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Tips for Answering HR Questions with Analytics- When You’re Not a Ph.D. or Data Scientist!

People analytics has far reaching implications from uncovering trends and solving current organiza­tional problems to providing support for HR functions. We of course geek out over analytics and want to help you leverage the power so that you have data to justify your decisions, not just gut-feel (because your C-suite is probably asking you for proof, right?!). But, you may be one of the many who gets hives thinking about analytics. Don’t fear: we’ve broken analytics down for you with our “HR Analytics 101” primer, which you may view here. If you’re already up-to-speed on the what but need to understand the how, we have a few tips for you to consider below.

  1. Choose Wisely: When thinking about where to start in your organization, choose to solve a problem that aligns with your organizational strategy. For example, most healthcare organizations are focused on driving HCAHPS or patient satisfaction. So, an important question to answer would be, “How do employee attitudes or nurse competencies impact/drive HCAHPS scores?” The point is to determine the impact of people data/assessments on business outcomes.
  2. Start Small: If HR analytics is new to your organization, start small and choose something manageable but applicable. For instance, if one organizational goal is to reduce turnover, instead of choosing to intervene at the organizational level, choose a smaller department or team that is critical to the core business of the company, but also one that has a high attri­tion rate.
  3. Integrate & Share: When conducting HR analytics projects, work to integrate findings together as well as share resources throughout (e.g., the development of a compe­tency model in which the discovered competencies are used in selection and development).A perfect example of #3 in action is a recent project we completed, outlined below, where we linked performance data to dollars. The company has been able to leverage the solution in training and selection.

Question: Understand what high performing sales executives are doing differently than low perform­ers for the Executive Sales Professional role at a large, global professional services firm.

Solution: Data was needed from two sources – People Performance Data (360 Feedback scores for the professional sales team) and Business Performance Data (sales outcomes – sales goal attainment, average win size, and average win rate for each executive sales employ­ee). SMD then linked the 360 performance data for each sales executive to their sales outcome data. This was a smaller data set that contained no duplicates in employee full name, so SMD could use the last name and first name as the link variable.

Through this analysis, SMD was able to determine the specific behavioral competencies assessed in the 360 that have the greatest impact on sales. In this case, eight of the 12 behavioral compe­tencies from the 360 were identified as key drivers of sales outcomes.

To calculate the projected ROI of investing in these eight behavioral competencies, SMD looked at high performing sales executives (in terms of scores on these eight critical competencies) and compared them to their peers looking at differences in sales outcomes. SMD found that sales executives who evidenced high levels of all eight of the critical behavioral competencies had an average sales goal attainment of +78% higher than their peers, an average win rate of +10% more often than their peers, and an average win size of $10,000 more than their peers.

Results: Through this analysis, SMD was able to set target goals and proficiency levels for the current workforce on the behavioral competencies. Additionally, using the proficiency cuts, it was able to map current workforce proficiency levels across the critical eight behavioral competencies to identify areas where the workforce as a whole could benefit from training. These eight behavioral compe­tencies have the strongest impact on sales, and the current workforce can be trained on these competencies, so SMD advised the company to also select new employees based on their proficiency level with these same competencies. As a result, a reengineering of the selection process is underway where candidates will be selected based on hiring assessments designed to measure a candi­date’s ability on each critical competency.

There are plenty more white papers with tips and suggestions under the Resources tab. Or, let us know how we can help.

Tailor-Made, Not One-Size-Fits-All: An Analytics Approach for Employee Retention & Turnover Reduction

Randstad recently announced the results of its most recent Employer Branding Survey, citing four key factors impacting employee attraction and retention.

  • A lack of career path, not salary, is the number one reason employees leave their jobs
  • Facebook, not LinkedIn, is the number one social media tool used for job searches
  • A strong work/life balance is the leading factor for employee retention
  • More than any other generation, millennials are likely to look for a new opportunity if they do not feel engaged in their current positions

The survey triggered some thoughts on the issue because there is no question that the challenge for employers is figuring out what to do to maintain top talent.

Caution: One Size Does Not Fit All

We certainly don’t disagree that the issues Randstad cites could be playing a factor with employees at many organizations. But, we caution companies to not employ a one-size-fits-all approach to reduce turnover and retain high-performing employees. How do you know which of these are the most impactful at your organization? Remember: each organization is different, and the factors that contribute to turnover differ depending on the organizational context. Unfortunately, one-size-fits-all is only helpful when you need hats, gloves and the like – not when running a business.

An Analytics Approach

Instead of relying solely on turnover/retention research, best practic­es, and benchmarking surveys, it is important that you conduct internal analyses to identify the factors that contribute to turnover in the unique context of your organization.

  • The first step in using analytics to diagnose turnover risk is to collect the appropriate data (e.g., competency ratings, employee opinion survey results, performance ratings, objec­tive turnover data, and/or employees’ turnover intentions) at the appropriate level (e.g., workgroup level).
  • The next step is to conduct a linkage analysis to identify the critical drivers of turnover risk. Using structural equations modeling (a sophisticated statistical technique with many advantages over correlation and/or multiple regression analyses), it is possible to identify the critical competencies, attitudes, etc. that lead to higher levels of turnover. The combination of multiple data sources and the statistical linkage to turnover adds analytical rigor to the processes and reduces ambiguity about the factors that contribute to turnover in your organization.
  • Although the results of the linkage analysis are informative, few senior leaders have the time to wade through piles of data to identify actionable results. SMD has developed the Turnover Risk Scorecard™ to enhance interpretation and make the results readily accessible by all members of your organization. A sample of the Turnover Risk Scorecard is provided in Figure 1.

It Works!

SMD conducted an analysis like mentioned above, utilizing SMD Link, for a large healthcare organization experiencing high nurse turnover. The intervention, which was targeted at the organization’s 800 nurses, produced a substantial ROI. Within one year, the nurse turnover rate dropped from 18 percent to 12 percent, meaning that they lost 48 fewer nurses than in the year prior to SMD’s involvement. The cost of nurse turnover was estimated to be $50,000 per nurse. Therefore, SMD’s work resulted in an approximate savings of $2.4 million (i.e., $50,000 X 48 nurses) for the organi­zation. A tailor-made approach; can you argue with the results?

Why Does It Matter?

Employee turnover is rampant in today’s competitive talent market – and it’s a costly problem for organizations. The costs associated with recruiting, hiring, and training new employees are often greater than 100 percent of the annual salary for the position being filled.¹ At the executive level, these costs have been estimated at two to three times the executive’s annual salary. Worse news than that — the costs increase dramatically when the time and expenses associated with tem­porarily covering the vacant role are considered. What organization can afford this type of hit?

Consider the tailor-made approach for your employee retention efforts. To learn more, download our white paper, “Understand Your Turnover Risk: An Analytics-Based Approach” or contact us at info@smdhr.com.

¹Allen, D. G., Bryant, P. C., & Vardaman, J. M. (2010, May). Retaining talent: Replacing misconceptions with evidence-based strategies. Academy of Management Perspectives, pp. 48 – 64.