HR Analytics - A Pathway to Business Impact

HR Analytics – A Pathway
to Business Impact
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to Business Impact
Speaker: Charles Goretsky
Principal Consultant
Bersin & Associates

Moderator: Kellye Whitney
Managing Editor
Talent Management magazine

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Kellye Whitney
Managing Editor
Talent Management magazine

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Copyright © 2012 Bersin & Associates. All rights reserved. Page 6

to Business Impact

Charles Goretsky
Bersin & Associates

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HR Analytics – A Pathway to Business
Impact

Charles Goretsky Sponsored by:

September 18, 2012

Copyright © 2012 Bersin & Associates. All rights reserved. Copyright © 2012 Bersin & Associates. All rights reserved. Page 8

Bersin WhatWorks® Membership Program

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Strategy Development, Executive Alignment, Benchmarking,
Systems Selection and Roadmap, Measurement Strategy and Programs


Topics
The importance and impact of quality HR measurement
on talent and business outcomes
How analytics helps address critical talent challenges
organizations face today
How to evolve and mature your analytics capability
How current technologies can be readily leveraged to
build an analytics capability that enhances both the
prioritization and outcome achievement of your human
capital initiatives.


Analytics is a Well-Known Discipline
Businesses Measure What Matters

Finance & Logistics Customer & Marketing Talent & Leadership

Integrated ERP Predictive
and Financial Predictive
Customer
The Waves of Analytics Talent Models
Behavior
Business
Analytics Integrated Supply Web Behavior Business-driven
Chain Analytics Talent analytics

1980s Customer Integrated TM
Financial and Segmentation and Workforce
Budget Analytics Shopping Basket Planning
Logistics and Customer Recruiting, Learning,
Supply Chain Analytics – CRM Performance
Analytics (Data Warehouse) Measurement

The Industrial The Financial The Customer The Talent
Economy Economy Economy and Web Economy
Steel, Oil, Railroads Conglomerates, Financials, Customer segmentation, Globalization,
Engineering Personalized products Demographics, Leadership
and Skills Shortages

Early 1900’s 1950’s- 60’s 1970’s-80’s Today


HR Organizations are Not Ready
What percentage of HR
organizations believe they
have strong skills in data
analysis and interpretation?

6% rate themselves “High”
56% - “Poor”
Bersin & Associates
High-Impact HR Organization® 2011 and 2010, n=741 organizations


The Lowest Rated HR Skill
Relative Strengths of HR Skills and Capabilities
Attracting and selecting the right talent 17%

Promoting health and wellness 15%

Onboarding new talent 7%

Fairly allocating compensation 6%

Understanding skills needed by role 4%

Encouraging innovation and collaboration 1%

Creating a high-performance culture -4%

Enabling a learning organization -5%
Measurement and analytics
Identifying and developing future leaders -6% are the lowest-rated
capabilities for HR teams
Driving internal mobility -11%
today
Developing workforce analytics for management -12%

Measuring HR program effectiveness -18%
Bersin & Associates
High-Impact HR Organization® 2011 and 2010, n=741 organizations


Impact on HR
HR Best Practices HR Framework Area HR Impact

1. Implement Governance & Planning * HR Strategy & Business Planning 39%
2. Invest in Quality Workforce Planning HR Service Models 28%
3. Create the “Right” HR Philosophy HR Strategy & Business Planning 27%
4. Reduce HR BP Administrative Work HR Service Models 25%
5. Create a Flexible HR Org Structure Organization & Governance 20%
6. Improve Key Audience Facing Tools Technology and Infrastructure 19%

7. Measure Workforce & HR Ops * Measurement 19%
8. Develop Internal HR Skills * Governance & Organization 13%

9. Outsource Strategically Service Models 10%

10. Improve Line Manager Capabilities * Audience & Stakeholders 10%

Source Bersin & Associates HIHR Survey N=720
HR Impact =‘s Opportunity for improved efficiency, effectiveness,
•Negative impact if not implemented
and business alignment well


HR Business Partners Activities
# 1 Differentiator of HIHR organizations over 15,000 employees

What does the HR Business Partner role do?

