the past, companies used the technology when doing market research and to gauge the credit-worthiness of individuals. But large firms are beginning to use historical data as a crystal ball within their human resources departments, says Atanu Basu, CEO of Data­Info­Com, a research-focused predictive analysis firm in Austin, Texas. “Every large company already has access to this tremendous amount of data on their employees,” he says. “That can be used to make predictions about who will be successful and who is going to leave.”

Last year Google said it had developed a predictive tool capable of warning managers which employees will quit. An executive boasted that Google’s algorithm was so powerful, it lets the company “get inside people’s heads even before they know they might leave.” The U.S. Army already uses the information it gathers from recruits to predict which job would suit them best. And according to a recent report in HR Magazine, some companies are crunching the numbers to even predict when employees will call in sick.

The fact is, workers today shed personal information like skin cells that employers can collect.

The Web pages we surf at work, the emails we send, the answers we give during annual reviews, even the patterns of our vacations are all potential indicators of our actions, say experts. And as we expose more of our personal lives to the world through Facebook and Twitter, that task is only made easier.

Of course, there are risks any time a company thinks it’s got the future figured out, says Tom Davenport, a professor at Babson College and an expert in the field of analytics. Consider the damage wrought by the credit crisis in 2008. Wall Street suddenly discovered that its predictive models about the future of the economy—which assumed house prices could never go down—were completely wrong. It can be the same with individual workers. “The best predictor of how you will behave in the future is how you behaved in the past, however human beings sometimes change,” he says. “The person who resigns may not be the person you predicted would resign at all.”

But as companies fill their vaults with information about their employees, don’t be surprised if one day your boss looks at you funny. He may know you’re about to look for a different job, even if you don’t.

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