HRANALYTICS

What gets measured, gets

managed; Whatgets managed
gets executed”
--PeterDrucker
 What is HR
Analytics?
• Human resource analytics
• Area that deals with people analysis by
applying analytical process to human
capital within organization
• Improves employee performance +
improving employee retention
• Aim is to provide better insight to human
resource processes, gathering related data

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 Need of HR analytics & reporting

 Many organizations have high quality HR data (residing with a multitude of systems, such as the
HRMS, performance management, learning, compensation, survey, etc.) but still struggle to use it
effectively to predict workforce trends, minimize risks and maximize returns.
 The costs of attrition, poor hiring, sub-optimal compensation, keeping below par employees, bad
training & learning strategies are just too high
 Data-driven insights to make decisions are always better than judgmental (subjective) HR practices in
terms of
 how to recruit
 whom to hire
 how to onboard and train employees
 how they keep employees informed and engaged through their tenure with the organization

Hence regular tracking and prediction of crucial HR metrics is indispensable

 OBJECTIVES
Predict attrition especially amongst high performers.
Forecast the right fitment for aspiring employee
Predict how compensation values will pan out.
Establish linkages between Employee engagement score
and C-Sat scores(Work in progress)
 BENEFITS OF HR ANALYTICS

• Improves the hiring process

• Reduces attrition
• Improves employee experience
• Make your workforce productive
• Improve your talent processes
• Gain employee trust
 WHAT SHOULD/COULD BE MEASURED?
• Overall Workforce Productivity
• Employee Engagement
• Recruiting
• Manager Satisfaction
• Retention and Turnover
• Overall Monetary impact of HR on your business
TYPES OF HR ANALYTICS

1. Employee Churn Rate

2. Absence Rate
3. Training Effectiveness & Efficiency
4. Revenue
5. Employee Engagement
 HR ANALYTICS AND METRICS

• HR METRICS are measurements used to determine the effectiveness

and efficiency of HR policies
• Metrics helps to compare different data points:
For example, if turnover was 5% last year and now 7.5%, it has increased
by 50%. The former are data points, the latter is the metric.
• Metrics don’t say anything about a cause they just measure the
difference between numbers
• HR ANALYTICS , also called as people analytics is the
quantification of people drivers on business outcomes.
• Analytics measures why something is happening and what is
the impact of what’s happening
Metrics vs Analytics
In traditional HR view

vs

Metrics on The people side

HR’s processes of business
& outcome
transactions
Metrics vs Analytics
In traditional HR view

vs

Metrics on The people side

HR’s processes of business
& outcome
transactions
Moving from metrics to analytics
Metrics Analytics
• What is my headcount? • What are the key characteristics
of top performers?

• How many people did we hire? • What are our best recruiting
sources for top performers?

• How many people resigned? • Who of our top performers is at

risk of leaving?
Analytics is a way to generate insights from data and
metrics
Analytics tracks the effects of metrics on business
performance

TRE
 1. EFFICIENCY METRICS
• They show how efficient HR is in its work.
• Examples include cost of training, cost of hiring, number of applications etc.

2. EFFECTIVENESS METRICS
• Tell us how HR is performing its role.
• Outcomes include employee retention, employee engagement,
employee performance etc.

3. IMPACT METRICS
• Business impact of everything HR is doing
• Results that count and that influence the (long-term) viability of the
company

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 HR ANALYTICS TRENDS
-2020
• AI and automation in hiring
• Virtual onboarding and training
• Performance management
• Predictive reports

12
Organizations Using HR Analytics
Trendwise Analytics – HR analytics capabilities
Three levels of HR analytics and reporting

• Reporting of basic metrics, their frequencies & percentages by

Level-1 various cuts followed by key highlights. These can be
Descriptive monthly, quarterly, half yearly tracking reports
• Tool: SAS/REPORT
analysis
• Techniques: frequencies , means, percentages etc.,

Level-2 • Derivation of some HR operational metrics which will help us in tracking the
efficiency of HR functions
Operational • Tool: SAS
metrics • Techniques: means, variance, control limits, ratios, percentages etc.,

