Moneyball for HR. Greg Trok, VP Consulting Services Susan Gartner, Sr. Manager, Product Management
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1 Moneyball for HR Greg Trok, VP Consulting Services Susan Gartner, Sr. Manager, Product Management
2 Presenters GREG TROK VP Consulting Services SUSAN GARTNER Sr. Manager Product Management, Talent Acquisition Father of 3 Assistant soccer coach (learning) Six Sigma Master Black Belt 20+ years in Public Accounting & HR Consulting Worked with more than 500+ clients Mother Foodie Six Sigma Black Belt 13+ Years of Product Management, including Business Intelligence
3 Ceridian is a global human capital management technology company serving over 25 million users in more than 50 countries
4 Agenda Why analytics is vital to organizational success How to utilize HR data to support corporate business strategies What to measure and how often How to make an actionable plan Making sense of People Analytics 4
5 THE CASE FOR ANALYTICS
6 Words Of Wisdom Analytics Rules to Live By: 1. If you don t measure it, you can t manage it 2. If you can t take action on it, why measure it? 3. People will behave according to the metrics and targets, so choose wisely! 6
7 Employee Engagement Impacts Company Market Value Boosting employee satisfaction raises the market value of a company by (0.141/1.790) = 7.9% 7 Source: Andrew Chamberlain, Chief Economist - Glassdoor
8 Workforce Concerns From a pool of 214 businesses, 54% indicated that improving their workforce analytics capabilities was a top priority. Source: Brandon Hall Workforce Management Study,
9 LINKING STRATEGY TO ADVANCED ANALYTICS
10 SURVEY QUESTION #1 Which best describes your organization with respect to linking strategy with HR Analytics? A. New idea; not us B. We tried this once, but it didn t work C. We link them in talk, but the work and resources don t align D. Our management knows the direct link between the two and we put our resources behind it E. My people know exactly how they are linked / measured and they know the direct impact of their job to those strategies and outcomes
11 11 The Challenge
12 Three Two One Build a Strategy Linkage BEGIN WITH YOUR COMPANY MISSION AND CORE VALUES Do your employees know them? Does it align with your department? Is the connection deeper than just a work connection? GET ALIGNMENT WITH KEY LEADERS Understand their goals Know how they keep score Get their buy in to let you help PRIORITIZATION, PRIORITIZATION, PRIORITIZATION Settle on a tool to prioritize Quantify and measure value 12
13 HR Analytics: Three Step Process To provide real value, identify the issues related to your human capital that impact your company s ability to execute on its strategic initiatives. Step #1 Step #2 Step #3 Identify and gather the data to gain visibility to the issue Analyze and correlate data to gain insights Incorporate the findings into a plan of action Execute on the plan and monitor ongoing
14 Step #1 Identify And Gather Data What are some common analytics? Retention Human Capital ROI Employee Referral Rates Turnover Rate Health Care Costs/Employee HR to Staff Ratio Turnover Costs Time-To-Fill (External)¹ Cost Per Hire ¹ The number of calendar days from the date of a requisition to the employee s start date per new external employee Turnover rate and cost don t tell the whole story. Let s go deeper.
15 Step #2 - Analyze The Data How strong is the correlation between engagement and turnover? An increase of 1 on the engagement score will decrease turnover by x%
16 Step #2 Analyze The Data There is a negative.43 correlation between a company s level of employee engagement and their voluntary turnover rate.* For every increase of 1 in the engagement score, you can expect turnover to go down by Should you make a decision based on this? *Source: Linking People Measures to Strategy. The Conference Board Data provides you an answer. You determine the application of that answer.
17 Step #3 Plan Of Action How strong is the correlation between engagement and turnover? Your plan of action must be influenced by the prioritization and analysis you have done! Did you factor in cost/benefit analysis? Have you aligned analytics to the business objectives? Are your tie breakers determined by something logical vs. arbitrary?
