Making Workforce Analytics Stick Pitfalls Challenges and StickandStay

  • Slides: 30
Download presentation
Making Workforce Analytics Stick: Pitfalls, Challenges, and Stick-and-Stay Strategies Regan Klein EPI-USE Principal Consultant,

Making Workforce Analytics Stick: Pitfalls, Challenges, and Stick-and-Stay Strategies Regan Klein EPI-USE Principal Consultant, Workforce Planning & Analytics

Agenda • Welcome & Introductions • The Business Case for Workforce Analytics • Common

Agenda • Welcome & Introductions • The Business Case for Workforce Analytics • Common Roadblocks, Challenges & Pitfalls • Making It Stick • Lessons Learned • Q&A 2

About EPI-USE • EPI-USE established in 1984, SAP Practice since 1994 • The EPI-USE

About EPI-USE • EPI-USE established in 1984, SAP Practice since 1994 • The EPI-USE Group is privately held and made up of a number of separately branded entities/organizations • Global, World-Class Services and Software Organization to large multinationals • Specialists in Human Capital Management Consulting • “Special Expertise Partner” for SAP HR and recently established as a Success Factors Global Partnership • Completed over 600 HCM projects and a team of Niche HCM Service Provider with SAP as the Core! 3

Some Of Our Clients 4

Some Of Our Clients 4

The Business Case For Workforce Analytics

The Business Case For Workforce Analytics

The Case for Workforce Analytics THE WORKFORCE MAKES UP 60 -80% “ “ OF

The Case for Workforce Analytics THE WORKFORCE MAKES UP 60 -80% “ “ OF YOUR OPERATING EXPENSES Are you making decisions about your people with the same rigor, logic and confidence as your decisions about money, customers, products and technology? DR. BOUDREAU, USC CENTER FOR EFFECTIVE ORGANIZATIONS Revenue per FTE Profit per FTE Employee Performance (Aberdeen, “Intelligent Human Capital Management”, 2010) 6

The Workforce Analytics Journey Data • Reactive Information • Focus on Accuracy • Basic

The Workforce Analytics Journey Data • Reactive Information • Focus on Accuracy • Basic List Reports LOW Impact Vision • Data Manipulation Capabilities • Report Automation • Scorecards and KPI Reporting Growing Sophistication Action • Proactive Insights • Analytically Drives Actions for Business Success • Data-Driven HR Function HIGH Impact 7

Data Empowers CFOS, CIOS AND SALES EXECS have credibility with CEOs because their views

Data Empowers CFOS, CIOS AND SALES EXECS have credibility with CEOs because their views and decisions are based on data. NEW HR LEADERS win executive authority with credible data, business cases, and ROI forecasts. “If you and your head of HR haven’t recently discussed ideas for using data to generate a talent strategy that’s more closely linked to business results, it’s time to start. 8

Roadblocks, Challenges, & Pitfalls

Roadblocks, Challenges, & Pitfalls

When All Else is Equal Technology enables, but does not create results. It’s how

When All Else is Equal Technology enables, but does not create results. It’s how you use it that matters. 10

Why The Adoption Problem? Cannot Be Lack of Data… Average number of human capital

Why The Adoption Problem? Cannot Be Lack of Data… Average number of human capital data points on Success. Factors member dashboards: 230 Metrics 112 Analysis Dimensions 68 Time Periods 3122 Org Units = 5. 5 Billion Data Points Q: Which ones matter and to whom? Q: Do you trust the data? Q: What’s really impacting your organization? 11

Common Year 1 Roadblocks Selecting KPIs aligned with strategy Must be aligned with HR

Common Year 1 Roadblocks Selecting KPIs aligned with strategy Must be aligned with HR or corporate strategy. If not, KPI’s unlikely to be valued by the business. Standard metrics definitions Data quality and credibility Without standard definitions for metrics, there is misunderstanding and inconsistency. Data discussions are more focused on source of inputs, formulas, and calculations rather than results. Both external (industry) and internally. Without reduces or invalidates the value of the results. Differences between systems (e. g. , Finance headcount vs. HRIS). Center of excellence Provides the foundation for consistent reporting and analytics. Delivers insights of strategic impact to the business. Generating actionable insight Just measuring and reporting data is not enough. Data needs to be communicated effectively to generate action. Provide solutions not problems. 12

