building a business case for talent analytics · pdf filebuilding a business case for talent...

Building a Business Case for Talent Analytics

Karen O’Leonard, VP, Analytics & Benchmarking Research

Sally-Ann Cooke, Research Analyst, HCM Technology Research

Copy right © 2014 Deloitte Development LLC. All rights reserved. 1 Building a Business Case for Talent Analytics

Why companies are investing in talent analytics

Structuring a business case for talent analytics

Presenting the business case

Q&A

Contents

?


The Push

The next “great frontier”

Something everyone needs to do to “keep up”

Critical for cost savings

A component of “operational life” (i.e., dashboards, scorecards,

metrics)

Something the CFO is pushing

Why Now?

Widespread adoption of HR management systems and the advent of

cloud storage

Software is now more affordable and readily available

The real catalyst for talent analytics is to improve talent and business outcomes.

What Drives the Need for Analytics


Talent Analytics is Getting Investment

33% 31% Hired additional staff for measurement and analytics

33% 31% Invested in a data warehouse

33% 19% Purchased data analysis tools

Source: High-Impact Talent Analytics, Bersin by Deloitte, 2013


Talent Analytics Pays Off HR organizations using predictive analytics are:

3X

more likely to realize cost savings and efficiency gains

2X more likely to improve their

recruiting efforts

2X more likely to improve their

leadership pipelines

Generating 30% higher

stock returns than the S&P

500 over the last 3 years

Source: High-Impact Talent Analytics, Bersin by Deloitte, 2013


Structuring the Business Case


What Keeps Executives Up at Night


Types of Stakeholders

• Sponsor or Champion

• Decision-Makers

• Beneficiaries

• People or Groups Impacted by

Your Solution

Identifying Stakeholders

Example Example of

Stakeholders

• Increased Absenteeism

• High Turnover

• System Consolidation

• Critical Skills Gaps

• High Benefit Costs

• Labor Law Changes

• Environmental Emergencies

• Line Managers, COO

• CEO, CHRO, Line Managers

• CIO

• CEO, CHRO, Line Managers

• CFO, CHRO

• Legal Counsel

• Health & Safety, COO


Define the Solution

Know what you have

Consider alternatives

Detail the solution

Account for dependencies

Account for risks


Detail the Solution: Considerations

Where will the solution be used? In what offices or

facilities? In how many countries?

Does the solution build upon your current resources

and/or infrastructure?

How quickly does the solution need to be in place?

Will we roll it out over time or all at once?

How should we measure the solution’s

effectiveness?


Alternatives for Technology Implementation

• What if your proposal is approved, but on a smaller scale?

Implement a Segment-by-

Segment Rollout versus an

Enterprisewide Approach

• What will be the impact on the organization be if your business case is not funded

and you continue in your current state? Do Nothing

Enhancing Existing Systems • Can you upgrade or enhance your existing systems to better fit your needs? What

are the costs of and resources available for that alternative?

Obtain a Less Costly System • Is there a less-expensive option, and what are the pros and cons of that choice?


Example: Comparison of Options

Source: Bersin by Deloitte, 2014.


Example: Comparison of Preferred Choice vs. “Do

Nothing” Option



Typical Types of Costs

Technology/Tools costs

Headcount costs

Overhead costs

Training costs

Testing (Sandbox) costs

Hiring costs + onboarding

Allocated time for current staff

New analytic-specific software

Upgraded modules of existing

software

Hardware

New or revised facilities


Example of Costs



Provide Assumptions for Costs



Identify the Business Issues and Stakeholders

Define the Solution

Identify Costs

Quantify Impact

Present the Business

Case

Identify issues

impacting the

business

Identify

stakeholders

and

constituents

Articulate in

ways that

engage the

key

stakeholders

Know what

you have

Consider

alternatives

Detail the

solution

Account for

dependencies

Account for

risks

Gather cost-

related

information

Engage

stakeholders

to guide cost

calculations

Provide

assumptions

and

benchmarks

for costs

Identify

expected

benefits

Quantify the

benefits

Identify

intangible

benefits

Know the

competing

projects

Meet with the

“deciders”

prior to the

business case

presentation

Be able to tell

your story in

15 minutes or

less

If Benefits > Costs over a given time period,

you have a compelling business case!


