data driven hr: the value of workforce...
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The Business Value of Workforce Intelligence
Lexy Martin, PrincipalResearch and Customer ValueVisier
High‐Level Business Impact of Workforce Analytics
Bersin by Deloitte: High Impact Talent AnalyticsCEB Corporate Leadership Council: The Analytics Era
Sierra‐Cedar HR Systems Survey
Workforce Intelligence Human Capital Productivity Value Chain
Improved workforcedata for decision
making
Improved employee& managerproductivity
Ability to develophighly qualified
workforce
CompetitiveadvantageWorkforce intelligence Return on Equity
Structural Equation Path ModelingConducted by Dr. Janet Marler,
School of Business, University at Albany‐SUNY
PollAre you getting value from workforce intelligence automation?1. Yes – both HR and business leaders use; we achieve value for HR and the business2. Yes – HR business partners use and achieve value within HR3. Yes – we just started and spend less time/resources on reporting and analysis 4. No – we are looking for support for our business case
Workforce Intelligence Value
CUSTOMER JOURNEY
Focused on making interventions from insights that make a difference to HR and
improving its key metricsFocused on impacting business metrics that matter to the C‐level
Focused on deploying technology cost efficiently and saving reporting and
analysis labor costs
HR Effectiveness
Value
Business Impact /Strategic Value
Technology / Labor Efficiency Value
Technology / Labor Cost Efficiency Value: Changing from Reporting to AnalyticsDelivers Headcount Savings as Well as More Strategic Work
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10
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70
Strategist Catalyst Steward Operator
Historical HR Business Demand
Characteristics of Organization’s First Steps towards Workforce Intelligence Maturity Data definition standardization Data cleansing Process standardization or improvement Alignment activities Additional data sources integrated Dialogue expands
HR Effectiveness ValueTurnover Reduction Impact
Visier customers outperform peers in retaining talent BLS shows turnover is increasing nationwide in the US from 22.5% in 2014 to 23.5% year end 2015 Visier customers are keeping resignations stable. They are seeing a reduction in resignation rate from .6 of the BLS rate in the year prior to Visierdeployment to .52 after two years with Visier, a 13% relative difference. Among the manager category, resignation rate is down by 30% among Visier customers!
HR Effectiveness ValueFirst West Credit Union Prevents Merger‐Driven Attrition
Challenges Two mergers raised need to mitigate unwanted turnover HR lacked technical ability and know‐how to develop and produce their own analytics Workforce data was housed in multiple, disconnected systems
Solution• Turnover analysis of roles and locations
Results• Over 13 percent reduction in critical talent turnover of customer‐facing staff
HR Effectiveness Value BBVA Compass Reduces Turnover by 44%
Challenges HRMS reports did not provide meaningful insights HR analytics team spent most of its time managing data instead of performing analysis HR analytics team was unable to increase headcount
Solution Iterative turnover analysis
Results More time for high‐value analysis, without adding to HR analytics team headcount 44 percent reduction in turnover for a key revenue‐producing role
HR Effectiveness ValueRetail Firm Made its Case that Improving Quality of Hire Can Increase Revenue
Challenges
Improve quality of hire
Solution
• Analyze talent pipeline efficiency to understand sources that generate top performers.
• Look at experience, background, and pay.
• Track recruiter effectiveness and recruiting program effectiveness for sourcing comparable performers.
Results
• By increasing new hire sales by $50,000 in the first year, it could drive $37.5 million extra sales per year
HR Effectiveness ValueElectronic Arts Justifies HR Recruiting Program
Initial Challenges HRMS reports were difficult to produce
Reporting environment did not allow for enough analysis
Analytics team could not keep up with leadership requests
Approach: Fast‐forward as the Team Matures its Analytics Capabilities to Create Results It analyzed performance, promotion, and cost data from hires over the past four years, compared to its existing workforce.
Results: New grad hires, after two years at EA, were promoted at a higher rate, were more likely to be rated as high performers, and cost the company less than experienced peers.
