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THOUGHT LEADERSHIP PAPER | 2017 USING DATA DRIVEN INSIGHTS TO DRIVE WORKFORCE STRATEGY HOW TO ADOPT A DATA DRIVEN & ANALYTICAL APPROACH TO HUMAN RESOURCES

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THOUGHT LEADERSHIP PAPER | 2017

USING DATA DRIVEN INSIGHTS TO DRIVE WORKFORCE STRATEGYHOW TO ADOPT A DATA DRIVEN & ANALYTICAL APPROACH TO HUMAN RESOURCES

CONTENT

Introduction01

What is predictive analytics?01

What’s driving data insight?01

How data insight adds value to HR01

Example: Recruitment01

Example: Reward01

Example: Retention01

Example: Workforce efficiency01

How to approach an analytics project01

Conclusion01

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Thought Leadership Paper 2017

We help businesses to harness their data and use it to understand, model and predict business performance - delivering improved

engagement, efficiency and profitability.

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INTRODUCTIONPredictive analytics, people analytics, workforce analytics, talent analytics – they are all terms to describe the use of data to address and predict business outcomes. In this paper we take a look at why predictive analytics has become the must-have tool to drive operational and competitive advantage; how HR executives can use data and analytics to inform better business performance, and the most effective ways to approach an analytics project.

“Data insights enable HR

teams to see with clarity,

not only what is currently

happening, but more

importantly, to determine

trends, patterns, and even

predict future behaviours.”

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Thought Leadership Paper 2017

WHAT IS PREDICTIVE ANALYTICS?Predictive analytics involves using a range of techniques and disciplines, such as statistical algorithms and analytical models, to analyse streams of structured, unstructured, internal and external data. It’s a massive step forward from traditional Business Intelligence solutions that involve the manual analysis of historical business data - a process that can be extremely time consuming, error prone and delivers limited insight based on historical data.

By analysing real-time, consistent and accurate data from multiple sources, predictive analytics will deliver the insight you need to help you forecast the future, predict trends, and implement sophisticated, proactive solutions and processes across your organisation.

“The goal of predictive

analytics is to go beyond

knowing what has

happened in the past and

making critical business

decisions based on

retrospective insights,

towards providing the best

assessment of what will

happen in the future.”

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WHAT’S DRIVING DATA INSIGHT?Why are more and more organisations turning to predictive analytics to aid their critical business decision-making? Because cost effective and flexible cloud storage solutions have made it possible for them to store vast amounts of data from every conceivable channel - from disparate databases, files and web services, to mobile devices, sensors and transactions, and many more. Previously siloed data can now be collated, managed and analsyed in real time.

Many organisations have already adopted predictive analytics for core business functions such as finance, customer relationship management, marketing and sales, but now the pressure is on Human Resources departments to exploit the opportunities that predictive analytics presents. Opportunities that are extremely exciting.

Where historically HR has focused on reporting and policy making based on retrospective insights, today senior executives are asking HR directors to step away from a service delivery

model and adopt a more strategic business partner role – one that drives the organisation’s workforce strategy.

According to Deloitte’s Global Human Capital Trends 2016, “As technology makes data-driven HR decision-making a possibility, 77 percent of executives now rate people analytics as a key priority, up slightly from last year.” However, it goes on to report that only “forty-four percent are now using workforce data to predict business performance.”

That demonstrates that while many HR executives have a keen appetite to explore the opportunities of predictive analytics, there are still many who have yet to embrace data driven HR. So let’s start by looking at how data insight can add value to the HR function...

77%EXECUTIVES RATE PEOPLE ANALYTICS AS A KEY PRIORITY

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Thought Leadership Paper 2017

HOW DATA INSIGHT ADDS VALUE TO HRHR is without a doubt, one of the key business functions that can use data insights to maximum business advantage. Data insights enable HR teams to see with clarity, not only what is currently happening, but more importantly, to determine trends, patterns, and even predict future behaviours.

With such powerful modelling and forecasting capability, HR executives can use data to discover opportunities to improve retention and performance; analyse flight risk; identify high performing job applicants; as well as the characteristics of high-performing sales teams and leadership candidates. They also can use it to diagnose management weaknesses; analyse engagement and culture; and identify high-value career paths and leadership candidates.

Take a look at some examples of HR focused predictive analytics projects that Altius has completed recently...

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“Imagine coming up with a model to help improve

the efficiency and productivity of your workforce,

based on the performance of your highest achievers.”

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Thought Leadership Paper 2017

Recruitment is not only incredibly competitive, it is also incredibly costly. By combining data from multiple sources, such as recruitment, performance, training and sales systems, you can build a model that demonstrates what a good recruit looks like. Just imagine how valuable that information would be to your organisation?

Altius recently helped an international retailer to understand the profile of its ideal recruit. Our client had long perceived that the best candidates were aged between 24-30. However, having taken data from multiple sources, we were able to show them that candidates from an entirely different age bracket were far more likely to remain in employment and generate greater sales. A very profitable win when you consider what it costs to recruit and train new employees.

