This document discusses how HR can move from being perceived as "touchy-feely" to being driven by analytics. It outlines six levels of increasing analytics maturity for HR: 1) establishing basic HR metrics, 2) analyzing data to gain insights, 3) devising actionable strategies, 4) workforce forecasting, 5) developing predictive models, and 6) integrating HR analytics in real-time decision making. The document argues that becoming analytics-driven requires not just new tools but a cultural transformation to prioritize data-based decision making. It provides examples of companies that have benefited from various levels of HR analytics and urges readers to start measuring something and iterate continuously.
6. The Evil Director of Human Resources
2
Schools of Thought
“Human Resources has long been looked at
as a touchy-feely business. The stereotype
of its practitioners is that they give warm
and fuzzy answers to most business
queries.” – Jac Fitz-Enz, The ROI of Human Capital.
CATBERT
7. The Evil Director of Human Resources
2
Schools of Thought
“Human Resources has long been looked at
as a touchy-feely business. The stereotype
of its practitioners is that they give warm
and fuzzy answers to most business
queries.” – Jac Fitz-Enz, The ROI of Human Capital.
CATBERT
9. The Evil Director of Human Resources
Perception…
…Or Reality?
CATBERT
10. The Evil Director of Human Resources
Perception…
…Or Reality?
CATBERT
11. The Evil Director of Human Resources
[Contrary to Popular Belief (and Satire)]
CATBERT
12. The Evil Director of Human Resources
[Contrary to Popular Belief (and Satire)]
Life isn't that easy
CATBERT
13. The Evil Director of Human Resources
[Contrary to Popular Belief (and Satire)]
Life isn't that easy
…or random!
CATBERT
14. The Evil Director of Human Resources
Large Organizations:
Too many people (and data) to make objective decisions.
CATBERT
15. The Evil Director of Human Resources
Startups and SMEs:
Too much flexibility and personalization in place, difficult to
make universal policies.
CATBERT
Princess Complex!
19. The Evil Director of Human Resources
Employee Redundancy
Turnover ‘Right Sizing’
Morale
Organizational Memory
CATBERT
20. The Evil Director of Human Resources
As the economy shows signs of
recovery, employees may begin to consider
greener pastures.”
What happens if there’s a mass exodus of key
talent just as an organization is moving toward
recovery?
-Aon Hewitt Talent Management Report, 2011
CATBERT
21. The Evil Director of Human Resources
Also
CATBERT Nationalization Drives
22. The Evil Director of Human Resources
And
Brain Drain and Employee Turnover…
CATBERT
23. The Evil Director of Human Resources
With limited resources and harsh external
influences, HR takes actions based on gut
feelings, ‘soft skills’ and freshly baked policies.
Thus, perceived as Random Policy Generators
and/or EVIL!
CATBERT
26. Dogbert – THE Consultant
Wanna get rid of Catberts?
Make HR…
27. Dogbert – THE Consultant
Wanna get rid of Catberts?
Make HR…
Analytics Driven
28. Analytics
ˌa-nə-ˌli tiks
-
By analytics we mean the
extensive use of
data, statistical and
quantitative
analysis, explanatory and
predictive models, and fact-
based management to drive
decisions and actions.
29. A REVOLUTION DOES
NOT HAPPEN WHEN
SOCIETY ADOPTS NEW
TOOLS,
IT HAPPENS WHEN
SOCIETY ADOPTS NEW
BEHAVIORS
Clay Shirky, US Now
33. Don’t replace your tools, add new ones for specific problems, Analytics is one of the many tools.
36. No organization we’ve worked with has embraced an analytics-
only method of managing, motivating, and retaining employees.
But early adopters have created tangible value for themselves.
Tom Davenport, Competing on Talent Analytics
38. Employee Churn Prediction
Sprint has identified the
factors that best foretell
which employees will leave
after a relatively short time.
(Hint: Don’t expect a long tenure from someone
who hasn’t signed up for the retirement
program.)
39. Contracts Development
Professional sports
teams, with their outsize
expenditures on talent, have
been leading users of
analytics. To protect its
investments, the soccer
team AC Milan created its
own biomedical research
unit. Drawing on some
60,000 data points for each
player, the unit helps the
team gauge players’ health
and fitness and make
contract decisions.
41. Employee Engagement
Almost every company we’ve
studied says it values
employee engagement, but
some can precisely identify
the value of a 0.1% increase
in engagement among
employees at a particular
store. At Best Buy, for
example, that value is more
than $100,000 in the store’s
annual operating income.
42. Academic Records
Many companies favor job candidates with stellar
academic records from prestigious schools—but
AT&T and Google have established through
quantitative analysis that a demonstrated ability to
take initiative is a far better predictor of high
performance on the job.
45. Ketchum analyzed personal networks
to learn how easily information flowed
across teams.
Bloggers were more engaged and
satisfied than others and performed
about 10% better, on
average, Cognizant India
46. Bottom Line
There is nothing more powerful
for a business than ‘managing
tomorrow, today’ by properly
applying analytics to its human
capital
47. Is it Really an
Engineering
Problem?
