1 Q4 2013 WORKFORCE PERFORMANCE REPORT Key factors impacting the performance and profitability of customer facing workforces
Table of Contents Evolv is one of the very few companies that produces rigorous and transparent research on the workplace. Their work helps to improve and extend our understanding of the workforce, and allows employers to be more efficient. Professor Matthew L. Spitzer, Director of the Searle Center on Law, Regulation, and Economic Growth, Northwestern University Big Data Analytics: The New Industry Standard for Managing Workforce Performance The True Factors Impacting Workforce Performance Top Influencers of Customer Satisfaction Top Influencers of Workforce Attrition Workplace Relationships Employee Traits Company Practices Unlocking the Benefits of Big Data for the Workforce 02 05 05 07 09 12 14 17
01 Big data investments in 2013 continue to rise, with 64 percent of organizations investing or planning to invest in big data technology compared with 58 percent in 2012. Gartner
02 Big Data Analytics: The New Industry Standard for Managing Workforce Performance Poor workforce performance drags on revenue whereas optimal workforce performance provides a critical competitive edge. Big data analysis of the workforce allows business leaders to factually answer questions. The Shift to Data-Driven Decision-Making In business conferences and boardrooms around the world, leaders are asking: what does the era of big data mean for my company? Data has become a critical business asset, just like labor and capital. The sheer volume of data that is available and the speed with which it can be analyzed is providing companies with new and unexpected insights into their business. Big data is debunking common myths and misconceptions to improve one of the most critical business functions for any company: workforce performance. Poor workforce performance drags on revenue whereas optimal workforce performance provides a critical competitive edge. Now, the selection, training, management, compensation, scheduling, and retention of employees can be optimized using big data analysis. Big data analysis of the workforce allows business leaders to factually answer questions such as: Which job applicants will deliver the best customer experience? How will a wage increase impact employee retention? What types of hires will sell the most product? The hiring and managing of people has long been done by gut and intuition. Now, companies are turning to data to uncover the facts and drive decisions. Yet many companies are encountering challenges in tapping this new source of competitive advantage. Corporations face common barriers that inhibit their ability to unlock the benefits of big data: siloed and incomplete data, lack of fact-based analysis, and difficulty in operationalizing key findings. Big Data Analysis and Action Drive Profits The benefits are clear. Adopting a big data approach to workforce performance leads to measurable improvements, such as higher customer satisfaction, increased sales, more efficient recruiting, and better retention. Driving these outcomes requires analyzing data across the entire employee lifecycle, identifying the key factors impacting workforce performance, and then putting that analysis into action.
03 We have clearly entered an economy in which talent is considered a critical and scarce commodity. When this happens, companies should get smarter about every single talent decision. Enter the world of data-driven people decision-making. Deloitte Case in point The Results Companies, one of the most successful Business Process Outsourcers headquartered in the United States today, adopted a big data approach to workforce performance to meet the needs of its high-visibility Fortune 500 clients. Results saw improvements across every facet of the employee lifecycle: Attrition was reduced 25-35% across key programs, representing 25-35% savings and improvement to overall workforce quality. Improvements to customer handling efficiency and adherence to schedule enabled Results to manage the same number of customer transactions with as much as 20% fewer employees. Business units focused on new business sales generation realized an increase in sales productivity of 8-10% across key programs. Evolv optimizes the performance of workers across brands, including 20 percent of the Fortune 100. In this report, Evolv shares key findings on performance and attrition from its Workforce Big Data network.
