The Challenge for HR Professionals:
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1 The Challenge for HR Professionals: Using workforce analytics to support business strategy and fact-based decision-making 2015 National EMSI Conference September 23, 2015
2 Welcome Lindsay Scott Principal, Career Practice Pay and Performance Workforce Rewards Buck Consultants at Xerox 2
3 Today s discussion The Situation: What s going on in the market The Challenge: Issues our clients are facing The Solution: Integrating internal and external analysis Workforce Intelligence: Analytics for strategic decision-making 3
4 The Situation: What s going on in this market
5 The need for analytics-driven workforce planning and forecasting is increasing in most organizations 69% of HR professionals expect their organization's workforce to grow in 10 years. 29% expect a growing proportion of contract and temporary employees. 43% indicate that obtaining human capital and optimizing human capital investments will be the biggest financial challenges over the next 10 years. 5
6 Critical gaps in capability and tools mean that less than 20% of organizations are ready to respond Activities that HR professionals identified as highly important, but that their organizations are not adequately prepared to do include: Identifying and filling talent gaps Forecasting future talent needs Leveraging HR metrics Conducting workforce planning Source: Bersin by Deloitte: January 2013 Whitepaper Predictions for
7 Global workforce dynamics are also at play Several key global workforce dynamics are further increasing the pressure on organizations (especially multi-nationals) to make advancements in workforce planning and forecasting: Emerging market growth in China, India, Eastern Europe, and South America Baby Boomers retiring Not enough Business Ready graduates Free Agent Nation 7
8 The next generation of workforce intelligence will include SaaS (Software as a Service) tools to support data analysis Access to workforce analytics expanded beyond HR Prescribed actions based on data analysis Collaborative workforce planning across functions Comprehensive cost modelling of workforce scenarios Strategies to leverage remote and contingent talent 8
9 The Challenge Issues our clients are facing
10 Our clients want to be able to Business Leadership Human Resources Line Managers Analyze historical workforce trends Predict future trends using internal / external data Use analytics to drive strategy and decisions Optimize workforce capability and costs Model workforce choices and implications Know when, how many, and types of people to hire Develop and enable global talent pipelines 10
11 Clients are facing challenges knowing what data to look at and how to access it Wealth of internal workforce data, difficult to access For example: Acceptance rate Time-to-productivity Performance rating Productivity Total rewards cost Successor readiness Retention rate Flight risk by employee, manager, job type, level, division, region historically, today, in the future What data, metrics and analytics should we be looking at? How do we get access to it? Wealth of external market data, difficult to access For example: Talent availability Competitor plans and actions Cost of living Market compensation by job type, level, region historically, today, in the future 11
12 Clients are also facing challenges of having the right skill sets to make findings actionable Do we have the right skill sets to drive actionable workforce data analysis? Knowledge / skills / abilities required to analyze workforce data and develop action plans to address findings: Strategic business knowledge Data analysis within organizational context Financial knowledge and cost impacts Project phasing/roadmapping Change management expertise vs Knowledge / skills / abilities frequent in HR: HR operational knowledge Talent management program delivery Business, performance, and service understanding Knowledge / skills / abilities frequent in IT: Systems and data flow expertise Data analysis for errors/discrepancies Project/implementation management 12
13 The Solution Integrating internal and external analysis
14 External Analysis Internal Analysis Workforce intelligence solution Technology + Information + Consulting HRIS Core Absence management Time & attendance Talent acquisition Performance management Benefit / retirement Identify key metrics for measurement Identify key questions and workforce concerns Labor & economic market data Population & demographics Job postings Recruiting optimization Competition for talent Commercial real estate market Educational institution profiles Weather & climate data Build business case for investment Identify and source data for analysis Recommend Decisions and Actions 14
15 Key driver analysis Turnover 15
16 Workforce Intelligence Analytics for strategic decision-making
17 The situation Objective Optimize the locational delivery of service center support Organization Scope of Analysis National Fortune 1000 services firm with shared service centers in 4 geographically diverse cities 12 shared services positions including customer service, office / admin, and general office management Shared service staff located in multiple facilities within each city Location assessment included a number of dimensions: Workforce Real estate market Local economy Educational market Market demand Transportation Industry competition Weather 17