Providing Decision Support 66%
37%
Employee Relations 48%
45%
Workforce Strategy 28%
20%
Manager Inquiries 28%
41%
Coaching executives & Managers 22%
16%
Employe Inquiries 21%
18%
HR Program Training 10%
19%
Data Gathering & Reporting 7%
12%
Performance Management 3%
15%
3% High Impact HR All Others
Orientation 5%


Poll:
What does your organization measure
today?
Process Efficiencies
CPH, TTF, HR headcount/ee, Learning $/ee

Process Effectiveness
% Satisfied with class, 70/20/10 %’s

Talent Outcomes
% HiPo’s promoted, % Ready-now successors, speed-to-productivity

Integrated Talent/Business
Coached leader revenue increase, # sales staff needed to open
Shanghai office


Talent Processes vs. Talent Outcomes:
How to Communicate, Prioritize, Execute and Measure

Talent Processes Talent Outcomes
Succession Management, Leadership Leadership Pipeline
Development
Two-deep+ all key roles*

Career Development, Internal Job Talent Mobility
Postings, Learning & Development 70% hi-po’s with cross-BU/functional
assignments/experience*

Employee Engagement, Performance Critical Talent Pools
Management, Learning & Development Segments identified; High Performer
retention rate, % with high quality
development plans

Talent Planning, Learning &
Skill Gaps Identified, being
Development, Competency
Management closed
65% critical skill Partners with necessary
competency levels*
* Sample goal


Decision Support:
Focus on Solving Business Problems

Why is turnover high in some areas?
What drives sales productivity?
Why is their fraud in some branches?
What sales or service processes drive account renewal?
What is the training of hiring profile we need to drive
greater revenue per customer?
How do we assess the “right” candidates for sales?
What will our talent gaps be next year based on
retirement rates?


Cases in Point:
Driving Business Value & Impact with Analytics

Major Retailer developed integrated “people model” to correlate
relationship between engagement, rewards, leadership capabilities,
tenure, skills and revenue

Major Insurance Company statistically validated 30+ factors in
recruiting which led to 20%+ improvement in sales performance and
completely revamped recruiting process

Major Food Service Company identified key drivers of account
renewal and upgrade and developed statistically valid measures which
have been used to create company-wide dashboard which measures
risk on a weekly basis

Major Retail Bank correlated dozens of workforce measures against
engagement and branch financials to develop risk management
dashboard for small and large branches


THE EVOLUTION OF AN
ANALYTICS CAPABILITY


Progression of HR/TM Measurement
Business Metrics &
Develop a TM Measurement Integrated Analytics
Strategy TM Metrics

Employee
Engagement
Basic Workforce Performance
Metrics Movement HR & Talent Metrics
analyzed against
Performance Talent business metrics
Ratings Mobility
Basic HR Metrics Competency Drives business
Pipelines
Gaps decisions &
Budget Enterprise supports forecasts
Recruiting Career Paths
Hiring
Turnover Learning Plans Talent Plans

Employee Employee Workforce
Satisfaction Diversity Plans

Measure Workforce Metrics & HR Operations : Bersin’s HIHR, 2010


HR Measurement Framework
Dashboards and Scorecards

HR and L&D Organizational Talent Supply Manager and Scenarios
Effectiveness Readiness Workforce Planning Employee Dashboards & Future Planning

Business Translation & Analysis

People Performance & Business Outcomes

External HR Benchmarks
Internal HR Measures

Talent and Leadership

Workforce Engagement & Wellness

Workforce Demographics

HR Program and COE Process

Technology Systems – Data Warehouses, Reporting and Analytic Tools

Workforce Planning Applicant Tracking | Performance & Learning Compensation
System Recruiting System Talent System Management System System(s) Third party
data
HRMS’s – Employee Demographic and System of Record Data


Build an Analytics Function
Not a set of tools

Measurement as a Measurement as an
Project Process
“Build a
dashboard that
“Go out and
continuously
measure &
20% correlates
analyze the
retention with
reasons for Analysis engagement,
turnover of my
competency
sales people”
80% scores and other
measures”
Analysis

80% Data Capture 20% Data Capture


Analytics – a Journey


Keys to Success

Transparency of business and workforce information

Analytics as a journey, not an end

Develop culture of data-driven decision-making

Empower line leaders, not just HR and L&D

Myth: Build an HR Data Warehouse

Reality: Deliver Actionable Business Information


Poll:
What are the barriers to quality HR
measurement and analytics in
your organization?

Systems
Process
Staff Skills
Management Support
Other


SYSTEMS CAPABILITIES


Weakness in HR Systems Solutions
How would you rate your LMS’s ability to obtain the information you
need to measure training programs?
3% Excellent 17% Good 63% Fair or Poor

How would you rate your Talent Management System’s ability to
deliver the talent measures you need?


How would you rate your HRIS system’s ability to deliver the
measures you need?