The Engineer!
50. No, Not Really
Its Cultural……….
People usually measure what is easy for them to
measure, not what should be measured…
51. No, Not Really
Its Cultural……….
People usually measure what is easy for them to
measure, not what should be measured…
Create a Culture of Performance Measurement!
52. No, Not Really
Its Cultural……….
People usually measure what is easy for them to
measure, not what should be measured…
Create a Culture of Performance Measurement!
Then Improve your Framework
Maturity, Continuously!
54. “Forward-looking analytics that push well beyond
traditional metrics are the cornerstone of this
effort. But siloed systems, inconsistent data, and a
lack of benchmarks and tools have made this
increasingly difficult to achieve. To address this
problem and become more strategic, HR
professionals must get their arms around the
data, identify key performance indicators
(KPIs), settle on a technology approach, and infuse
the data into their organization.” - Forrester 2009
55. Example Framework
Six Uses of Talent Analytics
By Thomas Davenport
• Simple
• Value Driven
• Iterative
56. • Human Capital Facts
Analytics Maturity (& Complexity)
1
• Analytical HR
2
• Human Capital Investment Analysis
3
• Workforce Forecast
4
• Talent Vale Model
5
• Talent Supply Chain
6
58. • Human Capital Facts
1
Single Version of the Truth
Straightforward Facts
• Head Counts
• Contingent Labor Use
• Turnover Rate
• Termination Rate
• Average Cost Per Recruitment
• Engagement Rate etc
59. • Human Capital Facts
1
Single Version of the Truth
Straightforward Facts
• Head Counts
• Contingent Labor Use Pushing Factors:
• Turnover Rate • Creates Transparency
• Termination Rate • Determines Overall Measurement
• Average Cost Per Recruitment Criteria
• Engagement Rate etc • Employees and Corporate start aligning
their behaviors
Pulling Factors:
• Employees and Corporate start
‘Gaming’, i.e. show better scorecards
than behaviors
• Actions are not Deterministic.
• Requires Context to Devise Strategies.
61. • Analytical HR
2
Pinpoint Opportunities & Bottlenecks
Create Insights
• Determine whether Staff Turnover
intervention needs to be carried
out only in East Region or the
entire Organization.
• Determine which job description
need revamping of their contracts
to improve employee performance
• Determine the most common
reason for delays in the recruiting
process. etc
62. • Analytical HR
2
Pinpoint Opportunities & Bottlenecks
Create Insights
Pushing Factors:
• Determine whether Staff Turnover • Develop Insights
intervention needs to be carried • Drill Down and Roll Up
out only in East Region or the • Relate Individual data with Corporate
entire Organization. Processes and KPIs.
• Determine which job description • Cascade Performance
need revamping of their contracts • Put some context into Measurements.
to improve employee performance
• Determine the most common Pulling Factors:
reason for delays in the recruiting
process. etc • Usually Rear-view Mirror metrics
• Insights are still not Actionable.
• Gives too many alternatives to work
on, we need to focus on a defined
strategy
64. • Human Capital Investment Analysis
3
Devise Actionable Strategy
Determine Activities of Highest Impact
• Find correlation between different
factors, e.g. one company
identified employee satisfaction
highly correlated with unit
revenue, etc.
• Determine root-cause analysis to
understand dependent and
independent factors.
• Single out a selected few action
points to execute, the strategy
being that other factors will
eventually be improved as well.
65. • Human Capital Investment Analysis
3
Devise Actionable Strategy
Determine Activities of Highest Impact
• Find correlation between different Pushing Factors:
factors, e.g. one company • Focus on a scoped action plan
identified employee satisfaction
highly correlated with unit Pulling Factors:
revenue, etc. • Cannot determine risk on each action
• Determine root-cause analysis to point
understand dependent and • It’s a gamble
independent factors. • Need some predictive insights.
• Single out a selected few action
points to execute, the strategy
being that other factors will
eventually be improved as well.
67. • Workforce Forecast
4
Predict & Plan Outcomes
Forecast and Predict Possibilities
• From a Risk Management
perspectives, organizations need to
know how their future projections
of activities will be supported by
their staff availability and skill sets.
• Employee Churn Prediction (to
activate Retention Activities &
initiate preemptive recruiting to fill
future gaps)
• Scenario modeling to estimate
possible outcomes and conduct
planning.
68. • Workforce Forecast
4
Predict & Plan Outcomes
Forecast and Predict Possibilities
Pushing Factors:
• From a Risk Management • Predictive Insights
perspectives, organizations need to • Preemptive Planning
know how their future projections • Forecast Turnover, Conduct What-if
of activities will be supported by Scenarios for Succession Planning
their staff availability and skill sets. • Predict Potential Shortages or
Excesses of Key Capabilities
• Employee Churn Prediction (to
activate Retention Activities initiate Pulling Factors:
preemptive recruiting to fill future • Get an understanding on what might
gaps) happen, not the root cause of such
• Scenario modeling to estimate incidents.
possible outcomes and conduct • The question is Why will this
planning. happen, to have predictions
actionable.