04 The HR field is poised for revolutionary change. The availability of firm-level electronic data, which are often recorded in widely-shared formats, mean that it is now possible to statistically model and analyze personnel behavior on a large scale. These data will provide new impetus to the fields of personnel and labor economics, organization behavior, labor law, and others. The resulting insights will flow back to companies through improved HR practices. Dr. Nicola Persico, Professor of Managerial Economics and Decision Sciences, Kellogg School of Management, Northwestern University
05 The True Factors Impacting Workforce Performance Top Influencers of Customer Satisfaction The survey revealed that there are a wide range of business problems being addressed using big data, although there are some clear patterns. In Gartner s 2012 and 2013 studies, business cases that improve process efficiency and business cases around customer experience dominate big data wish lists. Gartner 27% 28% WORKPLACE EMPLOYEE TRAITS As the economy becomes more service-based, customer satisfaction is an increasing determinant of market advantage. What drives customer satisfaction? The short answer is people. Companies know that their people represent their brand. Around the world, employees are interacting with customers over the phone, at the register, and on the retail floor. These employees are responsible for critical customer, revenue, and profitability outcomes on behalf of the brands they represent. 10% 11% 23% JOB CHARACTERISTICS MACROECONOMIC TRENDS COMPANY PRACTICES New big data findings quantify the top factors driving customer satisfaction a critical key performance indicator in a service-driven economy. What really matters? Workplace relationships especially the relationship that employees have with their managers Employee traits personality and fit with the job role, not the information on their resume Company practices such as overtime policies New big data findings quantify the top factors driving customer satisfaction
06 Top Influencers of Customer Satisfaction Retail Telecommunications Financial Services Staffing Some of the most people-intensive industries often have the lowest customer satisfaction or Net Promoter scores. It s no surprise that some of the most peopleintensive industries telecommunications, retail, financial services, and staffing often have the lowest customer satisfaction or Net Promoter scores. Uncovering the true factors that inspire customer loyalty isn t just about knowing how, when, or where customers interact with a brand, it s also about understanding how they experience a brand. That experience is delivered through a large, global, and often hourly workforce. One of the most important insights was that prior work experience, a cornerstone of the company s hiring criteria, was in fact not predictive of performance on the job. Customer outcomes were the same whether an employee was experienced or new to the role. Customer outcomes were the same whether an employee was experienced or new to the role. Insights in Action: A top cable services operator looking to improve its Net Promoter and customer satisfaction scores decided to take a big data approach. Through analysis of data from 3% disparate systems across the employee lifecycle, the company was able to get a full picture of what was really driving the customer experience. Data-driven insights boosted Net Promoter scores by 3% and customer satisfaction by 4%. Given the scale of the company s operations, each percentage point of improvement was valued at millions of dollars. Data-driven insights 4% Net Promoter scores customer satisfaction
07 Top Influencers of Workforce Attrition for Customer Support Roles 69% 11% 10% 7% 5% 4% WORKPLACE EMPLOYEE TRAITS JOB CHARACTERISTICS MACROECONOMIC TRENDS COMPANY PRACTICES 50% Average turnover in U.S. hourly jobs Business has entered an era in which data is abundant and analyzed in real-time. Yet, Evolv research demonstrates that many employers with sizable workforces are still weighing the wrong factors when it comes to workforce decision-making. Getting it right is critical when it comes to the workforce. Hiring and training employees is costly and retaining employees is critical to business profitability. And yet, average turnover in U.S. hourly jobs is 50% and in some industries and job types is regularly as high as 200%. Using workforce analytics software, researchers uncovered some of the top factors that impact attrition. The key drivers fell into five main areas: Workplace Relationships Employee Traits Job Characteristics Macroeconomic trends Company Practices In a prior workforce performance report, Evolv analyzed data for each of these five factors. In this report, Evolv analysis looks at the impact of these factors specifically for customer support roles.
08 Top Influencers of Workforce Attrition for Customer Support Roles In one of the most comprehensive global surveys to date, corporate directors identified talent management as their single greatest strategic challenge. Harvard Business Review Some of the key findings of prior studies have informed the studies in this report, including: Previous experience does not predict future performance or tenure Job hoppers and the unemployed often make great workers Highly organized trainers aren t as good as very communicative trainers Workplace relationships, especially the relationship between employees and their managers, had a greater impact on attrition than all of the other factors combined. Given the outsized impact of managers on employee attrition, this report dives more deeply into the question: What makes a great manager? Great managers positively impact employee tenure more than any other factor, even the employees themselves
09 27% 28% 69% Customer Satisfaction WORKPLACE Attrition EMPLOYEE WORKPLACE TRAITS WORKPLACE 10 11% EMPLOYEE J CHARAC Data shows what makes great managers Leadership Teaching Adaptability Managers influence employee performance and tenure more than any other factor. Employees with the best managers are six times more likely to remain on the job. Employees with good managers also outperform when it comes to customer satisfaction, productivity, and sales. So what makes for a great manager? It s not always intuitive. Managerial traits that positively impact employee retention include an aptitude for leadership and teaching. Adaptability also rules. Managers that live in the moment and readily adapt to changing business conditions retain employees longer than managers that strategize and plan for the future. Insight: Length of Relationship Thought to make great managers Innovation Creativity Multi-tasking Insight: Manager Traits One surprising finding from recent customer analysis is that the higher managers score on the innovation and creativity scale, the worse they do at keeping their employees. Traits like innovation are often prized in executives, but the study suggests it isn t a valuable trait in operational managers, as it leads to employees who remain on the job for shorter periods of time. Managers who multi-task also showed worse retention of supervised employees. Employees build up a relationship with their manager over time that allows them to perform better. For every month spent with a manager, for example, average call handling time--a metric for productivity for contact center agents--falls by half a percent. Over the course of a year, a customer service representative could improve 6 percent in average call handling time if working with the same manager.