• Predictive analysis based on historical HR data. Attrition forecasting,

Level-3 performance management, compensation analysis, survey analytics, new
hire strategies etc.,
Predictive • Tool: SAS BASE, SAS E-miner, Excel
analysis • Techniques: Regression analysis, Time series analysis, cluster analysis, CHAID
etc.,
HR Reporting and Analytics: Level-1
HR Dashboards & Descriptive analysis – Basic frequencies & percentages of some HR related variables
 Head count and Attrition numbers by Region ,Country, Business, Process, Service centers, Grade of service ,Age

,Gender , Ethnicity, Tenure and Special segment (e.g. Ratings/Talents)

 Training and learning dashboards, Program Enrollment / Registration & Completion
 Performance tracking reports , Absences ,Event Grievances / Disciplinary Actions Employee Appraisal / Review /

Accomplishments
 Requisition tracking, Vacancy / skills matching / competencies
 Payroll related reports, Injury illness, Time and labor

All the above reports will generated using SAS procedures like PROC FREQ, UNIVARAITE, MEANS etc.,. Automation of all these
reports using SAS/REPORT to generate monthly dashboards in desired format
 How to use Level-1 analysis?

Retirement

Shifting location

Company HR policies
Reports
Unsatisfactory
performance
Higher Education
2010 2010 2010 2010 2011 2011 2011
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Better Compensation

Involuntary Turnover Voluntary Turnover Voluntary Turnover Involuntary Turnover

 Turnover rates are above acceptable levels in last two quarters

Insights
 Compensation and location shift are two main reasons

Revise compensation strategies, time to concentrate on incentives and employee retention

Action points
strategies
 HR Reporting and Analytics: Level-2
HR metrics and ratios–HR operational metrics will help us tracking the efficiency of various functions in HR department. We can define
control limits to each of these metrics and track them on regular basis
 Turnover ratio
(Number of attritions in a year)/ (Average head count in a year)
 Joiners rate(Accession ratio)
(Number of joiners in a year)/ (Average head count in a year)
 Stability index
(Number of FTE with >3 years tenure in current organization)/ (Current head count)
 Low performer management
Denominator : Employees with low performance rating in last year Numerator: Distribution of above
employees across
Improved performance rating in current year Same performance rating in current year
Leavers in current year
 Promotion ratio
(Number of promotions in a period of time)/ (Average head count over same period)

How to use Level-2 analysis?

Metric Insights Action points

Joiners Rate: The ratio of new and A high number indicates hidden costs and Focus on new hire and employee retention
replacement hires as the percentage of total delays, which damage productivity strategies
employment
HR Reporting and Analytics: Level-3
 Availability historical HR data gives us lot of scope to analyze past patterns and predict future behaviors
 Attrition forecasting : Given historical attrition trends, we can estimate future attrition percentages up to a certain
confidence level
 Attrition Segmentation : Segmentation will be done based on employee profiles & attrition rates. Most impacting
employee characteristics on attrition will be identified
 Top performer segmentation: Segmentation of employees based on their profile data and performance indices. This will
help us to identify top performing employees and their characteristics
 Compensation Analysis and compensation tool: A tool that predicts optimal compensation for a given employee
based on his capabilities, company policies, market conditions.
 New hire strategies: New hire strategies will be build by performing attrition segmentation in combination with top
performer analysis
 Voice of employee analysis & drivers of employee satisfaction
 HR Reporting and Analytics: Level-3
Attrition forecasting

 Predicting/forecasting near future attrition numbers by identifying patterns in historical

attrition data

Attrition%
6.0%

4.8% 4.9%5.1%
4.5% 4.4% 4.6%
4.3% 4.3%
4.0% 4.1%
3.5%

2.5%
2.0%

0.0%
illustration
 HR Reporting and Analytics: Level-3
Attrition segmentation

Identifying segments with high/low attrition rates and employee characteristics in each segment

Tier-1  FTE Segment with

University/college( 35%)
highest Attrition %
Tenure with the
company <1.5
years(30%)
Other than tier-
1(28%)
Age Tenure with
company 1.5-3
<28(Attrition20%) years(20%)

