People Analytics Success Stories
As human resources continues to move into the future and professionals take a serious look at their people, one thing is certain: the need for high performing talent is the greatest it’s ever been in the history of business. It’s for that reason leveraging data in human resources is paramount to success. Growth is linked to the data function and its existence across all dimensions of HR from talent acquisition to retention.
According to Deloitte’s Human Capital Trends report, 71% of companies see people analytics as a high priority, but only 9% believe they have a good understanding of which talent dimension drives performance in their companies.
Why is data so important?
“Organizations today realized that good HR practices are no longer enough as we need a more data driven approach which can lead to evidence based HR, thus reducing human bias and subjectivity. When HR is able to make impact through analytics, they take on a more strategic role and are able to help their organizations gain a competitive advantage through clever use of data,” Jaclyn Lee said. She’s the Chief Human Resources Officer for the Singapore University of Technology and Design.
“Analytics,” she continued, “also have a huge potential to increase return on investment when the numbers are tied to business outcomes and when predictions point to a range of possibilities that companies can plan for.”
So, how are companies driving growth with people analytics?
LinkedIn0 provides a fair share of resources to the HR professional, but it is also company in need of solutions. The social media platform for professionals has been faced with a great demand for its services, but not enough manpower to provide those services. At one point, the company was growing at 40% every year and the talent acquisition team was struggling to accurately forecast the number of hires needed to address the demands on the company.
That’s when they employed people analytics as part of their solution. In just one year, LinkedIn was able to predict hires within 5% of its actual hires. That translated into money saved for the social media giant. Also in that first year, the company saved 15% of its recruiting budget.
ISS and Employee Engagement
ISS1 has more than 510,000 employees across the globe, and the facilities company had a problem. Leaders wanted to know if it was possible to improve the customer experience and increase profits through higher employee engagement. To figure out a solution, ISS used people analytics to:
- Analyze the link strength between employee engagement, customer satisfaction and profitability
- Analyze data to identify HR processes that would have the biggest impact on improving employee engagement and customer experience, focusing on motivation, service quality, knowledge and responsiveness of service staff as key drivers.
In the process, ISS also found a strong link between high customer Net Promoter scores and contract profitability.
Once the company had its findings, it changed its training programs for supervisors and employees as well as onboarding programs.
One of the most common problems solved via the use of people analytics is attrition. Why? It’s relatively easy to create a business case and demonstrate ROI.
A solid example is provided by IBM2. The tech company employs a program called Proactive Retention. Through use of analytics, the company is able to predict which employees are likely to leave. It is also able to pinpoint the best way to retain employees. The program itself has helped the company save more than $270 million dollars since its inceptions.
Another example would be Nielsen3. With the use of people analytics, the company has been able to calculate that a single percentage point of attrition represents $5 million lost by the company. So, how did they mitigate that significant loss of money? The answer is lateral moves. The company looked at employees who had made lateral moves versus those that remained in the same position for a long period of time. The data indicated those that made lateral moves were 48% more likely to remain with the company than those who had made no moves.
As a result, the company put the focus on lateral moves and gained buy-in from the CEO. Before doing so, only about 4% of employees had made lateral moves at the company. Following that up, Nielsen created a program called Ready to Rotate. It empowers employees to self-advocate their desires to take on new challenges within the company. Within the first six months, the company saw a 160% increase in traffic to the Ready to Rotate website. The net result: they saw the voluntary attrition rate for Q1 decrease by nearly half for the same timeframe for the previous year.
Data and the analysis around it can be used for more than finding problems and preventing them. It can also be used to help encourage productivity and effectiveness at the employee and team levels. We’re talking about people centric analytics now.
A great example of this is technology company Cisco.
At one point in time, Cisco conducted annual employee engagement surveys. Some 73,000 employees respond. And it took time to analyze all of that data, share it and then implement action plans based on the findings. In recent years, the company decided to shift its focus from the company altogether down to the team level. This would allow them to get more useful feedback that could be turned into action almost immediately.
Cisco also conducts pulse surveys. The HR team then analyzes this data to measure team performance and leader interactions with their teams. This frequent analytical review provides leaders with data that links to key performance indicators, leading to paths of improved performance.
Roxanne Bisby Davis is the director of team analytics and research.
"We're not looking at it from the perspective of 'Who's performing badly?' Rather, we're looking at who's great to see what they're doing and how they're doing it, whether it's team members or leaders. By highlighting 'goodness,' it gives the teams opportunities to say, 'I really like that approach. Let's try it.'"
People analytics is not a substitute for strategy or critical thinking. It is, however, another tool in the HR professional’s tool box. With the right measurements in place, companies can use data to improve and grow the business on every level from talent acquisition to performance.
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