Deliver Tools that Make a Difference

Percentage of improved HR effectiveness based on tool investments

Web Social Networking Recruiting 19.6%
Manager Dashboard 19.6%
Knowledge Sharing 18.6%
Succession Management 17.3%
Performance Management 14.5%
Aplicant Tracking 14.4%
Compensation 13.9%
Eployee Self Service 13.7%
Manager Self Service 13.6%
HRMS 13.2%
Learning Management 11.8%


Systems Support the Reduction of Tactical Workloads

Positive
10.0% Impact on HR
Negative
8.0%
Impact on HR
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0%
Data Workforce
Employee Decision
Manager Gathering Strategy & Coaching
Relations Support Sr.
Inquiries & Mobility Executives
Resolution Managers
Reporting Planning
Efficiency -4.0% -2.0% -2.7% 3.0% 3.1% 5.7%
Effectiveness 1.3% -2.5% -1.0% 5.4% 6.8% 8.2%
Business alingment -4.0% -1.0% -4.1% 1.0% 2.7% 4.3%

Best Practice 4: Reduce HR BP Administrative Work


Progression of Measurement Technology
HCMS with
integrated TMS,
analytic packages,
intuitive user
interface
Data Warehouses,
auto-loaded data
from different
HRIS generates
systems, “cubes” ‘10’s
via Crystal Reports,
Business Objects,

PC’s, Excel;
SAS, SPSS ‘00’s
data transferred
manually from files
or records to Excel ‘90’s
Employee files,
hand-written We’re in a new era – one that requires
new information, integrated data
record keeping
‘80’s
and leverages new technologies and
data sources
‘70’s


TALENT MANAGEMENT SCORECARD (Q2 2011)
1 Diversity Representation
2 Pipeline Readiness
3 Manager Effectiveness Index
(As of 6/17/2011) (2010 Succession Planning: VPs and Above)
100% 100% VPs/Equivalent by Title 2.7
90%
80% 80%
70% TBS-Non-Minority SVP and above 2.7
60% 60%
50% 40%
40%
30% TBS-Minority 20% Mgr/Equiv by Title 3.0
20%
10% 0%
0% Ready Ready in Ready in Ready in Ready in Ready in Too New Dirs/Equivalent by Title 3.2
DiversityInc-
Minority Now 6 12 18 2 years 3 years To Rate
months months months or N/A 0.0 1.0 2.0 3.0 4.0 5.0
DiversityInc-Non-
Minority
Too New To Rate Under‐Performing Well‐Placed Average of EE Engagement, Perf. Ratings,
Promos Out of Hierarchy, and Num. of
Percentages may not add to 100% Growth Potential Highly Promotable
due to rounding Terminations

4 Gender/Ethnicity Representation in LDPs 5 Executive Leadership Development
6 1st Qtr 2011 - Training Expense per FTE
(YTD 2011)
Outcomes
100% 100% 200
90%
(YTD 2011)
90%
80% 150
80% New
Promotion
51% 70% Position
70% 66% 20% 100
60% 4%
60% Suspensio 50
50%
50% 40% n
1% 1% 0
40% 30% 8%
30% 20% No
49% 18%
20% 10% Change Job Title
0% 6% 74%
10% Change
0% 1%
ASIAN BLACK HISPA
Female Male PACIF WHITE Dollars per FTE ASTD/Bersin Benchmark

7 1. Disparity in minority population amongst leadership; non-managers and other positions split approximately
50/50
2. On average, over half of VP+ talent assessed during 2010’s Succession Planning process are ready to
assume a new role within the next 12 months
3. Manager effectiveness: SVP & above below current 3.0 average- most likely due to rating scale difference
(VPs and above receive either a 1, 2, or 3 numeric rating value whereas ratings for Directors and below can
include a decimal value)
4. Males/females represented almost equally in leadership development programs, however, non-minorities
still represent more than half of 2011 YTD participants
5. The majority of leadership development program participants experienced no change in job role after
participating in one or more programs
6. Turner overall has spent less on training per employee during Q1 as compared to the ASTD/Bersin
combined average benchmark (average $81.94/employee across Turner vs. $147/employee)
7. Turner is currently spending .02% of its YTD profit on learning & development; the ASTD benchmark is
approximately .4% of quarterly profits


Poll:
Are you currently using a talent
management technology vendor
for HR Analytics?

Yes
No
Not Sure


Critical Analytics & Technology
Questions
Is it easy to understand and implement?
Does it deliver reliable and credible information?
Does it deliver actionable information?
Is it inexpensive to operate and maintain?
Is it flexible to implement and change over time?
Is it relevant to your organization’s specific strategies?
What do organizations do with their HCM Metrics?
How are metrics integrated into HR & Business scorecards?
Who makes use of the HC metrics in the organization?
To whom are HR metrics reported?


Thank You!
Questions or Comments?

email : charles.goretsky@bersin.com
: charles goretsky

For more information about our WhatWorks® Membership, contact us today at info@bersin.com

Copyright © 2012 Bersin & Associates. All rights reserved. Copyright © 2012 Bersin & Associates. All rights reserved. Page 35

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HR Analytics - A Pathway to Business Impact

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