18 ANALYTICS BEING USED TODAY
19 SURVEY QUESTION #2 If you had just one finance type of metric to measure the health of your workforce, which of these metrics would you choose? 1. Profit margin per FTE 2. Revenue per FTE 3. Human capital ROI, defined as (EBITDA financial capital costs) / human capital costs) 4. Labor costs as a % of revenue 5. Other
20 Results Of The 2015 Ceridian / FEI Institute Survey Tie: Revenue per FTE, Labor Costs as % of Revenue (26%)
21 Example Analytics Profit Margin per FTE Managerial Bench Strength EE Engagement Benefit Costs per FTE HR to FTE rations Quality of Hire v. Cost of Hire Turnover Rates (High Potentials < 6 mos) Training hrs. per FTE Absenteeism Productivity Metrics (various) Labor Cost as a % of Revenue Worker s Compensation (incidents/cost) Quality of Hire Human Capital ROI
22 Don t Forget The Reason To provide real value, identify the issues related to your human capital that impact your company s ability to execute on its strategic initiatives. Step #1 Step #2 Step #3 Identify and gather the data to gain visibility to the issue Analyze and correlate data to gain insights Incorporate the findings into a plan of action Execute on the plan and monitor ongoing
23 If your analysis findings aren t capturing your audience s attention, you either have the wrong numbers or the wrong audience. Brent Dykes, Author
24 Takeaways To Consider HR EXECUTIVES CALL TO ACTION Analytics is expected and must be seen as generating positive ROI Start small and drill down later Alignment and partnership (work with Bus. Ops) ACTION STEPS Work with Operations to define 3-5 key metrics Get buy-in from senior executives
25 PEOPLE ANALYTICS
26 What We re Going To Discuss Today People Analytics. What is it? Why is it important to your company? What can you do? Where do you start?
27 WHAT IS IT?
28 People Analytics Defined People Analytics is the use of people-related data to improve and inform all types of management, business, and HR decisions throughout the company. Source: Deloitte, Global Human Capital Trends 2016
29 People Analytics Defined People Analytics improve an organization s ability to figure out what makes people: Join an organization Perform well in an organization Stay with an organization Along with, which qualities and skills make individuals Successful The best leaders Do what is necessary to deliver the highest-quality service and innovation
30 WHY IS IT IMPORTANT?
31 Real-World Business Problems Companies with engaged employees outperform those without by up to 202% - Gallup Out of 100 Million people in America who hold full time jobs, 70% are not engaged in their work - Gallup Average cost to replace an employee is roughly 20% of their annual salary - Business News Daily $2,541: The amount annually that each actively disengaged employee is costing your organization - Gallup $11 Billion is lost annually due to employee turnover - Bureau of National Affairs 1 in 4 employees intend to jump ship within a year - Telework Research Network
32 Value Across All Industries High Tech Financial Services Product Companies Health Care Manufacturing Know why top engineers quit How to build compensation Work environments to get people to stay Analyze why certain people commit fraud What environmental or hiring issues might contribute to such violations Analyze demographic, educational, and experiential factors that correlate with high performing sales people Why top sales people quit Look at why certain hospitals or departments have higher infection rates What people issues are behind these problems Look at the patterns of traffic and communications to understand how high performing managers behave What work styles result in the highest levels of performance
33 Analytic Trends Companies that are correlating business impact to HR programs, up from 38 percent in 2015 Companies using workforce data to predict business performance, up from 29 percent in 2015 Companies doing well leveraging external data to predict trends and top talent 51% 44% 29% Source: Deloitte, Global Human Capital Trends 2016
34 WHERE TO BEGIN?
35 What Are Companies Doing? Sales performance and recruiting. Identify strong indicators of future performance. Productivity. Identify behaviors that make some people more productive than others. Retention. Leverage social networks to predict flight risks among high potential employees. Compliance and risk. Identify and predict activities that will likely result in unethical behavior Culture. Measure the strength and adoption of cultural values using internal and external data. Source: Deloitte, Global Human Capital Trends 2016
36 How Are They Doing It? FOCUS ON SECURITY, PRIVACY, ANONYMITY Create checks and balances; Learn to verify the gut feel Define security policies Establish people analytics governance processes STAY FOCUSED ON BUSINESS PRIORITIES Lean on your CFO; Draw inspiration from their vision Increase financial acumen in HR Spend time where the company makes money EXPLORE NEW TECHNOLOGIES Invest in cleaning data Join an external, industry-specific people analytics working group BUILD A PEOPLE ANALYTICS TEAM Increase reporting; Begin by increasing communication Learn the metrics inside and out Leverage analytics skills outside HR Include consultative resources Sources: Deloitte, Global Human Capital Trends 2016
37 CERIDIAN S APPROACH
38 TalentView For The Manager Holistic view of a manager s team Valuable insights that help a manager make strategic decisions about his/her people Ability to take action on any people related matters, all from one screen
39 LET S TALK
40 Ceridian HCM, Inc. All Rights Reserved.
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