Examples of Benefits


Example Quantifying the Benefits

Cost Savings: Hard Costs Cost Savings: Soft Costs

Soft Costs

Time to source / identify new

candidate 10 days

Time to recruit new candidate 50 days

Time to train/develop in year 1 20 days

Total 80 days

16 wks (80 days) x $2,000/wk $32,000

Time to reach productivity $16,000

Total soft costs per employee $48,000

Hard Costs

Recruiting and hiring costs per

employee $20,000

Training and orientation costs per

employee $ 8,000

Total hard costs per lost

employee $28,000

Reducing voluntary attrition among critical roles




Soft Costs


candidate 10 days



Total 80 days

16 wks (80 days) x $2,000/wk $32,000



Hard Costs


employee $20,000


employee $ 8,000


employee $28,000


Total Cost of Voluntary Turnover Per Lost Employee

Hard Costs $28,000

Economic (Soft) Costs $48,000

Total $76,000 per lost employee




Soft Costs


candidate 10 days



Total 80 days

16 wks (80 days) x $2,000/wk $32,000



Hard Costs


employee $20,000


employee $ 8,000


employee $28,000


Cost of Voluntary Turnover to Organization

1% Voluntary Turnover Rate

X 30,000 employees

X $76,000 cost per employee

Total Cost $22.8M

This organization stands to

save $22.8 million for every 1 point

decrease in their voluntary turnover rate

Total Cost of Voluntary Turnover Per Lost Employee

Hard Costs $28,000

Economic (Soft) Costs $48,000

Total $76,000 per lost employee


Example: Changing Time Allocation

Source: Large Financial Services Institution, 2014.



Identify the Business Issues and Stakeholders

Define the Solution

Identify Costs

Quantify Impact

Present the Business

Case

Identify issues

impacting the

business

Identify

stakeholders

and

constituents

Articulate in

ways that

engage the

key

stakeholders

Know what

you have

Consider

alternatives

Detail the

solution

Account for

dependencies

Account for

risks

Gather cost-

related

information

Engage

stakeholders

to guide cost

calculations

Provide

assumptions

and

benchmarks

for costs

Identify

expected

benefits

Quantify the

benefits

Identify

intangible

benefits

Know the

competing

projects

Meet with the

“deciders”

prior to the

business case

presentation

Be able to tell

your story in

15 minutes or

less


Presenting the Business Case

Are your ducks in a row?

State the problem or business opportunity

Describe the solution

Identify possible risks, dependencies,

and assumptions

Quantify the benefits / impact

Provide cost details Provide a brief

summary

1 2 3

4 5 6


Potential Hazards

Not aligned with a

corporate goal

Lack of a champion or

sponsor

Stakeholders not well

informed or supportive

Costs not well-defined or

validated

Benefits not defined in

business terms

Solution not clearly

defined


Small Steps

• Build the foundational elements: Know your data,

resources & infrastructure

• Implement a few small, successful projects

• Identify other stakeholders for a collaborative first

project


Resources Available to Members at www.bersin.com

Show Me the Money: How to Secure

Funding for Your Talent Analytics

Business Case

High-Impact Talent Analytics

Getting Started with Talent Analytics

Five-Star Data Quality

Business Case Template for Talent

Analytics – Word and PowerPoint

Talent Analytics Maturity Model

Talent Analytics Maturity Assessment

Talent Analytics Framework

Reports Tools

Recordings

Analytics Driving Action

HR Analytics for Driving People Strategies

Making Better Decisions: Data, Big Data, and You

Driving to World-Class Talent Analytics

Thank You!

Karen O’Leonard

Bersin by Deloitte

Deloitte Consulting LLP

[email protected]

Sally-Ann Cooke

Bersin by Deloitte

Deloitte Consulting LLP

[email protected]

mailto:[email protected]

mailto:[email protected]


This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. As used in this document, "Deloitte" means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

About Deloitte

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of

member f irms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also

ref erred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a detailed description of DTTL

and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its

subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Copy right © 2014 Deloitte Development LLC. All rights reserved.

36 USC 220506

Member of Deloitte Touche Tohmatsu Limited

http://www.deloitte.com/about

http://www.deloitte.com/us/about

building a business case for talent analytics · pdf filebuilding a business case for talent...

Documents