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Starting Your Journey to HR Analytics

July 13, 2016

About Drake International
At Drake, we understand that your employees are your most valuable asset and
your biggest competitive differentiator.

Drake International is a profit improvement company focused on enhancing the
productivity and performance of your human capital. Built on a culture of
measurable results and outperformance, Drake has evolved into an international
leader in the expanding field of Workforce Analytics and Planning.
At Drake, we recognise that each organisation is unique. Therefore, our extensive
suite of innovative Human Resource solutions enables us to customise our
services based on your particular staff requirements, organisational culture,
business objectives, and key value drivers.
We are proud of our global reach, experience and mission to help companies
outperform by improving their Productivity, Performance and Profit through
their People.
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Presenter Information
Moun Peterson, PhD
Director of Workforce Planning & Research
moun.peterson@hcminst.com
Moun Peterson has over a decade of experience working in Human Resources
specializing in workforce analytics and planning and organizational development.
In her current role at HCMI, Moun leads client engagements and product
development. She has helped many clients start workforce analytics and planning
initiatives and transition to a data driven decision model. Moun earned her
doctorate in Industrial Organizational Psychology while working in HR for Nokia and
Pfizer in areas of Training and Employee Engagement after earning her BA at UC
Berkeley in Cognitive Science.

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About Human Capital Management Institute
The Human Capital Management Institute (HCMI) was founded on the belief that
organizations can and must, find better ways of measuring their investments in human
capital. Our vision of the future is one in which human capital measurement and data is as
integral to business decision making as financial information is today.
- We Bring Financial Discipline, Standards and Rigor to the HR Function -

HCMI Background:

What We Do:

 Specialized in HR analysis and
measurement

 Measure the immeasurable in human
capital

 Deep expertise in Workforce Analytics
and Planning

 Transform workforce data into
business intelligence

 Board made up of CFOs and HR heads

 Provide support, tools and training so
HR can partner with Finance

SOLVE Workforce Intelligence Software ▪ Strategic Consulting ▪ Training
Best Practices ▪ Workforce Analytics and Planning ▪ Benchmarking
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HCMI Products and Services
Full-Service Workforce Analytics and Planning Provider

Training and Advisory Support
+

Integrated HR
Databases

HR Data Warehouse
Drill-down, standard reports
Scenario Analysis

Turnover,
Headcount, Hiring

Initial Reports &
Analysis

First Good
Metrics

Data Errors
Lost HR
Credibility

Data Gathering

HR Analytics
Mandate

COE Launches
Training
Courses

1st Analytics Study

Bus. Units
Reject
Analysis

Bus. Units
Demand
more

HR Analysis
Validated

HR Data Cleansed

historical data scrubbed

External
Benchmarking

Context for decisions

HR Standards
Established

HR data/systems
Assessed

HRIS system data

COE Formation

Training
• Workforce Analytics Training
• Workforce Planning Training
• Custom onsite training

Data
Driven Decision
Making!

Advanced
Analytic
Studies

Data Errors
Historical data
still bad
Analytics journey steps
Setbacks along the way
Journey path and goal

Analytics Center
of Excellence

Consulting Services
Specialize in



Workforce Analytics and Planning
Assessments
Data Integration Blueprint
Building a Business Case

Workforce Analytics and Planning
Roadmap, Assessment and Business Case
Data
Driven Decision
Making!

Advanced
Analytic
Studies

Integrated HR
Databases
HR Data Warehouse
Drill-down, standard reports
Scenario Analysis

Turnover,
Headcount, Hiring

Initial Reports &
Analysis

First Good
Metrics

Data Errors
Lost HR
Credibility

HR Analytics
Mandate

COE Launches
Training
Courses

1 st Analytics Study

Bus. Units
Reject
Analysis

Bus. Units
Demand
more

HR Analysis
Validated

HR Data Cleansed

historical data scrubbed

External
Benchmarking
Context for decisions

HR Standards
Established
HR data/systems
Assessed

HRIS system data

Data Gathering

Advanced Workforce Analytics
and Planning Consulting

COE Formation

Data Errors
Historical data
still bad
Analytics journey steps
Setbacks along the way
Journey path and goal

Advanced Technology Solutions
SOLVE Dashboards
• Measure Metrics that Matter
• Quantify Financial Impact of Talent

Talent Management Dashboards
Metrics, Training and Research

SOLVE Pro

Human Capital
Financial
Statements

Workforce
ROI Calculator

Workforce
Planning and
Career Path

Location
Optimization

• Advanced Workforce Analytics and Planning
• Predictive Modeling and Forecasting

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Agenda
1. Why Workforce Analytics now?
2. The Workforce Analytics Journey
3. How to get Started

4. Case Study

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Value Creation in Today’s Marketplace
Are we managing the right things or just managing what we know how to manage?

