Navigating Political and Ethical Issues of Using Big … candidates who: Last Perform ... Hunters or...

Navigating Political and Ethical Issues of

Using Big Data in HR

Greta Roberts, CEO.Talent Analytics, Corp.

�Predicting candidate results since 2001

�Cloud Platform, Advisor™ predicts job candidates who:

�Last

�Perform

�And, are engaged in their roles

About Talent Analytics, Corp.

�Customers – will they buy?

� Insurance – will they get sick?

�Financial – will they pay their loan?

�Voter Analytics – will they vote for my candidate?

�Sports Analytics – will they win for my team?

Learn from Analytically Mature Human Domains

A Story AboutTelecom Sales

�1,900 Traveling Reps

�Door to door

�62% annual turnover rate

�Something must be done

Telecom Sales Reps

Reports and Dashboards

� Run annual turnover reports

� View data in HR dashboard

� Drill into turnover,by Region

� Regional Managers begin to get a little nervous

Reports and Dashboards to Understand Turnover

� Regional Managers pressure HR

� Is HR data correct?

� Compare turnover to industry benchmarks

�Source better candidates

�Better training / onboarding

�Better pay?

� No action

Political Pressure Begins

New Way of Looking at Turnover“Survival Curves”

Quarterly Bonus’

38% Survival, or

�Sales Reps leave right after quarterly bonus

�Raises policy questions

�Nobody knows what to do or wants to step forward

�Stop quarterly bonuses?

�No - will more leave?

�No action taken

What Survival Curves Tell Us

Sales Turnover Taskforce Formed

�Cross-Company Taskforce – More than HR

�HR / WF analytics, Finance, Sales, Training

�Data Required – More than HR

�HR data (Cost to hire, Termination data)

�Sales data (Sales Performance Data)

�Finance (Salaries / Commissions)

�Training (Length and Cost to Train)

Sales Turnover Task Force

�Fear of exposure

�Fear of accountability

�Fear of losing power

�Withhold data - why give someone ammunition against me?

�Pretend I have privacy concerns

Data Politics

Despite Pushback … Progress

�Single version of the truth:

�Costs the business $12,000 to replace a fully trained Telecom Sales Rep.

�Sales turnover $14 million annual cost

�Reps profitable only after 13 months – wow!

�Only 36% last until 13 months

Despite Pushback … Progress

Cost of Sales Rep. Turnover Delivered to C-Suite

�Control oriented response?

�Put GPSs on all the sales reps

�Fire their managers (is this ethical if it’s a structural problem?)

�Can predictive analytics approach help?

�C-Suite Mandate – Take Action Now

Response Needed Now

New Analytics ApproachDiscover “Sales DNA”

� Does current screening consistently identify good reps?

� Do you even know?

� Which Rep sells more /lasts longest:

� Hunters or Farmers

� Service or Solution sales

� How technical? Other?

� Can analytics provide some answers?

New Idea: “Sales DNA”What Kinds of Reps Succeed?

� Gather random assessment / survey sample of current Sales Team “DNA”

� Predictive techniques discover patterns between assessment factors (inputs), and

�How long they last in their job, and (outcome)

�Sales performance (outcome)

Rigorous Data Science Approach

� Should we include their universities, zip codes, etc. as inputs?

� It’s hard to “unsee” insights

� How about scraping social media data, or review their emails or chat streams?

� Where does your company draw the line?

Privacy / Ethical Issues

� “Let’s pilot this in the Northeast Region”

�Only 50 sales reps there

�Not large enough sample to be valid

�Go for a wider area

� “People are too unique to be predicted”

�Credit and Marketing are predicting human behavior effectively – what’s the difference

Concerns Bubble UpKeep Moving

� Analytics identifies reliable pattern between assessment results and Sales Rep turnover & performance

� Success over politics!

� Only possible by combining data from different department sources

� Cross Validated: Pattern holds up to rigorous data science process

� No regional differences

� Now what? How to use this model?

“Sales DNA” Model Found

Two Options for Action

� Lacks fiduciary responsibility to company and shareholders to do nothing

� Is it ethical to:

�Keep hiring Sales Reps into a role and dept. where they are very likely to fail?

�Or fire a Sales Manager when the problem is structural and lack of correct data analysis?

Do NothingIgnore “Sales DNA” Models

�Multiple applicants per open position

�Add “Sales DNA” Model into screening process

�Screens in / screens out candidates

�Large ROI potential

Use “Sales DNA” to ScreenCandidates

� Success: Models tell why they make choices, Recruiters and Managers don’t

� No more mystery factors – you know that your decisions actually predict performance, are job related

� Models get smarter over time - updated regularly based on real-life hiring experience (machine learning)

� Watch for disparate impact of model

�Consider “Stratified Sample”

Addressing Ethics

Best Approach:Rightsize Concerns

�Analytics systematically gathers facts from experience and helps you make unbiased decisions

�What are the ethics of ignoring the facts?

�Do politics make people ignore what is really going on?

Are Fact-Driven Decisions For You?

Why This is Important

� Huge ROI working through politics & ethics issues

� Sales Rep turnover begin: 62%

�1,178 reps a year with a $12,000 replacement cost

�$14.1 million annual turnover cost

� Sales Rep turnover 12 mos later: 50%

�950 reps a year = $11.4 million a year

�Prevent 228 terminations

�$2.7 million savings, year 1

Ultimately One Big Reason: ROI

� Every employee is hired to deliver value to their organization

� Analytics extends opportunities for value

� Politics, ethics and compliance issues can be a paralyzing excuse

� Many have already gone before you to figure it out

Conclusion

Questions…Comments

Greta Roberts

CEO, Co-Founder

Talent Analytics, Corp.

http://talentanalytics.com

greta@talentanalytics.com

@gretaroberts

617-864-7474 x101

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