Tenure with illustration

Over all Head count company >3
(Attrition 15%) years(10%)

Tenure with
company < 3
years(14%)
Age Tier-1
University/College( 10%)
>28(Attrition9%)
Tenure with
company >3
years(6%)
Other than tier-1 FTE Segment with least
college(5%) Attrition %
 HR Reporting and Analytics: Level-3
Top performer segmentation

Identifying High /Low performing employee segments and their characteristics (subjected to availability of necessary
performance measures)

Tier-1  FTE Segment with High % of

University/college( 55%)
top performers
Tenure with the
company >3
years(40%)
Other than tier-
1(25%)
Tenure with
Age <28(30% high
company 1.5-3
performers) years(30%)

Tenure with illustration

Over all FTE company < 1.5
population (20% high years(20%)
performers)
Tenure with
company > 3
years(22%)
Tier-1
Age >28(18% high
University/College( 18%)
performers)
Tenure with
company < 3
years(14%)
Other than tier-1 FTE Segment with least
college(10%) % top performers
 HR Reporting and Analytics: Level-3
Fair compensation tool
Approach
List main drivers of compensation, find the impact of each of these on compensation using
historical data, use these models and build a tool that predicts compensation
Project Description
Stage
Divide overall compensation into four major components; Company, Employee, Market
Stage-1 and general followed by identification of top drivers in each quadrant

Study historical data to find the relation between compensation and attributes in each
Stage-2 quadrant , using SAS
Use predictive analysis in SAS(multiple linear regression) to
Stage-3 quantify the relation between compensation and attributes
Using above models, build a fair compensation prediction tool
Stage-4 that covers all the relevant attributes from each quadrant
Use the results obtained from predictive analysis to estimate the optimal compensation
Stage-5 for a given employee
HR Reporting and Analytics: Level-3
Fair compensation tool & algorithm
gap between Maximum and
minimum salary
Divided into four
quadrants
based on weights
Identifying top attributes in each
quadrants
Company 30% Budget Assign weights to
each of these
Urgency components based
Employee 35%
Impact on statistical
analysis of
Market 25% historical data

Others 10%
Company component in
final compensation

Do the same excessive for four

Final Compensation quadrants
HR Reporting and Analytics: Level-3
Voice of employee survey analysis & drivers of satisfaction

 Driver Analysis (part-2): Merging of survey responders data with employee profile and
 Reporting: Descriptive statistics like overall satisfaction, satisfaction by various cuts(regions, processes etc.,)
 Driver Analysis (part-1): Identification of main drivers of employee satisfaction based on
survey data
 E.g: If we have five sub questions in survey, we try to identify the top two factors which are impacting overall employee
satisfaction. We find out these by using multivariate logistics regression
performance data. Identification of main drivers of satisfaction from non surveyed variables
 E.g ; We consider variables like employee tenure with the company, employee performance, skill sets & some other demographic variables to see weather one or
more of these are impacting on overall employee satisfaction

Analysis of verbatim comments:

 Descriptive analysis of positive , negative and neutral comments

 Identification of frequently mentioned topics and their positive negative frequencies

Talent Analytics Maturity Model®
Level 4: Predictive
4%
Analytics
Development of predictive models, scenario planning
Risk analysis and mitigation, integration with strategic
planning
Level 3:
10%
Advanced Analytics
Segmentation, statistical analysis, development of “people models”;
Analysis of dimensions to understand cause and delivery of actionable
solutions
Level 2: Proactive – Advanced Reporting
Operational reporting for benchmarking and decision making 30%
Multi-dimensional analysis and dashboards

Level 1: Reactive – Operational Reporting

Ad-Hoc Operational Reporting 56%
Reactive to business demands, data in isolation and difficult to analyze