Tangible Asset/Value

Well Measured

Measures well established for
modern “Finance” as a Decision
Support Science

Easy to
Measure

Hard to
Measure

Intangible Capital Value
Market value driven by factors
Not on a balance sheet
“Intellectual or Human Capital*”

Not well Measured
Source: Ocean Tomo Research, Inc., 2011

• Human Capital = employee knowledge, training, productivity, experience, culture, leadership, development,
performance, creativity, etc.
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Challenge of Measuring Human Capital
1. Complexity of Workforce Data
 Employee/Full-Time-Equivalent (FTE)

Workforce
Planning
Success

 Jobs/Roles/Skills
 Time - Tenure

Advanced
Analytic
Insights

 Compensation ($ vs. Equity)

2. Lack of Standards
3. Frequency of Change
 Promotions, Transfers, Hires,
Terminations

Compensation
Span
Transfers
Benefits of Control
Turnover

Succession
Data

New Hire
Turnover

Training
Recruiting

 Time - Tenure

4. Lack of Analytic Skills

Employee Data

 Jobs/Roles/Skills

5. Measuring the Intangible
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Building a House for Data Driven Decisions
Workforce Planning
and Analytics
Predictive Workforce
Management
Tools

Excellence

Linked
Business and Workforce Strategy
(HR Value Creation & Workforce Optimization Model)

Policies &
Workforce Practices

Clean Data
+ Standards =
Reports & Measures

Demand
&
Supply

Critical
Roles
&
Skills

Cost
Predictive
Modeling Modeling

Awareness

Data
Root
Driven
Cause
Decisions Analysis

Metrics
to Recruit,
Train &
Retain

Measuring & Reporting
Measures + Metrics

Standards

Human Capital Analytics

Data Quality

• Strategic Plan data by unit
• Employee basic data
• Temp & contractor data

Benchmarks

Foundation

• Compensation data
• Recruiting data
• Geographic data

Talent Management
& Practices

Workforce Planning

Analytics &
Workforce Planning
Capabilities

One Foundation
for Analytics
& Planning

“2” PATHS,
“1” HOUSE

Reports
Classification Tools

• Performance mgmt data
• Employee career
path / succession data

• Job/Position data
• Turnover data
• Manager data

Analytic Framework Foundation to Roof
Excludes systems considerations

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The AACEE Evolution Model
Where is your company?
Awareness

Action

Competence

Effectiveness

1

2

3

4

Workforce
Analytics that
Quantify Impact

Excellence

5

Analytic Competencies

Advanced Metrics
+ ROI Analysis

Conduct Root
Cause Analysis
Analytic Center of
Excellence
Metrics & Benchmark
Standards
Measures that Align HR
and Business Strategy

Workforce Analytics Journey
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Example Human Capital Analytics Journey
Data
Driven Decision
Making!

Advanced
Analytic
Studies

Integrated HR
Databases
HR Data Warehouse
Drill-down, standard reports
Scenario Analysis

COE Launches
Training
Courses

1st Analytics Study

Bus. Units
Reject
Analysis

Bus. Units
Demand
more
HR Analysis
Validated

HR Data Cleansed
historical data scrubbed

Turnover,
Headcount, Hiring

Initial Reports &
Analysis

External
Benchmarking

First Good
Metrics

Context for decisions

Data Errors
Lost HR
Credibility

Data Errors
Historical data
still bad

HR data/systems
Assessed

HRIS system data

Data Gathering

HR Standards
Established

HR Analytics
Mandate

COE Formation

© Human Capital Management Institute

Analytics journey steps
Setbacks along the way
Journey path and goal

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Different Ways to Start Analytics
1. Driven by Crisis, Change, or Need
• A major company crisis occurs, mergers,
acquisitions, and/or reorganization
2. Data Driven

What data is currently available

3. Pilot program

Select a test group

4. Strategically Driven

Align workforce strategies with business
strategies
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Driven by Crisis, Change, or Need
A major company crisis occurs, mergers, acquisitions,
reorganizations, relocation, product recalls, new laws, etc.
- Critical workforce decisions need to be made
- Supported by an executive
- A number of unknown variables
- Use different scenarios
Important Considerations:
- Time sensitive
- High data quality
- Use ranges whenever possible
- Need expertise
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Example: Driven by Crisis, Change, or Need
An Acquisition…
1.

2.
3.
4.
5.

Identify Critical Workforce Questions:
• What is the total cost of workforce for the current company,
the newly acquired company, and the new entity?
• Where are workforce redundancies? Where would it make
the most sense to reorganize without loosing productivity?
Know the parameters that you’re working with: time line,
available resources, available data, etc.
Create at least 3 scenarios: Best Case, Most Likely Case, and
Worse Case
Include financials and make sure your data is of high quality
• Anything that you’re unsure about, give it a best guess and
use range of numbers
Bring in outside expertise if it’s not available in-house, especially
if working with a short timeline or you’re unsure about how to go
about the previous steps.
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Data Driven
What data is currently available?
- How many systems?
- How regularly is it updated?
- What’s the quality level?

