People Analytics in the Era of Big Data

Changing the Way You Attract, Acquire, Develop, and Retain Talent

Jean Paul Isson, Jesse S. Harriott

• Publisher: Wiley
• Year: 2016
• ISBN:
  9781119233169
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Apply predictive analytics throughout all stages of workforce management

People Analytics in the Era of Big Data provides a blueprint for leveraging your talent pool through the use of data analytics. Written by the Global Vice President of Business Intelligence and Predictive Analytics at Monster Worldwide, this book is packed full of actionable insights to help you source, recruit, acquire, engage, retain, promote, and manage the exceptional talent your organization needs. With a unique approach that applies analytics to every stage of the hiring process and the entire workforce planning and management cycle, this informative guide provides the key perspective that brings analytics into HR in a truly useful way.

You're already inundated with disparate employee data, so why not mine that data for insights that add value to your organization and strengthen your workforce? This book presents a practical framework for real-world talent analytics, backed by groundbreaking examples of workforce analytics in action across the U.S., Canada, Europe, Asia, and Australia.

• Leverage predictive analytics throughout the hiring process
• Utilize analytics techniques for more effective workforce management
• Learn how people analytics benefits organizations of all sizes in various industries
• Integrate analytics into HR practices seamlessly and thoroughly

Corporate executives need fact-based insights into what will happen with their talent. Who should you hire? Who should you promote? Who are the top or bottom performers, and why? Who is at risk to quit, and why? Analytics can provide these answers, and give you insights based on quantifiable data instead of gut feeling and subjective assessment. People Analytics in the Era of Big Data is the essential guide to optimizing your workforce with the tools already at your disposal.

CHAPTER 1
The People Analytics Age

War is 90 percent information.

—Napoleon Bonaparte

Organizations are in a worldwide war—a war to acquire a diminishing resource, an asset that is more valuable than oil and more critical than capital. The resource can be bought but not owned. It is found in every country but is difficult to extract. Leaders know that without this resource they are doomed to mediocrity, yet most of them use outdated methods to measure and understand it.

The resource is skilled workers. In the United States alone, employers spend more than $400 billion a year locating, securing, and holding on to them.¹ Internationally, companies large and small devote a similarly significant amount of money (as well as staff and executive time) to bringing in skilled workers and keeping them happy. Just one part of the process, help wanted advertising, costs employers almost $20 billion per year.² Whether they’re called employees, talent, human capital, or personnel, these are the people with the skills, work habits, knowledge, experience, and personal qualities that drive your organization to meet its goals. Top talent is rare by definition—the ones you want on your team whether you are on a hiring binge or managing layoffs.

Top personnel create the best new products, make the most revenue, and find the greatest efficiencies. They build great workplaces, delight customers, and attract others like themselves to join the organization. They adapt to changing business conditions. Finding, managing, and holding that top talent is the key to your future.

It takes a ton of work to maintain top talent in your workforce. The underlying dynamics of locating, hiring, and retaining all employees—especially the best ones—call for a continuous give-and-take between employer and employee, and analytics is a must for understanding those dynamics unique to your organization. Your talent strategy, and People Analytics, must go beyond your current workforce to include people at every stage of the employment cycle. It includes understanding potential employees who work elsewhere, candidates (those who might work for you), current employees, and former employees (alumni, including retirees who have left employment altogether). If talent mattered less in the modern economy, the quest to find it would be less urgent. Today, it’s the only long-term path to greater profits.

THE PEOPLE ANALYTICS ADVANTAGE

If you are reading this book, we assume you see the importance, as we do, of using People Analytics to positively impact your organization. You may be a human resources (HR) business leader who wants to learn more about how companies use data effectively. You may be an analytics manager who wants to understand pitfalls to avoid that can lead to failure when undertaking People Analytics. You may be motivated to learn some of the latest techniques and best practices of how to use different types of people-related information across the enterprise. You may be an analytical professional and want to learn how to take your organization’s People Analytics to the next level. You may be an HR leader who wants to learn about data across the enterprise so you can decide how best to use it to make strategic human capital decisions. Whatever your motivation for reading this book, we assume your organization has business challenges that you hope data and the practice of People Analytics will help you overcome.