Common Year 3 Challenges Turnover of key leader or analytics team member Lack of

Common Year 3 Challenges Turnover of key leader or analytics team member Lack of dedicated resources HR lacks analytics skills & culture Difficulty measuring business impact Workforce data not reaching executives 13

Making It Stick

Making It Stick

Best Practices for Making It Stick Executive Level Reporting Pilot Program Dollarize Alignment with

Best Practices for Making It Stick Executive Level Reporting Pilot Program Dollarize Alignment with Business Strategy Reporting Strategy Quick Wins Communication Plan 15

Strategic Alignment: Prioritize Workforce and Business Issues For Analysis A Top-Down Approach Corporate Strategy

Strategic Alignment: Prioritize Workforce and Business Issues For Analysis A Top-Down Approach Corporate Strategy Increase Market Share Requests for Data Analysis Functional Customer Acquisition Strategy Business Drivers A Bottom-Up Approach Customer Retention • Branding and advertising • Improve customer satisfaction • Improve employee satisfaction • Improve service delivery • Access new markets Request: Investigate company age profile Reason: Anticipated spike in retirements by 2015 Business Case: Increased costs Loss of knowledge Staffing shortages Summary: High Priority Request: Generate headcount reports for 5 largest business units Reason: Human Capital Metrics • Voluntary Termination Rate • Employee Retention Index • Managerial Quality Index • Training Hours/FTE Concern over discrepancies between HR and Finance headcounts Business Case: ? Summary: Low Priority 16

The “Right” Set Of Metrics for Executive Reporting Group #1: Core Workforce Facts: –

The “Right” Set Of Metrics for Executive Reporting Group #1: Core Workforce Facts: – – Headcount/FTE Terminations Diversity, by Gender and Ethnic Background Workforce Age Profile Group #2: Financial Workforce Metrics: – – Operating Revenue per FTE Operating Profit per FTE Return on Human Capital Investment Ratio Cost of Turnover Group #3: Productivity and Performance: – Workforce Productivity (Measured in outputs relevant to the specific firm) – Workforce Availability/Absenteeism – Executive Compensation/Pay Comparison Group #4: Talent Development and Succession: – Leadership Quality (Current and Bench) – Staffing Rate – High Performers – Staffing Rate – High Potentials Group #5: Human Capital Risk: – – – Succession Risk (Absence of Ready-Now Successors) Staffing Shortages in Critical Roles Current vs. Future Competency Gaps Churn (hires vs. terminations) Rates Knowledge & Transition Risk (of an aging workforce) 17

Key Learnings For Presenting and Packaging Executive Level Data 1. 2. 3. Regular Reporting

Key Learnings For Presenting and Packaging Executive Level Data 1. 2. 3. Regular Reporting is a Must • Data credibility • Rhythm • Standardization (Formulas, Definitions, etc. ) Balancing Breadth and Depth • Scorecards • KPIs • Clear linkage to business issue Combining Data and Analysis • Effective story-telling • Target-setting • Benchmarking • Recommended action 18

Money Talks: Quantify and Dollarize • Cost of Turnover = Average Salary x #

Money Talks: Quantify and Dollarize • Cost of Turnover = Average Salary x # of Exiting Employees • Building The Case (e. g. , Headcount Spend as a % of Revenue) • Calculators: COT, COH, ROI • Back Of The Envelope Calculations (e. g. , Average Salary of Employee in X Job Role x # of Hours Spent On X Project) • Training ROI = Productivity Gains – Productivity Losses • Multipliers (e. g. , High Performer Multiplier = 1. 5 x regular employees) 19

Reporting Strategy Annual Strategy Kick-Off • Analyze key outcomes from prior year • Communicate

Reporting Strategy Annual Strategy Kick-Off • Analyze key outcomes from prior year • Communicate strategic initiatives and plans for current year • Suggest metrics and data analysis used to measure success of each initiative • Present updated workforce plans Monthly HR Strategy Review • Present results and analysis of workforce KPIs • Identify emerging issues to investigate Quarterly Senior MGMT Meeting • Review human capital scorecard • Suggest themes and metrics for Board meeting and external communication • Provide overview of external labor market trends impacting current workforce 20

Build a Communication and Feedback Plan Format for Delivery (Presentations, email or portal) Timing

Build a Communication and Feedback Plan Format for Delivery (Presentations, email or portal) Timing (Quarterly, monthly or ad-hoc) Communication Planning Audience Message (HR, business lines or executives) (Content, rationale or preferred action) 21

