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WORKFORCE METRICS AND ANALYTICSWHY IS THIS STUFF SO HARD? FIVE EASY STEPSAugust, 2013

Brian KellyPartner, Global Practice Leader, Workforce Analytics & Planning

Astik RanadePrincipal, Workforce Analytics and Planning Leader, Asia, Middle East & Africa

MERCER WEBCAST

MERCER WEBCAST 1August 26, 2013 1August 26, 2013

Today’s presenters

Brian KellyPartner, Global Practice Leader,Workforce Analytics & PlanningMercer+215 350 [email protected]

Astik RanadePrincipal, Workforce Analytics andPlanning Leader – Asia, Middle East &AfricaMercer+65 6398 [email protected]

MERCER WEBCAST 2August 26, 2013

Agenda

• Introductions• Workforce Metrics and Analytics

– Why is This Stuff Important?– Why is It So Hard?

• Five Easy Steps• Closing Thoughts• Q&A

MARKET DYNAMICSWORKFORCE METRICS AND ANALYTICS:Why is this stuff important, and why is it sohard?


Workforce Economics: Think Like an Investor

With evidence-based decisionsInvest

And reap the returns….

GETTING STARTED WITH METRICS

Facts + Evidence =Effective Investment Decisions

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Why Is It Important?

Strategic“Making analytics and fact-based decisions is a keyelement of strategy and competition in HR andelsewhere.”

Tom Davenport, Competing on Analytics (2007)

Competitive Advantage“Leading-edge companies are increasingly adoptingsophisticated methods of analyzing employee datato enhance their competitive advantage.”

Tom Davenport, Jeanne Harris & JeremyShapiro, Competing on Talent Analytics (2010)

Financial“Companies fill their annual reports with informationabout how they use capital but fail to reflect on theiruse of the “thinking intensive” people whoincreasingly drive wealth creation in today’s digitaleconomy.”

The New Metrics of Corporate Performance: Profit per Employee,The McKinsey Quarterly (2007)

Companies using businessintelligence and workforce analyticstools obtained many significantbenefits, including:

• 14% year-over-year improvement inrevenue per employee (compared to5% for those that don’t)

• 20% decrease in unnecessaryovertime payments.

• A doubling in measured customersatisfaction.

• 13% increase in workforce utilization.

Source: Aberdeen Group, WorkforceAnalytics: Key to Aligning People toBusiness Strategy

5August 26, 2013


Deeper Analytics Help Us Move from “I think” to “I know”

Measurement Continuum

ReactiveChecks

Predictive/Causal

Modeling

Correlations

Benchmarks

OngoingReports

Simulationsand

Forecasting

Anecdotes

GETTING STARTED WITH METRICS


Polling question and resultsWhere is your organization on the measurement continuum?

38%

45%

7%9%

0%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Reactive checks /Ongoing reports

Benchmarks Correlations Simulations andforecasting

Predictive / causalmodeling


Two Categories of Human Capital Measurement

FOUNDATIONAL ADVANCED

Dashboards for monitoring Deep dive analytics

Output

Information

Uses

Tools

Counts, rates, and tabulations

WHAT is happening:What is our turnover rate?How many promotions didwe make?What are our spans of control?

Reporting (internal and external)Tracking progress toward goalsMonitoring trends

Business intelligence tools

Proven inferences about cause-and-effect relationships

WHY and WHERE it is happening:Why do people quit?Do lateral moves makeemployees promotable?What experiences driveemployee engagement?