In 2015, Deloitte’s Global Human Capital consulting group conducted a global survey among more than 3,300 HR and business leaders in 106 countries. It’s a great resource and one of the largest global studies of talent, leadership, and HR challenges. The findings revealed many challenges facing human capital, not the least of which are related to People Analytics. For example, the number of HR and business leaders who cited engagement as being “very important” approximately doubled from 26 percent the previous year to 50 percent in 2015. Sixty percent of HR and business leaders surveyed said they do not have an adequate program to measure and improve engagement, indicating a lack of preparedness for addressing this issue. Only 12 percent of HR and business leaders have a program in place to define and build a strong culture, while only 7 percent rated themselves as excellent at measuring, driving, and improving engagement and retention.³

According to Deloitte, organizations are also missing the growth opportunities presented by analytics. The Deloitte report revealed that analytics is one of the areas where organizations face a significant capability gap. Seventy-five percent of respondents cited talent analytics as an important issue, but just 8 percent believe their organization is “strong” in this area—almost exactly the same as in 2014.

“HR and people analytics has the potential to transform the way we hire, develop, and manage our people,” said Jason Geller, principal at Deloitte Consulting LLP and national managing director of the company’s U.S. human capital practice. “Leading organizations are already using talent analytics to understand what motivates employees and what makes them stay or leave. These insights help drive increased returns from talent investments, with huge consequences for the business as a whole.”⁴

It is gradually becoming clear that in today’s cutthroat business climate where the employee is gaining power, failing to leverage People Analytics effectively in your organization can mean the difference between thriving and slow death.

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Interview with Jeanne Harris, Global Managing Director of Information Technology Research, Accenture Institute for High Performance

JP Isson had a chance to interview Jeanne Harris, the coauthor with Tom Davenport of the well-known book Competing on Analytics (Harvard Business Review Press, 2007), as well as the October 2010 Harvard Business Review article “Talent Analytics.”

Isson: How will analytics change the HR world in the future?

Harris: In some ways, the book Moneyball [by Michael Lewis (W. W. Norton, 2004)] is really about analytics for talent management and its net impact. And that is really a good way to show people the potential analytics holds for every industry. Ironically, most companies leverage analytics in certain aspects of their business; however, HR tends to be the one they wait to look at later in the process. It just seems to me we need to be getting started earlier. But the important thing to keep in mind is this is not a one-size-fits-all situation, and all answers will vary depending on the business.

The impact of analytics will depend on your business model: If your strategy is customer intimacy, you're going to focus initially on your customers' analytics. For example, if your business is in retail, you will find that it's equally important that your employees focus on those customers, too. By setting up and managing your customer analytics, you will be able to develop insights on customer relationships and determine the best strategies for improvement.

However, these strategies will vary if you are an investment banker. Instead of your primary focus being on creating a tight relationship with your customer, you might instead want to better understand how you can quickly identify, manage, reward, and motivate your employees who do the best job of investing money—in other words, how you best manage your star performers.

Isson: Do you believe HR is ready to embrace People Analytics?

Harris: Companies that I have talked with about People Analytics tend to be in the very early stages of implementation. Sometimes, they themselves are not clear on what information they want to collect and how they will leverage it. This is an important issue we need to address.

Many times, HR leaders have the sense that so much of what they have to do is reporting for regulatory or legal purposes, and they want to become more of a strategic partner with the business by managing and developing the right talent needed to drive the organization forward. While they may know analytics is the vehicle for accomplishing this, oftentimes they are not exactly sure how to do so.

I think that in many organizations, there is the perception that the most interesting issues are not addressed by HR, but instead they occur in other parts of the business. This is an interesting wrinkle: As an HR professional, you don't want to try to lift away from the business, but you want to add value. It is all about striking the right balance between HR and the business. I think this really is the core issue most executives struggle with sometimes.

Isson: How can companies leverage HR analytics or People Analytics?

Harris: One of the ways HR teams are starting to get involved in analytics is through applying the customer life cycle management (CLCM) model to their own employees. This is an idea that goes back to a Competing on Analytics case study, where a company (at the time, Nextel), had used CLCM to study their own employees from the time they heard about Nextel to the time they resigned. It's about marketing and tracking your internal resources as much as you do your external ones.

Developing a model that enables you to track your candidates and new hires from the first time they hear about your company through the employee life cycle will help you keep your fingers on the proverbial pulse of your talent and enable you to better manage your retention activities. For instance, if a hiring manager has an employee who says he or she is leaving, that manager can look at the expected lifetime value of that specific employee before deciding whether or not to make a counter offer.

Companies will be successful if they manage their HR teams the same as they manage their sales or marketing teams. They can leverage the HR team as a strategic department that can provide cost-containment insights and help them best manage their overall employee life cycle, much in the same way they do ...