10 Key Workforce Questions Analytics Can Answer

Joanne Bintliff-Ritchie, Principal, JBR and Associates

September 18, 2015

HR Analytics

Purpose is to determine those aspects of HR management that must be prioritized and improved to allow HR to perform better and add greater value to the organization.

Workforce Analytics

Purpose is to determine those aspects of people management that must be prioritized and improved to make the Organization perform better and add greater value to stakeholders.

2

Purpose of Analytics

Economic valueMarket reputation or brand, market share, customer relations, government relationships, employer reputation, and community relations

Financial valueFree cash flow, stockholder equity, and other monetary resources recorded on your income statement and balance sheet

3

Purpose of Analytics

Analytics enables you to:

Drive StrategySupport Business StrategyInform Human Capital strategy and HR priorities, investments, planning

Develop the right Talent Management programsInform designIdentify and monitor outcome metrics

Evaluate the effectiveness of these programsQuantify impacts on people and business outcomes

Solve business problemsLeverage data miningSupport problem solving, decision making and action

Need to ask the data the right questions4

Purpose of Analytics

Internal Context

• Business strategy, plans, objectives, goals, metrics

• Business model• Mergers /acquisitions /

divestitures / alliances

• Leadership• Organization model and culture• Workforce composition• Risks and opportunities• Consumers

ExternalContext

• Regulation• Employment market• Economic issues• Political environment

• Competitor market• Product market• Supplier market• Customers

Context is KEYWithout Context metrics and analytics are just numbers

The Questions1. Is our Human Capital Strategy aligned with the

Business/Organization Strategy2. Is Turnover helping or hindering our ability to be successful ($$ and

non-$$)3. Are we retaining key people4. Is employee health helping or hindering our ability to be successful5. Are our HR Programs effective and having desired impacts on our

key performance outcomes6. Are our strategic Workforce Investments yielding returns7. How are people and/or organization related problems contributing

to a business problem8. Do we have the right workforce mix9. Does engagement matter10. What human capital related metrics are leading indicators of

organization success

1. Alignment with Strategy

What are the Human Capital Requirements embedded in the organization’s strategy

What are the HR Drivers that can enable the Requirements to be realized

What priorities, plans, investments, resources are needed for the Drivers

What analytics will help us to evaluate our performance on those Drivers

Verify that positive outcomes have desired impacts on strategy execution

1.8

Strategy,Objectives

& Goals

Requirements& Drivers

Analytics Targets

1. Ground crew performance results align with company goals

– Ground crew engagement with the strategy and objectives

2. Ground crew is able to achieve company goals

– Ground crew has skills and knowledge necessary to achieve related goals

• % Ground crew shareholders

• % Ground crew certified

- Year 1: 70%- Year 2: 90%- Year 3: 100%

- Year 1: 70%- Year 2: 90%- Year 3: 100%

Revolutionize the airline business model

1. Lowest prices2. Best customer

experience

• Lower costs• Fast ground turnaround• High OTA rating• High OTD rating• High customer

satisfaction

ExerciseAlignment with Strategy

2. Turnover Helping or hindering success

Helping Low performers Blockers Positive cost benefit on non-key personnel

Hindering High performers High cost/time backfills Strategically important positions Recent hires

Turnover Profile who is most likely to leave

Why

Where is it worthwhile to intervene (positive cost benefit) Cost of Turnover vs Cost of Retention

Use correlations to show impact Financial, customer, quality impacts

3. Retention of Key People Target populations

UR hires High Potentials and Successors New facilities, sites, etc. Strategic teams Developed leaders Key customer links

If not, why not?

What is driving retention?

4. Employee Health Helping

Target or better productivity Low absenteeism Better than expected costs for insurance and high

expense conditions

Hindering Costs rising faster than comparators High absenteeism Low productivity

Employee Health Absenteeism

Need to look at type, number, duration

Do you have sub-group variances

Cost National, Regional/State

Competitors

Productivity Key positions

Most impacted

Be judicious

5. HR Programs

Effectiveness Accomplishment of immediate non-operational (e.g., time,

participation) objectives and goals

Impact Mitigates the risk Affects non-human capital outcomes

Threats to strategy execution, market value, financial results, and stakeholder confidence related to unplanned executive turnover.

