How Analytics Helps Companies Improve Talent ROI
By Himanshu Tambe and Omesh Saraf
One company, faced with high attrition among its managers, was able to discover the root cause, address the issue and improve retention. Another successfully performed a diagnostic of its enterprise learning capabilities to determine which forms of training would have the greatest impact on performance. A third organization analyzed the best ways to improve customer satisfaction and workforce performance in its retail channel, and it was able to achieve double-digit growth in sales productivity.
How did these organizations do it? They accomplished it by using talent analytics—a precise, science-based analysis of employee and organizational performance and the ways a workforce helps to execute business strategy. This ability to process literally millions of data points can help executives make decisions—on workforce strategy, hiring, training, organizational change and more—based on objective data rather than hunches and intuition.
Here are several ways talent analytics is delivering a wide variety of business benefits to organizations.
Support Better, More Predictive Hiring
Analysts can look for patterns in HR data that can help companies improve areas related to hiring and attrition. Improving performance in specific areas of the employee life cycle can produce impressive financial results, considering that the cost of replacing a worker who leaves can be as high as 150 to 300 percent of the employee’s annual compensation.
Take the case of a communications company that set out to understand the drivers of employee absenteeism at its call centers. One hypothesis was that a major cause of absenteeism was the distance between an employee’s home and the center. Data analysis showed, instead, that a much more important factor was the employees’ family obligations, including caring for aging parents or young children. By pinpointing the right cause and not chasing the wrong answer, the company saved both time and money.
Find Workforce Insights Using Big Data
Big data analytics enables companies to run analyses of datasets as large as many exabytes and to see patterns and causality well beyond what the human brain can process on its own. The human resources department can begin with a hypothesis and see whether it is supported by the data. However, HR can also say: "Let’s see where the numbers are taking us and what differentiated value might be hidden in the numbers."
A life insurance company had been experiencing 100 percent turnover among managers at its affiliated agency locations. The company’s outsourcing provider was able to use analytics to determine the actual predictors of success in terms of performance and retention of these workers. Six months after the company changed its hiring profile, new-hire performance shot up by more than 100 percent and new-hire attrition went down by 50 percent.
Improve Success Rates of Change Programs
Analytics-based systems can help executives keep their companies on track during periods of significant organizational change, especially periods when multiple change programs must be managed and coordinated. Although it is well-known that the success rate of major change initiatives is low, most organizations persist in using older tools such as project management software and employee surveys.
Analytics technologies offer an alternative: a data-based, insight-driven approach that provides objective information about progress and uses predictive modeling to give executives insights they can use to steer the organization more effectively through a complex journey of change.
Lessons From Leaders
As companies continue on their talent analytics journey, here are a few important lessons they can learn from those that are further along.
· Don’t wait for “perfect” data. For most organizations, standardizing global HR systems to improve the data environment is a long-term challenge. But that’s no reason to wait to do talent analytics. It is possible to see useful results by doing some basic data cleanup and analysis.
· Begin with pilot projects. Start with some limited initiatives focused on the top two or three issues the organization is facing with its critical workforces. Identify these problem areas and begin a pilot to prove the value of the longer-term talent analytics program.
· Align with business strategy. Don’t think too small. Stay aligned with business strategy and consider how better insights from your talent data might help improve business performance.
· Don’t forget the people. It is a paradox, but in the rush to execute in new ways based on insights from talent analytics, it is possible to overlook real people. One of the findings from a retail workforce productivity project conducted for a telecommunications company was that several stores were significantly overstaffed while others were understaffed. From a pure analytics perspective, the answer might have seemed obvious: Move people from one store to another. In reality, however, such transfers would not take place successfully without taking into account the personal dimensions of change.
Workforce performance improvements and better decision making—driven by talent analytics—can be game-changers for companies looking for insights that can improve the performance of their entire enterprise. Both functional and line executives now have unique tools in place to deliver significant business impact, rather than just a few percentage points of savings or productivity improvements here and there.
Omesh Saraf, based in Bangalore, is a senior manager and the human capital analytics lead for the Accenture Management Consulting Capability Network.