EA encouraged business leaders to commit to a more aggressive new‐grad hiring target for the following year through the continuation of the University Relations Recruiting Program.
Characteristics of Most Mature Workforce Intelligence Organizations Workforce Intelligence is supported by and used at the C‐level Analytics vision is tied to business strategy, goals and objectives Establishment of workforce analytics center of excellence Non‐HR data sources integrated Extensive use by managers Expanded metrics set analyzed Extensive change management approaches
Business Impact and Strategic Value of Workforce Intelligence Business issues have to do with growth and increasing revenue or improving
profits as well as industry‐ or organization‐specific issues and metrics
This level of analytics starts with questions of: What issues are most critical to our business?
What are the goals and objectives?
How can the workforce support these goals and objectives?
To increase profits/improve margins, what workforce metrics can best determine impacts?
Which analytic insights link to customer satisfaction and then to increased revenue?
Are our engagement initiatives driving what’s important to your goals and objectives?
Business Outcomes / Strategic ValueA Strategic Reduction in Force
Challenge Reduce workforce expenses globally
Approach: Analyzed its workforce by location against dimensions of revenue generated, costs, and risks. Answered strategic question:
Are we in the right regions in terms of cost and productivity of labor.
Results: Managers identified the geographies where a RIF would have the least impact on the business.
This delivered the same expense reduction but with a strategic focus vs. an across‐the‐board RIF, setting the firm up more strategically for the future.
Business Outcomes / Strategic ValueStrategic Pay Practices End Up Improving Firm Performance
Challenge A financial services organization needed to improve firm performance
Approach: Analytics team with CEO: Discovered that those at senior salary grades had variable incentive payments growing out of line with their performance.
CEO ordered each line of business executive to review workforce costs, specifically pay increases and incentive pay, to ensure they were in line with performance results.
Results: The organization experienced cost savings in incentive payments and initiated an enhanced level of responsible pay practices that ended up improving firm performance
Business Outcomes / Strategic ValueImpacting Product Success throughAnalyzing Successful Team Factors Challenge
Understand the relationships between development teams and game performance
Approach: Analytics team: Analyzes workforce and business data to discover best predictors of success for each game going to market.
Reviews attributes of teams and team members that develop, market, and support each video game, comparing with product data, game quality, financial results and customer satisfaction to discover paths leading to the best results.
Results: Improve firm performance as the interactions are better understood and higher revenue, more profitable games are produced.
Business Outcomes / Strategic ValueMargin Improvement in Right Talent / Right Cost Project Staffing
Challenges A large professional services organizations needs to:
• attract and retain qualified staff on an ongoing basis• understand the cost of people to deliver its contracts and to ensure they are profitable• respond quickly, consistently, and with agility to each RFI and RFP.
Approach: Analytics team with business partners Analyzed the total cost of workforce on experience, tenure, salary and location Conducted scenario‐based workforce planning to determine the optimum mix of consultants
ResultsThey can now choose the right mix of junior and experienced staff by exploring how costs will increase as staff become more senior and higher paid.
It is lowering costs on its consulting projects an average of $1 million each and improving margins.
Business Outcomes / Strategic ValueRevenue Lift from Retained Staff
Challenge A financial services organization suffered from turnover issues
Approach: Analytics team with HRBPs and managers experimented with: Addressing pay inequities Improving manager communications with employees Improving onboarding training Conducting ongoing development
Results: A revenue lift of retained staff of $200,000 per employee yielding significant revenue as turnover declined
Business Outcomes / Strategic ValueThe Strategic Impact of Safety
Challenges Identifying the root causes of safety incidents
Approach Review safety incidents across different dimensions to see what actions are needed to address potential issues
Results Maintain worker safety Contribute to cost savings by reducing insurance premiums when safety performance improves
Business Outcomes / Strategic ValueKey Metrics for C‐level Executives
Challenges Assessing corrective actions on degrading employee performance when necessary
Approach Dashboard for executives that includes a key metric of employee performance – EBITDA per employee
Results Executives can see a caution indicator and drill down to assess contributors to determine necessary corrective actions.