Complex Index Metrics
Index Metrics
Combined Source Metrics
Advanced Metrics
Insightful Metrics
Calculated Metrics

Simple Metrics
Important Considerations:
- Relevancy of the metrics
- Start with KPI’s
- Easy & quick wins with limited resources
- If in doubt start with Recruiting or Compensation
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Example: Data Driven
1. Assess all workforce related data systems:
• HR, Finance, Performance, Engagement
Surveys, etc.
• How often are they updated, the quality of
the data, and fields
2. Identify some key metrics
• 25 Key Human Capital Questions
• Human Capital Metrics Handbook
3. Calculate the key metrics with actual or proxy
data
4. Add insight notes
5. Try to automate the calculation of the key
metrics
6. Adjust as needed
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Pilot Program
Start with a Test Group
- Test groups can be departments, product lines, or
critical roles (e.g., IT, engineers, nurses, etc.)
- Needs to answer a compelling question
- A good way to start small and expand as the program
becomes successful

Important Considerations:
- A possible solution to resources limitations
- Helps to build a business case
- Internal and external marketing is a necessity
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Example: Pilot Program

1. Select either a high or low performing group that has
a critical role to business performance or mission
2. Identify a compelling question or concern
3. Calculate metrics to answer the questions or confirm
the story
4. Use benchmarks
5. Create a compelling story

6. Spread the word
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Strategically Driven
Align workforce strategies with business strategies
- When the workforce transitions from just being a cost
to an asset
- Precise workforce decisions are made based on
business strategies
Important Considerations:
- This is the most challenging approach, but has a higher
long term success rate
- Financials are essentials
- Industry benchmarks will add value
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Example: Strategically Driven
Considering outsourcing or relocating a division…

1. What is the reason for this consideration?
• Cost, difficulty in filling roles, high turnover,
challenging training, etc.
2. What questions need to be answered and variables
should be included in the analysis?
3. Identify and measure current state and Identify
desired state
4. Do an in-dept analysis of all variables and metrics in
#2, include external market data and financials, bring
in outside expertise if needed
5. Make recommendations on actions needed to achieve
the desired state
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25 Key Human Capital Questions
 Questions answerable with Human Capital Financial Statements
 1* Can we accurately forecast our workforce needs in the future?
 2 What percent of our workforce is customer-facing or revenuegenerating? What is the trend?
 3 Can we model our workforce to optimize cost, profit and
productivity?
 4 What is our workforce productivity? Is it higher than peers?
 5 What is the marginal return of one dollar invested in
workforce?
6

Is the ROI on Human Capital higher than other investments?

 7 Is workforce productivity increasing, decreasing or static?
How are we performing versus peers?
 8* What is the average time-to-full-productivity for new hires?
For new hires in critical roles?
 9* What are predictive indicators of turnover? What percentage
of employees are at risk?
 10 Are leaders effectively managing human capital? Do leaders
correlate to employee engagement, retention and performance?
 11* What business areas/positions/managers have the highest
voluntary turnover? How do we compare to peers?
 12* Where does our best talent come from? Which managers are
the best talent scouts and coaches?
 13 What is the cost of turnover to our business?
* Requires additional data elements at manager and job level

 14 Are we losing the right people(low performers) or the
wrong people(high performers or critical roles/skills)?
 15* Do we know the leading drivers of employee turnover? Do
we know the leading drivers of retention?
 16 What is our quality of new hires? Can we measure it?
 17 What recruiting source yields the most high performers?
What recruiting source yields the best cultural fits?
 18 Is there a link between employee performance and total
rewards? If so, do we know the optimal pay/performance mix?
 19 What is the total pay/rewards differential between high
performers and average employees?
 20* Could we offer compensation and benefits that both cost
less and engage/retain employees better?
 21 What is our Total Cost of Workforce as a percent of revenue?
As a percent of expenses? How do we compare to peers?
 22* What is the ROI of training to the firm? Where could
training investments improve productivity and profitability?
 23 Is internal mobility a source of value or turnover and cost?
What percent of the workforce moves internally each year?
 24 What percent of the workforce has a defined career path?
 25* What is the link between employee engagement, customer
satisfaction, revenue and profits? What are the drivers?

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Key Ideas

1. Workforce Analytics is relevant NOW

2. Workforce Analytics doesn’t always
have a linear path

3. There are different ways to get started
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Contact Information:
Michael King
National Director – Solutions & Data Analytics
mking@na.drakeintl.com
www.drakeint.com

Moun Peterson
Director of Workforce Planning & Research
Moun.Peterson@hcminst.com
www.hcminst.com
info@hcminst.com
HCMI Training Schedule:
Workforce Planning – Register

August 24 – 25, 2016

Denver, CO

Workforce Analytics – Register
Workforce Analytics – Register

October 25 – 26, 2016
February 8-9, 2017

Dallas, TX
Pasadena, CA

Workforce Intelligence Software

Workforce Intelligence
Consortium Group
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@HCMI
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