70. • Talent Vale Model
5
Identify Causation
Develop Models for Reasoning
Calculate factors that imply the root
cause of employees staying at their
jobs, at performing well, at not
performing well indicating
misplacement or other reasons, etc.
By continuous trial and error, evolve
models of employee behavior to
conduct individualized performance
boosting activities.
Preemptive churn prevention by
creating environments of employee
well being.
71. • Talent Vale Model
5
Identify Causation
Develop Models for Reasoning
Pushing Factors:
Calculate factors that imply the root • Establish Causation.
cause of employees staying at their • Determine action plans for
jobs, at performing well, at not preemptive planning.
performing well indicating • Devise Personalized Incentives Model
• Determine Promotion Factors
misplacement or other reasons, etc.
• To Identify Root Cause of Low
Performing Employees and Devise
By continuous trial and error, evolve Plan to Improve their performance.
models of employee behavior to
conduct individualized performance Pulling Factors:
boosting activities. • Outcomes are not yet real
time, some actions are too late to
Preemptive churn prevention by have the desired impact.
creating environments of employee
well being.
73. • Talent Supply Chain
6
Becoming a Real Time Decision Engine
Tight Alignment with the Organization
• Just in Time
Manufacturing, Delivery, Servicing
requires at times a secondary
workforce to be used on order
spikes. This contingent workforce
needs to be processed and
engaged in real time considering
corporate risks to be covered, this
is done in real time to be practical.
• Resource planning is carried out in
real time allowing for all work
orders to be filled by employees.
74. • Talent Supply Chain
6
Becoming a Real Time Decision Engine
Tight Alignment with the Organization
Pushing Factors:
• HR becomes Strategic
• Timely Decisions
• Just in Time • Finely Grained Contracts and
Manufacturing, Delivery, Servicing Controls
requires at times a secondary • Daily Contingent Workforce leading
workforce to be used on order to optimal costing.
spikes. This contingent workforce • Resilience to uncertain environments
and sudden external events.
needs to be processed and
engaged in real time considering
Pulling Factors:
corporate risks to be covered, this • Hard to Achieve state
is done in real time to be practical. • Need to pass through the maturity
model to achieve this level.
• Resource planning is carried out in
real time allowing for all work
orders to be filled by employees.
76. Core HR systems strategies will focus on master
data, and that analytics will help HR become more
strategic.
Human Resource Management Report, Forrester Trends 2009
77. Thank You !
Atif Abdul-Rahman
www.knowledgeworks.wordpress.com
http://linkedin.com/in/atifabdulrahman
atifshaikh
78. References
• Competing on Talent Analytics – Tom Davenport et al
• http://hbr.org/2010/10/competing-on-talent-analytics/ar/1
• Employee Values = Shareholders Value – Lars Bjork
• http://blogs.hbr.org/cs/2011/10/employee_values_stakeholder_va.html
• Talent Analytics , Another BI research opportunity
• http://www.b-eye-network.com/view/15658
• HR Analytics becomes a MUST
http://www.forrester.com/rb/teleconference/hr_analytics_become_must/q/id/5327/t/1
• Trends 2009: Human Resource Management Report, Forrester
• The New HR Analytics: Predicting the Economic Value of Your Company's Human Capital
Investments by Jac Fitz-enz (Hardcover - May 26, 2010)
• The ROI of Human Capital: Measuring the Economic Value of Employee Performance by Jac
Fitz-enz (Hardcover - Feb 23, 2009)
• Competing on Analytics: The New Science of Winning by Thomas H. Davenport and Jeanne G.
Harris (Hardcover - Mar 6, 2007)
• The Five Dysfunctions of a Team: A Leadership Fable (J-B Lencioni Series) by Patrick Lencioni
(Hardcover - Apr 11, 2002)
• How to Measure Anything: Finding the Value of Intangibles in Business by Douglas W.
Hubbard (Hardcover - Apr 19, 2010)
• Pukh Theory – Farhad Karamally
80. Disclaimer
• All images are copyrights of their respective owners.
• All images from Dilbert are copyrights of Dilbert and
free content is used here for non-commercial use.
• All quotations and books mentioned are referenced in
slide 78.
Notas del editor
There is one in nearly every company, called the HR Manager/Director.
Reality is, many believe that HR Managers/Directors don’t have a clue of what the organizational human capital ought to do and is capable of doing. On a personal level, it is very difficult to behave objectively and yet make a strong one to one relationship with employees.
Reality is, many believe that HR Managers/Directors don’t have a clue of what the organizational human capital ought to do and is capable of doing. On a personal level, it is very difficult to behave objectively and yet make a strong one to one relationship with employees.
Reality is, many believe that HR Managers/Directors don’t have a clue of what the organizational human capital ought to do and is capable of doing. On a personal level, it is very difficult to behave objectively and yet make a strong one to one relationship with employees.