1.15

Business Risk

Objective:Address critical enterprise risks related to unplanned executive turnover by creating a pipeline of ready internal candidates for executive positions

Goals1. Reduce adverse impacts to

business related to executive turnover

2. Reduce recruiting time for key executive positions

3. Reduce external recruiting costs for executive position

4. Retain successors and high potentials

Succession management and high potential development program that creates:• Depth and

Strength of bench

• Fit of bench to needs

• Fit of development programs to needed competencies

• Succession depth and strength

• % of Positions filled with Successors

• Successor and Hi-Po Retention

• Time to start and Cost per hire for executive positions

• Financial indicators• Indicators of

customer and investor confidence

• Employment Liability Insurance risk rate

Objectives& Goals

Solution Metrics

ExerciseHR Programs

International professional services firm

6. Strategic Workforce Investments

Training Cost/

Employee

TurnoverRevenue/ Employee

Customer Satisfaction

TotalRecruiting

CostProfitability

Cost ofSales

EFFECTIVENESS IMPACT

International fast food company

7. Business Problem

Revenue

EmployeeTurnover

CustomerSatisfaction

Manager Turnover

EmployeeTurnover

Profitability

CustomerReturns

8. Workforce Mix Should be an element of Strategy

Do we have our Target mix

Employees Part time, full time, on call, exempt, non-exempt

Is this mix helping or hindering productivity

Non-employees Contractors, consultants, temps, intermittents

What is the intent and reality of your use of non-employee resources

Is their use effective and having desired impacts

9. Engagement

Does it matter Is it having impact on key performance outcomes?

Is your process affecting impact How are you measuring How often are you measuring Who is participating

10. Leading Indicators

Modeling and data mining can help

Start with strong hypotheses

Include non-HR metrics in the modeling

THIS IS HARD

Apply appropriate analytic approach/es

> Dimensional> Be sure you are collecting and capturing needed data elements

> Modeling> Align with business options or scenarios

> Comparators > internal and external benchmarks, targets, control groups

> Correlations> Tie to key human capital and business performance metrics

> Horizontal> vs Vertical

> Data mining> Be specific; no fishing expeditions

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Analytics Approach

 Analytics ApproachDimensional

Time: monthly, quarterly, annually Hierarchy: organization, job, salary grade Location: office, building, region, country Position types: executive, manager, individual

contributor Demographics: gender, race, ethnicity, length of

service, education Descriptors: performance rating, potential category,

successor

4.22

Modeling Options

What are the possible solutions? Tradeoffs

Costs, time, productivity, etc. Business impacts

What are the benefits and risks of each option?

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Analytics Approach

 Data Elements

What data do you need? Metrics

The formula is key Dimensions, Comparators, Correlators HR vs. non-HR

What data is unavailable or non-accessible? Weigh the pluses and minuses of collecting and

capturing Address other issues impacting accessibility

4.24

 Data Elements Where is the available data you need?

What is the source of record? ERP/HRMS Functional applications Databases Excel

What extraction and organizing tools can you access?

4.25

Cost per hire> Formula: Sum of expenses paid to attract, recruit, select,

and hire external new hires divided by Sum of external hires

> Data elements for formulao Fields: Requisition expense, Non-requisition expense, Type of hire:

external only (ATS)

> Data elements for dimensionso Fields: Recruiter name, Hiring manager, Requisition number, Date

filled, Date open, Source (ATS)o Fields: Ethnicity of new hire, Gender of new hire (HRIS)o Tables: Position hierarchy, Organization hierarchy (HRIS) 4.26

 Data Elements

Lastly

Your list may vary permanently or temporarily depending on type and size of organization, your competitive market place, your sphere of operation, etc. Remember Context!

It’s just as important to identify what you DO NOT need to measure and/or analyze. If Reporting is sufficient then stop there.

The End

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