Business Outcomes / Strategic ValueMore Accurate Workforce Plans
Challenges Constrained, inaccurate workforce planning process
Approach Use Visier’s workforce planning to turn its yearly planning cycle into a continuous planning process.
Results Reduced its workforce planning cycle time by 25% Improved the accuracy of its hiring plan and its headcount plan Plans that had been padded are now within 3% of what was actually needed At an average headcount cost of $100,000, this translated to an additional $97 million the business could invest elsewhere immediately.
Business Outcomes / Strategic ValueMitigating the Risks of Pay Inequity
Challenge Possible non‐adherence to equal pay laws Example: Insurance company settled a pay discrimination suit at an average of $133,333 for each plaintiff
Approach Analyze pay practices and discover pay equity risksbefore they turn into issues
Track whether high pay is due to longer tenure, more education, or higher performance
Results: Mitigate risks to avoid unexpected costs, improve long‐term productivity, and increase employee engagement
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Visier Workforce IntelligenceA Summary of ValueT E C H N O LO G Y A N D L A B O R C O S T E F F IC I E N C I E S
B u s i n e s s i n t e l l i g e n c e d e p l o y m e n t c o s t s a v o i d e d $ 2 , 2 5 0 , 0 0 0 p e r o r g a n i z a t i o n 1
S a v i n g s f r o m r e p l a c i n g l e g a c y a n a l y t i c s p l a t f o r m $ 3 3 6 , 0 0 0 p e r o r g a n i z a t i o n 2
D a t a i n t e g r a t i o n c o s t s a v o i d e d $ 2 4 0 , 0 0 0 p e r o r g a n i z a t i o n 3
H R l a b o r c o s t s a v i n g s $ 6 0 , 0 0 0 p e r y e a r 4
H R E F F E CT I V E N E S S
S a v i n g s f r o m r e d u c e d t u r n o v e r $ 1 5 , 3 5 4 , 6 4 0 p e r 1 0 , 0 0 0 e m p l o y e e s p e r y e a r 5
B U S I N E S S A N D S T R AT E G I C VA L U E
H i g h e r m a r g i n s o n p r o f e s s i o n a l s e r v i c e s c o n t r a c t s $ 1 M - $ 3 M p e r m u l t i - y e a r c o n t r ac t 6
R e v e n u e u p l i f t f r o m r e t a i n e d e m p l o y e e s r e c e i v i n g a d d i t i o n a l t r a i n i n g
$ 2 0 0 , 000 p e r e m p l oy ee p e r y e a r 7
R e d u c e d r i s k o f p a y e q u i t y l a w s u i t $ 1 3 3 , 3 3 3 p e r e m p l o y e e n a m e d i n s u i t 8
Wo r k f o r c e p l a n n i n g a c c u r a c y $ 1 0 0 , 0 0 0 p e r h e a d c o u n t i m p r o v e m e n t i n a c c u r a c y p e r y e a r 9
Justifying Workforce Intelligence Reference Material
Visier: Total Economic Impact of Workforce Intelligence Visier: Data‐driven Success Stories with Visier Visier: Building Your Business Case for Workforce Intelligence Sierra‐Cedar: The Quantified Organization: Creating Data‐driven HR First West Credit Union: First West Credit Union Defending Against Attrition Electronic Arts: Building a Data‐Driven Culture with Workforce Intelligence BBVA: BBVA‐Compass Capitalizing Workforce Insights to Reduce Turnover Yahoo: Yahoo’s Use of Visier Workforce Analytics Shows $2.5 Million Savings Bersin: Calculating the True Cost of Voluntary Turnover: The Surprising ROI of Retention Visier: Insights Report Gender Equity
Thank youLexy [email protected]@lexymartin
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