Different Strokes for Different Folks Audience Communication Needs Their Concerns • Secure approval •

Different Strokes for Different Folks Audience Communication Needs Their Concerns • Secure approval • Obtain funding for new policies What is the ROI/cash flow impact of this data? • Redefine role in business • Enable strategic consulting What should be HR’s strategic priorities? • Gain broad support • Illustrate opportunities for “wins” Will this help me achieve my business goals? Executive Team HR Team Line Managers 22

Identify Quick Wins Analysis of your organization’s Strengths, Weaknesses, Opportunities, and Threats will help

Identify Quick Wins Analysis of your organization’s Strengths, Weaknesses, Opportunities, and Threats will help identify quick wins and prioritize resources towards problem areas. Strengths • Leadership support • End-user receptivity to data Weaknesses • HRBPs lack analytical skills • Poor quality data Top Priorities: Training & Data Quality Review Opportunities • No workforce plan exists • High-cost of call center t/o Complete Phase One Review by End of 2013 Threats • Cannot demonstrate ROI • Data analysts leave Include ROI in all Analyses; Build Pipeline Include in Mission Statement 23

Get Creative 2013 Research Agenda Pilot Program • In the last four years, has

Get Creative 2013 Research Agenda Pilot Program • In the last four years, has workforce productivity increased, decreased or remained the same? Step 1: Identify business leader or champion to partner with • How will increased retention affect our cost of turnover and cost of hiring over time? Step 2: Initial debrief session to identify top 1 -3 business challenges Step 3: Analytic investigation • What is the depth and quality of the successor pool for key positions? • What recruiting sources provide the highest performing employees? • Other strategically aligned questions for analytic investigation Step 4: Executive Briefing with key findings and recommended action Step 5: Action plan and ongoing monitoring Step 6: Communicate success 24

Lessons Learned

Lessons Learned

Critical Decision Points for Metric Success Data-Driven Momentum Supporting HR staff job roles are

Critical Decision Points for Metric Success Data-Driven Momentum Supporting HR staff job roles are redefined to incorporate data usage HR leaders use data as part of decisionmaking processes Data producers and consumers are identified and “trained” Stakeholders & champions are unsure of the program’s purpose Data utilization begins Data producers are supported with training and development opportunities Skeptics point to the lack of ROI metrics Data producers are bogged down by low-value data mining Quick wins are not capitalized upon Time 26

Answer Questions Important to the Business Human Capital Question Essential for Measuring… Example Related

Answer Questions Important to the Business Human Capital Question Essential for Measuring… Example Related Metrics What is our revenue and profit per employee? …the financial impact of workforce performance Operating Profit per FTE or Return on Human Investment Ratio What percentage of our employees are fully engaged and are “doing their best work” at all times? …employees’ emotional commitment to the firm Employee Engagement Index or Voluntary Turnover Rate What percentage of our workforce will retire in the next year or next five years? …the risk of staffing shortages Staff Rate: Approaching Retirement Eligibility What percentage of our workforce moves internally each year between lines of business or functional areas? …career-path effectiveness Career Path Ratio or Internal Mobility Rate What is our voluntary turnover rate among top performers and what is the cost to the business? …the bottom-line impact of losing “stars” Cost of Turnover or Quality of Hire Which recruiting sources provide the highest performing employees? …the ROI of talent acquisition Staff Rate: High Performers by Recruitment Source What is the percent increase in employee performance as a result of every one percent increase in pay? …the link between compensation and performance Performance Based Pay Differentials or Unscheduled Absence Rate 27

Key Takeaways Does Your Workforce Analytics Program Incorporate The Following? • 3 M’s: Measure,

Key Takeaways Does Your Workforce Analytics Program Incorporate The Following? • 3 M’s: Measure, Monitor, Manage • 3 R’s: Re-evaluate, Rebrand, Relaunch • Executive Level Reporting • Strategic Alignment: What are the Metrics that best answer the questions that drive the business? 28

Questions 29

Questions 29

Thank You! Regan Klein EPI-USE, Principal Consultant, Workforce Analytics & Planning Telephone: 310. 318.

Thank You! Regan Klein EPI-USE, Principal Consultant, Workforce Analytics & Planning Telephone: 310. 318. 2137 Email: Regan. Klein@us. epiuse. com Web: http: //www. epiuse. com 30