Modelling how small changes can impact employee behaviour will have a considerable affect on your company’s bottom line. Disgruntled employees will not only be under performing, they will take more sick days, have a negative affect on company morale and are more likely to leave. Conversely, an employee who feels recognised and rewarded for their contribution will be more engaged, perform optimally and have a positive impact on morale.

Altius was able to demonstrate the negative impact that zero hour contracts were having on a client’s workforce. The client had perceived that its flexible engagement model was favoured by employees. However, analytics revealed that providing employees with regular, predictable employment patterns significantly improved both retention and morale.

RECRUITMENT REWARD

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Predictive analytics provides a tool that allows HR teams to not only calculate future retention rates, but also understand the factors that have the greatest impact on managing retention. When you consider the time and cost it takes to recruit and train new employees, as well as the impact that high attrition levels can have on staff productivity and morale, it’s easy to see why so many companies would like to understand what motivates and similarly de- motivates their workforce.

This was certainly the case for a major UK organisation that asked Altius to analyse its internal data in order to understand the factors that had affected staff turnover in the past, so that it could reduce attrition levels. The analysis demonstrated core areas of the business where retention was a problem and the most likely causes driving attrition. These insights provided an opportunity to develop statistically based HR initiatives that have proven to increase retention and staff morale.

One of HR’s greatest challenges is in the area of workforce efficiency and helping to improve productivity to generate much needed business outcomes. Imagine building a model that shows how the behaviours of top performing team members differ from other team members, and then being able place this information at the heart of a development and performance management programmes. That’s exactly what we achieved for our client, a global business that sells over 200 brands around the world.

Our client wanted to improve the efficiency of its sales team. By integrating and analysing data from various sources including daily reports, journey patterns and stock data, we delivered powerful insights that enabled the organisation’s HR team to change its business practices and improve its sales team’s efficiency by a considerable margin.

RETENTIONWORKFORCE EFFICIENCY

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Thought Leadership Paper 2017

HOW DATA INSIGHT ADDS VALUE TO HRWhilst there’s been a huge upsurge in the percentage of HR executives who rate data-driven decision making as a key priority, there are still a large number who are unclear how to use it effectively and how best to approach an analytics project.

Where do you start? Many HR executives go wrong with predictive analytics projects because they focus on solving departmental HR problems. If a project is driven from an HR need or curiosity, it will deliver benefits, but will have a minimal impact on the business and its bottom line. A predictive analytics project should not just be about improving HR processes and functions, it should focus on driving the entire organisation’s workforce strategy.

“The key to a successful

predictive analytics

project is therefore to

garner full executive

team ownership in order

to prioritise strategic

business requirements.”

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HR Directors therefore need to collaborate with other business units and customer-facing functions to understand how they can leverage data and analytics to create operational value. It is an incredible opportunity for HR to reinforce or develop strategic business partnerships with finance, operations and all business units in order to deliver much needed and game changing outcomes.

The key to a successful predictive analytics project is therefore to garner full executive team ownership in order to prioritise strategic business requirements. Multiple sources of HR data can then be combined in order to obtain a single source of business truth and powerful insight that drives informed decision-making across the organisation.

Securing IT resources to develop the technical tools required to obtain, manage, analyse and present useful data is a major challenge for most HR departments, which are rarely given the same priority as sales, marketing and operations teams. Whilst admittedly there are global organisations currently developing their

own analytical solutions and recruiting teams of in-house analysts, for the majority of businesses, lack of in-house resource and skill is perceived to be a major obstacle in getting started.

The good news is, organisations without the required in-house resource can still take advantage of the incredible power of predictive analytics. Data science and analytics is a rapidly maturing market, and securing the services of an external consultancy that specialises in predictive analytics and has the expertise and tools to help clients make meaningful use of their data, is a very viable option. Buying-in analytics offerings and tapping into expert knowledge will ensure your analytics solution delivers real business value and return on investment.

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Thought Leadership Paper 2017

CONCLUSIONThe HR function is moving beyond reactive people reporting towards a pivotal proactive strategic business role. Organisations are increasingly looking to connect their people and business data as a single source of the truth, and are looking to HR to make data-driven business decisions, and to develop a workforce plan that supports strategic organisational goals.

The trend towards analytics-driven HR will continue to gather strength in 2017. With more business insight, comes business strength.

Are you ready to take advantage?

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© Copyright 2017 Altius Ltd.

+44 (0)1483 [email protected] @altiusbi www.altius.co.uk

ABOUT ALTIUSWith offices in the UK and Pune in India, Altius helps organisations to harness data and use it to understand, model and predict business performance. Combining our business knowledge with advanced technology and architecture skills, alongside project management and business change capabilities, Altius delivers real-time, reliable and actionable data-driven business insights direct to decision makers. Altius’s management intelligence and data analytics solutions are proven to drive improved end- user engagement, business efficiency and profitability. Its tailored information managed services extend beyond a traditional helpdesk offering, encompassing configuration and management of cloud infrastructure, through management of applications and critical business processes to the provision of fully outsources data services.

If you would like to discuss how Altius can help you extract value from your data to help improve business performance, please get in touch.