Workshop
HR Analytics in SSC
Sjoerd van den Heuvel
Eva Reuling
Welcome!
Eva ReulingDirector Institute for Labor and Organization
University of Applied Sciences Utrecht
Sjoerd van den HeuvelPeople Analytics Researcher and lecturer
University of Applied Sciences Utrecht
What will we be doing?
Introduction into People Analytics
Logic
Absenteeism
Employee turnover
Job performance
Measures and Analytics
Analytics principles
Predictive analytics
Process
What will we be doing?
Developing your People Analytics question
Conceptual modeling
Debating
“The higher the number
of people going to the
beach, the more the sun
will shine”
What is HR Analytics (and especially…what not)?
“We should invest in X,
because then Y
decreases”
0
2
4
6
8
0
2
4
6
8
YZX
Y
Z
X
Y X
X Y
X Y
What is HR Analytics (and especially…what not)?
“the systematic identification
and quantification of the
drivers of business outcomes,
with the purpose of making
better decisions.”
Understanding
Explaining
Predicting
What is HR Analytics (and especially…what not)?
HR Analytics
Workforce analytics
Talent analytics
…
People
Analytics
What is HR Analytics (and especially…what not)?
What strategic People
Analytics question would
you like to answer in your
organization?
Logic of absenteeism
Logic of absenteeism
Absenteeism is any
failure to report for or
remain at work as
scheduled, regardless
of reason.Versus
Logic of absenteeism
13
Logic of absenteeism
Generally 5 categories:
Personal Illness
Family-Related Issues
Entitlement Mentality
Stress
Personal Needs
14
Causes Absenteeism Consequences
Source of data: “2007 CCH Unscheduled Absence
Survey,”Human Resources Management Ideas &
Trends 664 (October 10, 2007).
Logic of absenteeism
Generally 4 categories:
Cost of payments for non-work time of absentees
Cost of managing absenteeism problems
Cost of time of replacement workers
Cost of reduced work quantity or quality
15
Indirect costs versus direct costs
Causes Absenteeism Consequences
Logic of absenteeism
16
Others perform work? Process stopped? Activities delayed / missed?
Causes Absenteeism Consequences
Logic of employee turnover
Logic of employee turnover
Average turnover rate?
Consequences?
18
Logic of employee turnover
19
Employee separation,
also called employee
turnover, is the
situation where an
employee permanently
leaves an organization.
Logic of employee turnover
20
Quantity Quality Cost
Voluntary versus involuntary
Logic of employee turnover
21
On which one should you focus?
Functional versus dysfunctional
Logic of employee turnover
22
Logic of employee turnover
23
Costs are easily
100% to 250%of departing person’s salary,
depending on the employee’s skill
and level of responsibility.
Computing turnover
rates
Number of turnover incidents per period
───────────────────────── ×100
Average work force size
Exit interview
Administrative time
Separation pay
Unemployment tax
Pension and benefit payouts
Supplemental unemployment benefits
Severance pay in lieu of bonus
Accrued vacation and sick pay
Lawsuits by aggrieved employees
Logic of employee turnover
24
Separation costs Replacement costs Training costsLost productivity & Lost
business
* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,
involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.
Communication of job availability
Pre-employment administrative functions
Entrance interviews
Testing
Staff meetings
Travel/moving expenses
Post-employment acquisition and dissemination of information
Employment medical exams
Rehiring of former employees
Logic of employee turnover
25
Separation costs Replacement costs Training costsLost productivity & Lost
business
* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,
involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.
New employee orientation literature and activities
Formal training
Instruction by experienced employee
Logic of employee turnover
26* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,
involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.
Separation costs Replacement costs Training costsLost productivity & Lost
business
Performance differences between leavers and their replacements
Cost of additional overtime to cover the vacancy
Cost of additional temporary help
Wages and benefits saved due to the vacancy (so subtract these!)
Cost of reduced productivity while the new employee learns the job
Cost of lost productive time due to low morale of remaining employees
Cost of lost customers, sales, and profits due to the departure
Cost of additional (related) employee departures
Logic of employee turnover
27
Separation costs Replacement costs Training costsLost productivity & Lost
business
* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,
involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.
Logic of job performance
Logic of Job performance
29
Pivotal talent pools
are talent pools that
have the greatest
strategic impact
Logic of Job performance
30
Logic of Job performance
31
Logic of Job performance
32
Logic of Job performance
33
Logic of Job performance
34
Logic of Job performance
Nature of job:
autonomy and
discretion
Relative value of
variations in
performance to
the organization
What does the conceptual
model look like for your
strategic People Analytics
question?
Measures and Analytics
6Actions
5Insights
4Analytics
3Metrics
2Data
1Opinion
Measures and Analytics
Measures and Analytics
39
Measures and Analytics
40
Time lags Levels of analysis Causal ordering
1 Schweiger, D. M., & DeNisi, A. S. (1991).
Communication with employees following a
merger: A longitudinal field experiment. Academy
of Management Journal, 34(1), 110–135.
Measures and Analytics
41
6,7 7
Company A Company B
Time lags Levels of analysis Causal ordering
Measures and Analytics
42
3 8 9 7 7 7
6,7 7
Company A Company B
Time lags Levels of analysis Causal ordering
Measures and Analytics
43
3 8 9 7 7 7
6,7 7
Company A Company B
Time lags Levels of analysis Causal ordering
Measures and Analytics
Church of the Flying Spaghetti Monster Pastafarianism
44
Somalia has "the highest number of pirates and the lowest carbon
emissions of any country"
Time lags Levels of analysis Causal ordering
Temporal priority
Concomitant variation
Elimination of other plausible alternatives
Measures and Analytics
45
Time lags Levels of analysis Causal ordering
Measures and Analytics
46
Bron: Eric Siegel, Predictive Analytics
Measures and Analytics
Decision three
Regression formula
Algorithm
…
Step 1
Collecting data
Step 2
Learning from data
Step 3
Creating predictive
model
Step 4
Collecting individual
characteris-tics
Step 5
Applying
Predictive model
o Correlation (mwa..)
o Regression
o Causality
o Cluster analysis
o …
Measures and Analytics
Who: 150 employees
Goal: improve productivity
Means: training12%!
Measures and Analytics
Costs of training per employee: €5000,-
So, total costs: €750.000,-
Average productivity increase: €5600,-
So, total productivity increase: €840.000,-
So, benefits – costs: €90.000
Return on investment: 12%
1. Leadership profile of manager
2. General engagement of employee
3. Tenure function
4. Temporary or permanent contract
5. Amount of training hours
300%
30 employees
• €20.000 increase
• Total: €600.000,-
120 employees
• €2.000 increase
• Total: €240.000,-
Effectivity of training determined by:
€5000,-
€150.000
€20.000
€600.000
€450.000
Loose the responsibility for reporting
Interns are no game changers
Step outside of your domain; focus on crucial business challenges
Know your languages (business, statistics, consultancy, IT, …)
Start with modelling (and conceptualizing and operationalizing)
From lobbying (begging?) to pro-actively generating appetite
From producing decisions to challenging insights
Process
Thank you for your participation!
Sjoerd van den Heuvel
Eva Reuling