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]
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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?
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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
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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
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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
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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
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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
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Five Easy Steps
#1 Start with impact in mind
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Workforce Analytics: The Way We Currently Think
Collectdata
Choosemetrics
Reportmetrics
Analyzefindings
Assessimpact
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Start with the Business Impact
Business Impact
Almost everyone else
HR Platform Focus
WorkforceIntelligenceWorkforceIntelligence
WorkforceAnalytics
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Leverage Your Existing Metrics and Analytics
KEY POINT
The metrics and analytics are onlyas good as the question thatgenerated them
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Change Your Thinking: Workforce Intelligence
Collectdata
Determineimpact
Choosemetrics
Collectdata
Analyzefindings
Reportmetrics
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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.)
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Five Easy Steps
#2 Don’t silo your thinking
#1 Start with impact in mind
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BusinessImperatives
+People
Strategy
Desired Impact
Focus on Desired Impact forYOUR Organization
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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
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Five Easy Steps
#2 Don’t silo your thinking
#3 Avoid data smog
#1 Start with impact in mind
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Building a Relevant Data Engine
THE ENGINEAssemblea Relevant
Data Engine
BusinessImperatives
+People
Strategy
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Data Engine Defined
All Available Data
Data Relevant toBusiness Objective 2
Data Relevant toBusiness Objective 3
Data Relevant toBusiness Objective 1
All Data Relevant to CriticalWorkforce Questions =The Data Engine
KEY POINTAs the businessobjectives/questionschange, the relevantdata must also change.
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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
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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.
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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
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Five Easy Steps
#2 Don’t silo your thinking
#3 Avoid data smog
#1 Start with impact in mind
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#4 Beware of the shiny new toy
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Technology
It’s Not JUST About Technology
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• Technology and data integrity is onlyhalf of the solution
• Organizations should spend a leastthe same amount of timeconsidering changemanagement,communication andunderstanding insights
ConsultingConsulting
Technology
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Match Your Story to the Audience
DATA PEOPLE DIALOGUE PEOPLE
Good stories come from all levels of data
Copyright © Dr. Theresa M. Welbourne
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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
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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
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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
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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
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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…
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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
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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
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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]