10 27% 28% 69% Customer Satisfaction WORKPLACE Attrition EMPLOYEE WORKPLACE TRAITS WORKPLACE 10 11% EMPLOYEE J CHARAC Insight: Manager Education While big data analysis often uncovers counterintuitive results, when it comes to education the analysis reinforces long-held beliefs: education matters. Having a technical degree, bachelors degree, or better allows managers to retain their employees at a higher rate than someone with a high school degree or associates degree. Managers with either a high school education or associates degree perform worse when it comes to retaining employees. Employee Tenure by Supervisory Education Level 100% 90% Probability of Survival Insight: Manager Experience A major finding of a previous workforce report was that an employee s existing job-related experience was not predictive of tenure or performance for hourly workers. This runs counter to the conventional wisdom. One of the first things a hiring manager does when reviewing applicants for a job is look for prior experience. Yet, when hiring hourly employees, experience is considerably less important than aptitude and work style. This finding only holds true, however, for staff positions. It isn t the case for managers. More experienced managers have better customer satisfaction scores and better performance overall. When it comes to managers, previous experience in a leadership position matters. 80% 0 30 60 90 120 150 180 Bachelor of Arts High School or Assoc Master s of Arts Technical Degree
11 27% 28% 69% Customer Satisfaction WORKPLACE Attrition EMPLOYEE WORKPLACE TRAITS WORKPLACE 10 11% EMPLOYEE J CHARAC Insights in Action: 53,000 Boosting the performance 4.6 employees Million How can a company save millions in workforce costs? The average Fortune 500 company has 53,000 employees. A company of this size can save $4.6 million just by boosting the performance of managers in its bottom quartile.
12 27% 28% 69% 10% 10% 11 11% 7% WORKPLACE Customer Satisfaction EMPLOYEE WORKPLACE TRAITS Attrition EMPLOYEE JOB TRAITS CHARACTERISTICS EMPLOYEE TRAITS MACROE JOB CHARACTE TR Big data reveals what traits make for highperformance workers and it s not information you will find on a resume. There are certain employee traits that are important for every job, such as learning quickly, supporting organizational goals, and being dependable. But for certain roles, particular behavioral traits are key to performance. Insight: Unique Employee Traits Online, self-service technical help is becoming more ubiquitous. This actually makes work even more challenging for technical support workers they are getting only the toughest customer calls. Data show that the optimal technical support employees, unsurprisingly, are great at problem-solving and analytical reasoning. However, they must also master the art of maintaining patience despite setbacks. Seasonal workers should be extroverted, inquisitive, and good at multi-tasking. Loyalty and creativity are not important. The data show that reward-driven workers make the best hires.
13 27% 28% 69% 10% 10% 11 11% 7% WORKPLACE Customer Satisfaction EMPLOYEE WORKPLACE TRAITS Attrition EMPLOYEE JOB TRAITS CHARACTERISTICS EMPLOYEE TRAITS MACROE JOB CHARACTE TR Work-from-home employees must master the art of working autonomously and prefer a non-verbal communication style. The data says that an in-person handshake or pat on the back does not motivate them but rewards for task completion do. Fast food and restaurant staff need a high tolerance for working in hot, bustling environments. The most productive workers are rule-followers and naturally abide by strict food handling and safety procedures. Retail workers must have an aptitude for sales, being persuasive and overcoming objections. Employees that succeed best in a retail environment have some unusual abilities, including an aptitude for resolving conflict.