Source: Bersin by Deloitte Talent Analytics Maturity Model®

Advancing Takes Effort
Level of Value

Level of Effort

Choke Point
for Most
Organizations

Level 1 Level 2 Level 3 Level 4

Operational Reporting Advanced Reporting Advanced Analytics Predictive Analytics

Source: http://www.slideshare.net/hrtecheurope/josh-bersin-datafication-of-hr
Talent Analytics - Examples
• Retention Analytics
• Recruiting Effectiveness
• Total Cost of Workforce
• Employee Movement
Talent Retention
• Retention ≠ Turnover
• Turnover alone is not sufficient
• Lots of reasons people turnover – some good / some bad
• Once someone has left it is hard to get them back
• One number tells you nothing about how to change the outcome
Common Retention Metrics
Common Metrics
• Turnover

Shortcomings
• Do not provide
insights on why
• Does not allow for
meaningful
preventive action
• Not all turnover is
bad!
Talent Retention Analytics
Turnover by performance by tenure
Turnover by performance by tenure
Turnover by performance by tenure
Turnover by performance by tenure
Analytics: Segmentation of Turnover by
performance by tenure
Focus on relevant & value driven issues
Gauge recruitment & onboarding effectiveness
Cost and disruption of new hire turnover
Shedding top performers, critical & vulnerable roles
Poor performer tenure and turnover
Delivering on Employment Brand
Recruiting Effectiveness
“Recruitment is the HR function that has the most positive impact on
revenue creation and profitability…”
Boston Consulting
Group

• Effective Hiring ≠ Time to hire

• Speed is highly dependent on the
market conditions effecting type of
talent
• Prioritizing speed over quality can
have
negative results
• Effectiveness is not a single
concept
• For example, hourly paid staff vs.
Common Recruiting Metrics
Common Metrics
• Time to fill
• Open Requisitions
• Cost to Hire
• Quota Attainment

Shortcomings
• Do not answer strategic questions about quality and value
• Do not provide insight into hiring connections to productivity
(revenue creation and profitability
Recruiting Analytics
Analytics applies powerful
visualization techniques to put
critical business answers in front
of decision makers – in an
intuitive way.
Total Cost of Workforce

“Total workforce costs average nearly 70% of a company’s operating

expenses.”
- Society for Human Resource
Management
Common Compensation Metrics
Common Metrics
• Salaries
• Total Direct
Compensation
• Market
Compensation
• Comparison
Ratio

Shortcomings
• Do not
support
Create a Cost Hierarchy:

Total Cost of Workforce

(TCoW)
Direct o Total Salaries
Compensation
o Total Benefits
 Direct
Compensation
Indirect
 Contingent Labor
Total Cost of
Compensatio n Costs
Workforce
(TCoW)
Deferred Build from the bottom
Compensatio n

Contingent
Labor Costs
Total Cost of Workforce Analytics
Total Cost of Workforce Understand the true cost of the workforce which allows
any changes to the workforce in support of the business
strategy to be measured. Provides a basis for
comparing workforce costs to the competition.

Workforce Cost Identify the direct, indirect, contingent, benefits, leave, equity, etc.
Segmentation costs associated with the workforce so that the various cost impacts
can be compared to determine where to focus to reduce costs,
invest to attract talent, etc.

Employment movement Understand how entries to and exits from an organization

impacts on compensation impact the total compensation expenses
Build costs into your plans
Employee Movement Analytics

Structure Network Organization

• Structure is the organizational hierarchy, distribution of work, and business units

• Network is the relationships and connections between people within the
organization
• No matter how correct your structure, if the network is missing your organization
will not perform at its best
Common Movement Metrics
Common Metrics
• Headcount / FTE
• Turnover
• Internal Moves
• External Hires

Shortcomings
• Do not provide insight into impact of employee
movement
• Do not correlate movement to other factors
Employee Movement Analytics
Analytic Value
Movement in and out of
organizational units
Build versus buy
Leadership and succession
modeling
1. Ensure the business units that make the most difference
to your business are increasing in talent quality, and not
experiencing “brain drain”
2. Track promotions, lateral moves, and the relative
performance of individuals to achieve better results at a
lower overall workforce cost – internal candidates often
perform better more quickly and stay longer than “stars”
who are parachuted in from outside
3. Tracking employee movement, promotions, and key
skills/experience provides insight into the organizational
pathways that have developed your top talent, and allow
you to identify other likely succession candidates –
research by Jac Fitz-Enz found a direct correlation
between better succession management and revenue
Thank You