Using analytics to make smart HR decisions

Rusty Lindquist Mykkah Herner VP Strategic HR Insights Head of Professional Services BambooHR PayScale Of the emerging capabilities of todays HR leaders, the first is “data- and analytics-based decision making —Ion Hewitt Evolution of HR H Strategic Business Value Operational L Micro Small Mid Large Transactional HR High-Impact HR HR viewed as a cost center HR as a strategic investment People Analytics Companies that build capabilities in people analytics outperform their peers in quality of hire, retention, and leadership capabilities, and are generally higher ranked in their employment brand -Bersin, by Deloitte Human Capital Trends, 2015 Competency Gap Three in four surveyed companies (75 percent) believe that using people analytics is “important,” but just percent believe their organization is “strong” in this area -Bersin, by Deloitte Human Capital Trends, 2015 Competency Gap Too few organizations are actively implementing people analytics capabilities to address complex business and talent needs Among all the challenges we studied this year, people analytics presented the second-biggest overall capability gap for organizations -Bersin, by Deloitte Human Capital Trends, 2015 80% of HR professionals score themselves low in their ability to analyze -Bersin Value Perception Crisis It’s time to blow up HR and build something new Rethinking HR Why we love to hate HR What will it take to fix HR It’s time to split HR HR faces a crisis of credibility in the boardroom HR is our “favorite corporate punching bag” Steps to a Smart Compensation Plan What are our potential risks? What’s the real concern? o Where are we open to law suits? o We have a report due on our compliance with EEO What’s the response? o Share info on disparate pay/potential risk areas o Provide assurance that there are no risk issues Proof o Disparate pay report, divided by EEO classes bamboohr.com payscale.com Are What thereare anyour potential risks? potential risks? Disparate PayPay and Disparate andReports Reports byby EEOEEO Steps to a Smart Compensation Plan Disparate Pay Gender-based Report bamboohr.com payscale.com Steps to a Smart Compensation Plan Any Turnover Issues? What’s the real concern? o We’ve had a lot of folks who have been here a while leave! Is that ok? o We’ve had some critical positions turnover, is that ok? What’s the response? o Get to the reasons behind the turnover Not all turnover is bad o Share the physical costs of turnover Proof o Turnover calculation bamboohr.com payscale.com Any turnover issues? Any Turnover Issues? Calculating the Cost ofofTurnover Calculating the cost turnover Steps to a Smart Compensation Plan Monetary o Costs due to leaving o Recruitment o Training o Low Productivity Costs o New Hire o Lost sales / opportunity costs Morale o Bad turnover vs good turnover Typical Projections o Line Staff = 150% of annual salary o Managerial staff = 200-250% of annual salary Additional Resource: http://www.isquare.com/turnover.cfm bamboohr.com payscale.com Examples of Recruitment Examples of Recruitment Measures Measures Steps to a Smart Compensation Plan • Average Time to Hire X days • How often employees negotiate their offer? X% of offers negotiated • Number of non-accepted offers due to compensation • Win Rate vs Competitors # of head-to-head wins vs competitors The idea is that recruitment should improve in relation to the comp program’s success bamboohr.com 40 payscale.com Examples of Retention Examples of Retention Measures Measures Steps to a Smart Compensation Plan • Flight Risk - # flight risk EE • 90 Day Turnover Rate = # Separations in the Quarter Avg # EE in the Quarter X 100 • Good Turnover vs Bad Turnover Low performer Avg Performer High Performer Voluntary X% Y% Z% Involuntary P% D% Q% The idea is that retention should improve in relation to the comp program’s success bamboohr.com 41 payscale.com Steps to a Smart Compensation Plan the rate at which people leave a place, company, etc., and are replaced by others bamboohr.com payscale.com www.payscale.com Examples of Budgetary Impact Examples of Budgetary Measures Measures Steps to a Smart Compensation Plan • Compensation as a % of Revenue or Total Compensation as a % of Revenue The idea is that comp $ don’t have to increase to spend comp better • Gut check on over/under payment vs Actual (Range & Market) relative to performance The intent is to show that gut checks aren’t always accurate – value in doing comp studies bamboohr.com 43 payscale.com Examples of Engagement Examples of Engagement Measures Measures Steps to a Smart Compensation Plan • Engagement Survey Scores • Absenteeism – Average # of unplanned absences by employee • Exit Interview Responses re: compensation bamboohr.com 44 payscale.com eNPS (Employee Net Promoter Score) “On a scale of to 10, how likely are you to recommend this company as a place to work?” 10 Promoters Passives Detractors eNPS = Promoters (%) – Detractors (%) General Guidelines • • • • • • • Start small (the journey of a thousand miles) Pick something meaningful and get started Align your efforts with your business strategy Build (or hire) competency in your team Partner with IT Focus on ROI Leverage technology Companies that excel in talent and HR analytics can be positioned to outcompete and outperform their peers in the coming years —Bersin Who are our key partners? What key activities our value propositions require? What value we deliver to the customer? Our distribution channels? Which one of our customer’s problems are we helping to solve? Who are our key suppliers? Which key resources are we acquiring from partners? Which key activities partners perform? Customer relationships? Revenue Streams? What bundles of products and services are we offering to each Customer Segment? What type of relationship does each of our Customer Segments expect us to establish /maintain with them? For whom are we creating value? Who are our most important customers? Which ones have we established? How are they integrated with the rest of our business model? Which customer needs are we satisfying? What Key Resources our Value Propositions require? Through which Channels our Customer Segments want to be reached? Our Distribution Channels? How are we reaching them now? Customer Relationships? Revenue Streams? How are our Channels integrated, and which ones work best, or are most costefficient? How are we integrating them with customer routines? What are the most important costs inherent in our business model? For what value are our customers really willing to pay? For what they currently pay? Which Key Resources are most expensive? How are they currently paying? (How would they prefer to pay?) Which Key Activities are most expensive? How we report on this “revenue” to the rest of the organization? Thank you! Follow BambooHR and PayScale on social media: bamboohr.com/blog | payscale.com/compensation-today Questions? BambooHR Receive a free job posting on our ATS and full HRIS for one week We will contact everyone within the next few days to set this up PayScale Download our free eBook: Communicating Compensation: Your guide to tackling tough conversations about pay ... 80% of HR professionals score themselves low in their ability to analyze -Bersin Value Perception Crisis It’s time to blow up HR and build something new Rethinking HR Why we love to hate HR What... Hewitt Evolution of HR H Strategic Business Value Operational L Micro Small Mid Large Transactional HR High-Impact HR HR viewed as a cost center HR as a strategic investment People Analytics Companies... Rethinking HR Why we love to hate HR What will it take to fix HR It’s time to split HR HR faces a crisis of credibility in the boardroom HR is our “favorite corporate punching bag” It’s more than