Strategy makingForecastingProblem solving

Statistical modeling techniques

FIVE EASY STEPS


Five Easy Steps

#2 Don’t silo your thinking

#3 Avoid data smog

#1 Start with impact in mind

#4 Beware of the shiny new toy

#5 Make it stick


Five Easy Steps



Workforce Analytics: The Way We Currently Think

Collectdata

Choosemetrics

Reportmetrics

Analyzefindings

Assessimpact


Start with the Business Impact

Business Impact

Almost everyone else

HR Platform Focus

WorkforceIntelligenceWorkforceIntelligence

WorkforceAnalytics


Leverage Your Existing Metrics and Analytics

KEY POINT

The metrics and analytics are onlyas good as the question thatgenerated them


Change Your Thinking: Workforce Intelligence

Collectdata

Determineimpact

Choosemetrics

Collectdata

Analyzefindings

Reportmetrics


Get the Mindset of Your Senior LeadersQuestions to uncover the people issues

1. What do you believe are the biggest people challenges created by the company’sbusiness strategy?For example, attracting the right people, retaining people, developing them, managingindividual performance, cutting people costs, etc.?

2. What talent groups or categories will be critically important to achieving yourstrategic goals?What new kinds of talent will be needed? What kinds of talent are you concerned will bethe most difficult to obtain or develop? Why?

3. Would you say that your talent acquisition (or workforce development) strategy ischaracterized by a “build” or “buy” strategy?In looking toward the future, how should this strategy change?

4. Which skills/talent groups can be developed internally? Which need to be“bought” from the outside?

5. Do you anticipate any major changes in technology or other innovations that willaffect how people do their jobs?

6. Has “the deal” between the company and its employees changed?If so, how? (“The deal” includes but is not limited to job/economic security, promises ofthe future, total rewards, work environment, etc.)


Five Easy Steps




BusinessImperatives

+People

Strategy

Desired Impact

Focus on Desired Impact forYOUR Organization


Workforce Intelligence—An Integrated Model

THE APPROACHCreate an

Action-OrientedMetrics StrategyIntent:

Synthesize the ways inwhich HR data arebeing used to drivebusiness results

THE SKILLLaunch aData & DialogueCoaching Program Intent:

Expand organizationalcompetency to utilize

evidence-based dialogue

THE ENGINEAssemble

a RelevantData Engine

Intent:Supply core capability topowerfully combine andanalyze critical HR andother data

THE DELIVERYDevelop a COE thatLeverages TechnologyTools

Intent:Enable better decisions,

strategy development/deployment and

risk management—technology is key

Strategic

Operational

BusinessImperatives

+People

Strategy

MERCER WEBCAST August 26, 2013

Five Easy Steps


#3 Avoid data smog


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Building a Relevant Data Engine

THE ENGINEAssemblea Relevant

Data Engine

BusinessImperatives

+People

Strategy


Data Engine Defined

All Available Data

Data Relevant toBusiness Objective 2



All Data Relevant to CriticalWorkforce Questions =The Data Engine

KEY POINTAs the businessobjectives/questionschange, the relevantdata must also change.


Assembling a Data EngineThe power of combined data sources—actionable insights

• Productivity• Quality• Cycle Time• Unit Cost

• Employee Demographics• Recruiting• Performance• Training & Development• Turnover & Retention• Engagement• Comp & Benefits• Mobility• Diversity• Employee Energy• Social Networks • Revenue

• Expenses• Profitability

• Assets/Liabilities

• Customer Satisfaction• Loyalty

• Acquisition Costs• Churn Rate

FinancialData

Customer Data

Human Capital Data

Operations

&

Business Data

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… But It is Ok to Build Your Data Engine in Stages

24August 26, 2013

Compare termination trends across business divisions and locations.

Break-down termination trends by attributes such as critical role, highperformers, age/tenure to identify risk areas.

Evaluate turnover risk areas by exit surveys, pay, managertenure, promotions, to build hypothesis on the drivers of

turnover.

Determine correlation between financialresults and turnover.

Use data on internal employeecharacteristics and external

labor market to run statisticalmodels on drivers of turnover.