14 27% 28% 69% 10% 10% 11% 23% 11% 7% 5% 4% WORKPLACE EMPLOYEE WORKPLACE TRAITS EMPLOYEE JOB TRAITS CHARACTERISTICS MACROECONOMIC JOB CHARACTERISTICS TRENDS Customer Satisfaction MACROECONOMIC COMPANY TRENDS PRACTICES Attrition COMPANY PRACTICES Company Practices Overtime is key to retention and productivity Company practices affect workforce performance and profitability throughout the employee lifecycle. From the creation of job applicant assessments and recruiting policies to the training and promotion of employees, company practices can help or hinder performance and retention. For this report, researchers examined the impact of overtime policies. Hourly employees stay in their jobs longer when offered the opportunity to work overtime, recent client analysis shows. Employees averaging one to three hours of weekly overtime showed 58 percent better retention. It may be that hourly workers welcome the extra compensation boost of overtime. Employee Tenure by Average Weekly Overtime 58% Employees averaging one to three hours of weekly overtime showed 58 percent better retention. Insight: Optimizing Overtime There is a sweet spot in overtime: in order to keep employees engaged but not burned out, they should work one to three hours of overtime a week. More or less can actually decrease tenure. This might suggest that overtime is most effective if existing shifts are extended and less effective if employees are working extra shifts. 100% 90% 80% 70% 60% 50% 40% Probability of Retention over Time 0 30 60 90 120 150 0-1 hour 1-3 hours 3+ hours
15 27% 28% 69% 10% 10% 11% 23% 11% 7% 5% 4% WORKPLACE EMPLOYEE WORKPLACE TRAITS EMPLOYEE JOB TRAITS CHARACTERISTICS MACROECONOMIC JOB CHARACTERISTICS TRENDS Customer Satisfaction MACROECONOMIC COMPANY TRENDS PRACTICES Attrition COMPANY PRACTICES Company Practices Insights in Action: Small changes lead to big dividends Evolv analysis for a Fortune 500 company with nearly 50,000 workers showed that optimizing overtime policies would result in savings of $10 million dollars annually.
16 Technologies such as big data have transformed business intelligence from the stuff of stodgy analyst reports to an instant stream of information. Financial Times
17 Unlocking the Benefits of Big Data for the Workforce The result is the ability to offer companies predictive insights that inform management decisions and save millions of dollars and ultimately changing the way companies manage their hourly workforce. Recruiting, retaining and maximizing the reliability is extremely high, with the typical analysis productivity of the best possible talent is incorporating millions of employee data points. critical to the profitability of hourly workforce In the Workforce Performance Report, Big Data operations and competitive advantage in the analytics are used to decode the key factors driving market. Until now, business leaders have had workforce performance in organizations. More than limited visibility into the true reasons behind just data, the report leverages proprietary algorithms workforce performance. Not anymore. and the expertise of Evolv s team of workforce science experts to uncover what to do with the data and why it matters. The result is the ability Research Methodology to offer companies predictive insights that inform management decisions and save millions of dollars The Evolv Workforce Big Data network aggregates half by improving employee selection, development and a billion data points on the performance, retention, transition ultimately changing the way companies demographics, and behavioral traits of applicants manage their hourly workforce. and employees at many of the world s most influential global brands. Predictive data is extracted from disparate internal human resources systems, publicly This report is based on: available macroeconomic indices, and via Evolv s own proprietary psychometric instruments. By merging and cleansing these different data streams, Evolv employs Big Data techniques and machine learning algorithms 13 18 500mm to parse and identify workforce insights. The statistical Countries Industries Employee data points
18 About Evolv Evolv is a big data company that helps solve workforce performance issues for the C-suite by using a configurable cloud services platform. Evolv s patent-pending technology platform unifies and supplements existing data from current systems, then uses that dataset to identify factbased workforce insights that drive measurable ROI. By using objective, data-driven methodology, Evolv helps companies uncover the core reasons behind workforce performance, enabling executives to make better operational business decisions that generally result in tens of millions of dollars in measurable value per year. For more, visit: www.evolv.net, follow @EvolvBigData and connect on LinkedIn.