HR Analytics in Unifying Talent and Technology

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Executive Summary

People analytics holds the promise of both elevating the status of the HR profession in business transformation with technology enablement and serving as a source of competitive advantage for organizations by taking smart and timely decisions for human capital investments to differentiate against competing firms.

The Problem Leads to Opportunity

In today’s disruptive business environment, operating in intuition is no longer an option, HR analytics coupled with the technological vehicle is seen as a vital tool to optimize the talent internally and at the same time enable business transformation.

Analytics help to answer the following:
  • Supports Talent Management decisions basis data and evidence
  • Drives action based on provided information and insights.
  • Technology enables Analytics in automating, integrating, engaging and empowering the entire sub functions of HR from hiring to exits, giving a holistic talent management, breaking the Silos.
  • Reshapes the big 4 issues that matter to employees – Culture, Values, Leadership and Career.

When different metrics talk to each other, business and stakeholders are able to see the unseen part in unifying. This unseen unification, enabled by technology tools, help business to gain deeper insights, enabling timely mitigation strategies.

Some of the correlations in key functions of human resources are illustrated below:

1- Recruiting Effectiveness

Talent Acquisition dictates the future of the organization and has the maximum business impact among all the HR sub functions in terms of revenue generation and profitability. Common metrics like Time to Offer, Time to Join, Offer acceptance ratio do not address the key questions about the value and the quality of the people who are hired. Some following analytical trends helps HR to do the course corrections to improve the effectiveness in recruiting;

Data Relationship Insights and Benefits
Recruitment Funnel Effectiveness Uncovering the Recruitment Bottlenecks. Sourcing Channel of the Candidates, Assessment Stages / Levels, Funnel Leakages (Drop Outs)
Diversity of Applicants Ensuring Equality and Equity across the recruitment funnel
Quality of Hire Correlating work culture, values and benefits in prior organizations for quick acclimatization in the new organization. Where does the best hire come from?
Speed to Fill Positions Make the early Attrition rate to talk to the speed of the hired talent, would indicate the poor organizational culture fit and quality.
Recruiter Performance and Efficiency Recruiter bandwidth analysis will help in identifying trends and tweak process to improve the velocity of the hire

2- Performance and Measurement

High performers are required for the organization to run their present business and they make a big difference to the average performers in terms of productivity. To truly understand the characteristics and have a ‘performing’ performance management. Organizations should move away from looking at Performance Appraisal Completion Rate, Normalization, and Average Ratings etc. to analytical approach as illustrated below:

Data Relationship Insight and Benefits
Characteristics of Prevailing Talent Existing Tenure, Managers Span of Control, Managers Stability ratio, Managers Performances, Managerial Connection and engagement with team, Pedigree / Experience and classification. These indicates how can the future top talent can be leveraged.
Career Progression Clear Job Profiling and Employee Profiling, Employee promotion rates, lateral exposures within, promotion wait times, internal hiring’s for new positions / jobs within the organization, indicates the opportunity that exists within the organization to retain talent and maximize productivity.
Pay for Performance Strategy Top Performers expect top rewards. Correlating their Compa-Ratio to Internal and the external market enhances their morale.

3- Talent Leadership Index

The Organization thrives on the Leaders and their management directions. Workforce Analytics helps in determining the accountability of leadership:

  • There is a direct correlation with the Total Leadership and Management impact Index, on the Revenue, Costs, Profits and ROI for the Organization; The Managerial Bench Strength, TM Index as against the Total Management HC, coupled with the Managerial Span of Control positively drives the organization objectives

4- Talent Retention

Retention of key talent is a key objective for all organizations. ‘Turnover’, is a critical HR metric. However, this metric does little to support the strategic business plan. To achieve this, a most in-depth analysis is required.

  • Reducing Costs; Identify the cost savings of retention programs by analyzing the direct and indirect costs of turnover in relation to Pay-inequities, comp-ratio, absenteeism, learning & development, Productivity etc.
  • Resignation correlations; There are similarities in every resignation such as pay inequity, manager stability factor, Job engagement, pay increase, training interventions, performance ratings etc.
  • Flight Risk Analysis; Analysis of key characteristics of past exits and ring fence top talent from leaving.

5- Employee Movements

Organizations are made of structures and networks. However strong the structures are within the organization, its efficacy is less, compared to the networks within the organization whose efficacies are the maximum. Networks are the relationships and connections between people within the organization. The primary way in which this network element is created and perpetuated is through employee movements. The following illustrations provide a good understanding of the benefits of employee movements that impacts the organizations:

  • Internal and External Movements; Ensure that in critical departments, there is no erosion of talent.
  • Succession pipeline and Bench; Aligning the workforce planning to the succession plans
  • Career Paths; Uncover the lineage for leaders and see how the departments have evolved

6- Total Rewards

With Compensation being the single large expense for the organization, it is imperative that the Total Rewards program is competitive and aligned fully to the business objectives and goals. The compensation budget and strategy are defined centrally, but allocations and decisions are distributed across the organization. To ensure there is connection between the strategy and execution, the below analytical approach helps:

Data Relationship Insight and Benefits
Total Cost of Workforce Take the total cost of the workforce including the taxes, long term incentives, facilities, benefits, temporary labor costs etc. as against the revenue / profits generated for long term planning.
Gig Workforce Identify cost effective options by deploying flexible workforce to reduce expenses and speed up revenue creation. Would help in Overtime expenses, benefits programs, forecasted bonus outflows and so forth.
Total Direct Compensation Ascertaining the growth rate of the Total compensation costs and how it reflects the FTE count in the business. If the Avg In Vs Avg Out costs of the workforce are increasing, then the organization is inflating itself than its competitions which will impact profitability.

7- Learning and Development

Learning is a key engagement driver, helping in increasing productivity and improve the financial performances. But some tactical metrics like ‘Learner Satisfaction’ or ‘Learning Hours per FTE’ does little to improve efficiency of learning organization and their business impact. To monitor the same, the below may be considered:

  • Business Impacting Program; Compare if improvement of the productivity of certain units are correlated to better sales performances
  • Time to Proficiency; Analyzing how new employees are productive and gain proficiency in the new role and their impact on the business.
  • Compliance and Certifications; Ensuring interruptions are avoided because of non-compliances.

Summary: Analytics help businesses move from ‘Observations’ to ‘Interventions’ to remain competitive.

  • Designed around HR’s role as advisor to business
  • Partnership approach (Technology, Networking & Benchmarking)
  • Multi-organizational design – Slice & dice deep into a matrix structure
  • Extensive content can be built into the technology tool
  • Instant Usability

Author- Shruti Shrivastava, Head Total Rewards & HR Service Excellence at Kotak Life. She has over 13 years of professional experience in Human Resources, prior to Kodak Life; Shruti has worked for companies like GoAir, Atos, Sears Holding India, Piramal Glass and Bajaj Allianz. She is HR partner with key executives across the businesses to drive HR strategy and activities that foster growth, innovation and organizational effectiveness in an environment experiencing both significant external and internal organizational change. Established and implemented, short- and long-term corporate human capital plans, which include workforce planning, talent acquisition, employee relations, HR technology, performance measurement & rewards and succession management etc…

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