Evaluate readiness before assembling your engineReadiness dictates what goes in the data engine, how it isdeployed (Technology), and who receives what levels of data (Skill)

Explain your criteria for including dataDisclaim any issues

Start small, build gradually, derive value as you goEven simple data can generate impact; start with what you have

Don’t strive for perfection, just transparencyDisclose the data source and any processes it’s undergone

Continually tune your engineRevisit your data engine to ensure it’s still relevant to business imperatives

Employ scalable technology to accelerate sharing and adoption

Best Practices for Assembling a Relevant Data EngineFacilitate data-driven decision making

THE ENGINEAssemble a

RelevantData Engine


Five Easy Steps


#3 Avoid data smog


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Technology

It’s Not JUST About Technology

27

• Technology and data integrity is onlyhalf of the solution

• Organizations should spend a leastthe same amount of timeconsidering changemanagement,communication andunderstanding insights

ConsultingConsulting

Technology


Match Your Story to the Audience

DATA PEOPLE DIALOGUE PEOPLE

Good stories come from all levels of data

Copyright © Dr. Theresa M. Welbourne


Five Easy Steps


#3 Avoid data smog



#5 Make it stick

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Tell TheRight Story

Tell TheRight Story

Tell TheRight Story

Deliver Data and Insights In the “Right Way”

Educate,Engage

and Coach

Educate,Engage

and Coach

Educate,Engage

and Coach

EvaluateMeasuresEvaluateMeasuresEvaluateMeasures

GenerateNew

Insights

GenerateNew

Insights

GenerateNew

Insights

Your Performance

30August 26, 2013

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Center Of Expertise:Owned by the institution, driven and facilitated by HR

• Give strategic guidance andcontext

• Institution scenarios andrelated workforce solutions

• Manage implementation &communication

Strategic guidance

InstitutionLeaders

Process facilitation

• Facilitate workforceanalytics & planningprocess with institutionmanagers

• Ensure results, validation& implementation

HRBP

Process & quality guidelines• Define workforce planning process, provide guidance & templates

• An objective, single source of data in workforce analytics & planning

• Ensure communication and training of all stakeholders (HR & line)

COE

LEVEL-SETTING: NEXT GENERATION HR AND THE ROLE OF CENTERS OF EXPERTISE31

CLOSING THOUGHTS


Five Easy Steps


#3 Avoid data smog



#5 Make it stick

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Process Technology

• Prioritize work so that day-to-day queries don’tdrive out longer-term strategic activities

• Ensure the right amount of emphasis is placedon both sophisticated analysis and on joiningmultiple data

• Eliminate data credibility concerns• Ensure that the business owns its workforce

planning efforts

• Develop systems and tools to managed datafrom multiple countries

• Ensure HR can access all required data• Ensure data integrity throughout all systems• Develop systems and tools with a full

understanding all business requirements

Talent Organization

• Ensure that expertise resides in more than oneor two experts

• Get people comfortable talking about HR interms of testing and evidence

• Ensure HR has the skills to select data andperform analyses

• Provide training to potential data users toensure they have the knowledge required tointerpret the information and insights providedby the COE

• Ensure the function is adequately staffed• Leverage change management strategies to

minimize wariness to adopt an evidence-based culture that can permeate fromexecutives down to employees

• Provide incentives for sharing data acrossfunctions

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Pitfalls for a Workforce Analytics and Planning COEYou’re in trouble if you don’t…


What’s coming up nextWorkforce analytics and planning webcast series

Telling the story with data: Gaining senior-level support for analytics and planningSeptember 24, 2:00 PM – 3:00 PM

www.mercer.com/webcasts/telling-the-story-with-dataPredictive analytics: How the power of analytics can help drive business success

November 6, 2:00 PM-3:00 PMwww.mercer.com/webcasts/predictive-analytics


What’s coming up nextWorkforce analytics and planning workshop series

WORKFORCE METRICS AND ANALYTICS:Driving Business Results with DataSeptember 13, 2013

STRATEGIC WORKFORCE PLANNING:Defining and Fulfilling Business RequirementsOctober 30, 2013

For more details, visit www.mercer.com/analytics-and-planning-workshops-amea

MERCER WEBCAST 37August 26, 2013 37August 26, 2013

Questions?

Brian KellyPartner, Global Practice Leader,Workforce Analytics & PlanningMercer+215 350 [email protected]

Astik RanadePrincipal, Workforce Analytics andPlanning Leader – Asia, Middle East &AfricaMercer+65 6398 [email protected]

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