Applying Predictive Analytics to Improve Talent Retention

Thomas Daglis Associate Data Scientist: Ultimate Software

Goals for today

Focus on solving problems through a data driven

approach

Hone your skills as an analytical storyteller

Motivate you to act on your analytics

1 2 3

2

3

Ever purchased a Car?

3

4

Judgment vs. Data Predictions

Gut-level input

Planned Periodically Manually Updated Highly Subjective

Employee records

Always Available Always Up-to-date

Unbiased

Judgment Data

4

5

A simple philosophy to become data-driven

Data Knowledge Action

5

6

Workshop #1 Practice Data Identification

How might you measure employee engagement?

Source: SHRM – “Employee Job Satisfaction and Engagement Report” - 2015

Team Dynamics Meaningful work

7

“If we have data, let’s look at data. If all we have are opinions, then let’s start with mine.” Jim Barksdale, Former CEO, Netscape

7

8

Successful CHROs are assertive and data-driven

80% of executives agree that their company can’t succeed without an assertive, data-driven CHRO, who takes a strong stance on talent issues and uses relevant facts to deliver an informed point of view.

Source: Februrary 2015 Harris poll survey of 301 corporate executives across America

4%

28%

52%

16%

Strongly Agree

Somewhat Agree

Strongly Disagree

Somewhat Disagree

80%

8

Current State of Analytics

11% 20%

24% 26%

27% 38%

44%

HRSupply chainSocial media

CollaborationMobility

User productivityCRM/ERP

What new analytics and big data solutions are you most focused on? ?

Source: Gatepoint Research / IBM – “Strategies for Integrating Analytics” – May 2014

9

10

Employee retention is #1 problem for CHRO’s

Source: SHRM/Globoforce – “2015 Employee Recognition Survey”

4% 10%

10% 19%

18% 18%

31% 35%

26% 39%

47% 33%

4% 7%

9% 9%

11% 12%

14% 22% 22%

24% 29%

35% 39%

40%

OtherRevenue per FTE

*Employee brand*Employee happiness

ProductivityEmployee enablement - providing

Relieving employee frustrationEmployee satisfaction

Performance managementCulture management

RecruitmentSuccession planning

Employee engagementEmpoyee retention/turnover

20152013

Top organizational challenges cited by HR professionals

10

11

Replacing Employees Is Expensive

Entry Level Employees

Mid-Level Employees

High-Level or Highly Specialized Employees

Source: TLNT – “What Was Management Thinking? The High Cost of Employee Turnover”, 2015

30-50% Annual Salary

1.5x Annual Salary

4x Annual Salary

11

12

Predictive and Prescriptive Talent Analytics

Predictive vs Prescriptive

Suggesting the best action to take to influence a different outcome

Predictive Analytics

Prescriptive Actions

The power to use what happened yesterday to accurately predict what

will happen tomorrow

“An analytic without action is useless”

– Steve VanWieren

13

16 million data points of

workforce data

only 4% successfully

executed data-driven HCM programs

14 14

Com

pens

atio

n Hi

stor

y

Identify Retention

Risks

15

There are drivers in your HR data

15

Each Employee Gets a Score

99.9 99.2 98.7

18.4

59.7

64.5

80.3

25.7 36.7

48.1

60.4

42.5

72.8

87.0

96.9 94.7 90.3

10.3

HPI

HPI

HPI

HPI

HIGH RISK LOW RISK

MEDIUM RISK

16

17

Retention Predictor™ Results HIGH RISK

10% MED RISK 40%

LOW RISK 50%

0%

10%

20%

30%

40%

50%

60%

10.3 - 59.7 59.7 - 93.1 93.1 - 99.9% o

f Em

ploy

ees

/ Ex

pect

ed S

ucce

ss

Rate

Retention Predictor Historical Score Ranges # Terminated # Retained

17

Retention Use Case – Financial Services

10% lowest scores tagged 61% actually left

47 employees correctly identified

Judgment Analytics 4.3% tagged

43% actually left

16 employees correctly identified

Analytics identified 3X more ‘at risk’ employees than manager assessment alone

152 terminated

18

HIGH PERFORMER

High Risk of Leaving

Save the most valuable employees

19 19

HIGH PERFORMER

Low Risk of Leaving

Optimize investment in employees

20 20

21

High Performer Predictor™ Results HIGH CHANCE

10% of employees

MED CHANCE 40% of

employees

LOW CHANCE 50% of

employees

0%

5%

10%

15%

20%

25%

30%

35%

40%

21.4 - 80.3 9.6 - 21.4 0.2 - 15.3

% o

f Em

ploy

ees

/ Ex

pect

ed S

ucce

ss

Rate

High Performer Predictor Historical Score Ranges High Perf Not High Perf

21

High Performer Use Case – Financial Services

~9% tagged 28% received >5% raise

Judgment Data ~27% tagged 13% received >5% raise

Analytics was 2X more effective at identifying current high

Best practice = 5-10% of talent pool

22

23

A simple philosophy to become data-driven

Data Knowledge Action

23

31% don’t like their boss Aberdeen Group 31% do not feel empowered Aberdeen Group 35% due to internal politics/turf Aberdeen Group 43% for lack of recognition Aberdeen Group

Why do people leave?

89% of managers believe that most employees are pulled away by better pay…but 88% of voluntary resignations happen for reasons other than pay Leigh Branham, “The Seven Hidden Reasons Employees Leave”

>60% do not feel like they get enough feedback Gallup Poll 75% of people leave because of work relationship issues Saratoga Institute 75% of people who leave voluntarily don’t quit their jobs; they quit their boss Roger Herman

#1 reason is lack of recognition Bersin #1 reason for millennials: not learning enough Business Insider

79% of those who quit their job cite lack of appreciation as primary reason SHRM

24

25

A SCARY STATISTIC 3 in 4 full-time workers are open to or actively looking for new job opportunities

Source: CareerBuilder - http://careerbuildercommunications.com/candidatebehavior

25

26

What makes people STAY?

POWER

GROWTH Receive Special Training

RECOGNITION

MONEY

AUTONOMY

Issue Cash Award

Become A Mentor

Send Handwritten note

Offer Flex Hours

26

My Leadership Actions

Prescriptive Analytics

UltiPro prescriptive actions provide practical advice

and inspirational messages about effective leadership.

27

28

The groups receiving actions have up to

50% lower turnover

28

FOR EXAMPLE: SUPPOSE YOU SAVE 10 MID-LEVEL PEOPLE

AVERAGE SALARY: $75,000

10 employees X $75,000 X 1.5 (replacement factor) = $1,125,000 in savings

29 29

30

Workshop #2 – Practice 6 Great Traits of Leaders

Vision Conviction Humility

Integrity Credibility Collaboration

How would you measure these things? What actions could you plan and take?

Source: “Follow Your Conscience” – Frank Sonnenberg

30

YOU NEED TO BE THE GAME CHANGER

Waiting is not an option

31 31

32

Game Changer

32

33

YOUR PEOPLE are YOUR BUSINESS

34