18 Company profile Headcount and costs How do the 4 service centers workforce compare? Service Center Jobs / Employment: Unique jobs within the 12 SOC s range from Total service center employment 3,600 SC-4 has 41% of employment base 70% + employment base is female Service Center Compensation: Varies both due to market and position mix Prime Working Age Population: Company share of prime working age population (20-44) substantially higher than local market 18
19 Company profile Real estate assessment How do the 4 service centers facilities / infrastructure compare? Service Center Real Estate: 16 Service Center locations in 4 cities with nearly 710,000 square feet of floor space SC-2 has smallest city footprint, SC-4 the largest Company floor space and cost vary significantly by location Differential market vacancy rate may be an issue 15% Vacancy Threshold 19
20 Role profile Customer service rep How does the service center workforce compare for a single role? Service Center Headcount: SC-1 headcount for CSR lowest SC-2 headcount for CSR highest Headcount trend reduced in 3 SC s 20% Target Turnover Service Center Turnover: SC-2 voluntary turnover is much higher than the 20% target SC-3 retention is improving SC-1 turnover is not improving SC-4 is role model for retention 20
21 CSR role Labor cost vs market Company pay is fully competitive when between 90% - 110% of the comparable market median Competitive Market Comparison: Pay is much higher than market for SC-1 and SC-4 SC-2 & SC-3 pay is in EMSI range EMSI vs Survey Market: Customer Service Rep is a SOC role Surveys typically have 3 unique jobs within the CSR SOC role EMSI distribution represents entire market; surveys represent a subset Remember peer competitors 21
22 CSR role Labor market supply vs demand What is the condition for the CSR labor market in the 4 service center markets? Labor Availability: Very large SCO-1 labor supply but growing very slowly SC-3 labor supply large and growing quickly Market Demand vs Supply: Monthly postings & monthly hires are independent measures of labor demand Ratio of labor supply / labor demand measures labor tightness CSR markets are tightest in SC-2 & SC-3 22
23 Local economy General How might general economic conditions influence workforce and siting decisions? Labor Force Employment City -1 City -2 City - 3 City - 4 Annual Growth Indicators of employment Measured relative to percentage growth for 4 city average: City-1 slowest growth historically but improving City-3 all green Unemployment Annual Growth Labor Force Employment Unemployment Key: < 0.2% % > 0.2% Trends in unemployment Full employment economy typically defined as 5% unemployment rate: All 4 cities have large drops in the unemployment rate Historically City-2 & City-4 have lower unemployment impact Three cities are near 5% threshold 23
24 Findings and recommendations Objective optimize the locational delivery of service center support Service Centers Workforce Findings Local Market Findings SC-2 CSR large share of headcount CSR turnover high, trend unchanged CSR pay likely not peer competitive SC-3 CSR large share headcount Turnover near target and improving CSR pay greater than broad market SC-4 Largest headcount & number of jobs Turnover is low and improving CSR pay greater than broad market 24 Competitive real estate cost Very low RE vacancy rate Unemployment less than 5% RE cost very competitive RE vacancy rate greater than 15% Economy indicators green Largest area footprint Low real estate vacancy rate Unemployment less than 5% Recommendations: Investigate closure of SC-2 and consolidation of support to other centers Investigate selling / leasing SC-2 company buildings in hot real estate market Investigate expanding SC-3 for CSR role; assess hiring market impact on timing, and determine cost to expand / consolidate existing real estate Investigate real estate consolidation in SC-4 and selling / leasing excess space Determine drivers of SC-4 retention success
25 What competencies does HR bring to these analysis? Competitive Assessment Understanding the typical composition of jobs and peer market value within a broad SOC role Enhances the market estimate of labor costs based on the mix of jobs within a SOC role Performance Identify SC-2 Top Performers and determine transfer potential Potentially lowers SC-3 hiring costs, maintains key skill levels, enhances supply of mentors for new hires Culture Determine the key drivers for low voluntary CSR turnover in Service Center 4 Use the learnings from the key driver analysis to enhance retention at other service centers 25
26 Questions Lindsay Scott Principal, Career Practice Pay and Performance Buck Consultants at Xerox 26
27 2015 Xerox Corporation and Buck Consultants, LLC. All rights reserved. Xerox and Xerox and Design are trademarks of Xerox Corporation in the United States and/or other countries. Buck Consultants is a trademark of Buck Consultants, LLC in the United States and/or other countries. BR15766
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