Companies are failing to appreciate the advantages which can be realised through predictive software, it has been claimed.

In research which may support the need for IT outsourcing, MidlandHR found that 40.5 per cent of businesses were aware that the innovation can improve employee engagement.

The research also showed that just 26 per cent of organisations know that predictive software can help in their employee management and retention, 17 per cent see it as a way to handle absence and 17 per cent use it to identify potential risks.

Leslie Bowie, research director from MidlandHR, said: “These results are extremely surprising considering predictive software is currently creating a buzz with companies looking to gain competitive advantage in these tough times.”

She also said the study showed a lack of understanding is preventing business from taking advantage of the technology, which may show the importance of IT outsourcing.

Recent research from BT Business and the Design Council revealed that small businesses which actively invested in new technologies suffered less during the recession.