10 Key Workforce Questions Analytics Can Answer Joanne Bintliff-Ritchie, Principal, JBR and Associates September 18, 2015

 HR Analytics Purpose is to determine those aspects of HR management that must be prioritized and improved to allow HR to perform better and add greater value to the organization.  Workforce Analytics Purpose is to determine those aspects of people management that must be prioritized and improved to make the Organization perform better and add greater value to stakeholders. 2 Purpose of Analytics

 Economic value Market reputation or brand, market share, customer relations, government relationships, employer reputation, and community relations  Financial value Free cash flow, stockholder equity, and other monetary resources recorded on your income statement and balance sheet 3 Purpose of Analytics

Analytics enables you to: Drive Strategy Support Business Strategy Inform Human Capital strategy and HR priorities, investments, planning Develop the right Talent Management programs Inform design Identify and monitor outcome metrics Evaluate the effectiveness of these programs Quantify impacts on people and business outcomes Solve business problems Leverage data mining Support problem solving, decision making and action Need to ask the data the right questions 4 Purpose of Analytics

Context is KEY Without Context metrics and analytics are just numbers

The Questions 1.Is our Human Capital Strategy aligned with the Business/Organization Strategy 2.Is Turnover helping or hindering our ability to be successful ($$ and non-$$) 3.Are we retaining key people 4.Is employee health helping or hindering our ability to be successful 5.Are our HR Programs effective and having desired impacts on our key performance outcomes 6.Are our strategic Workforce Investments yielding returns 7.How are people and/or organization related problems contributing to a business problem 8.Do we have the right workforce mix 9.Does engagement matter 10.What human capital related metrics are leading indicators of organization success

1. Alignment with Strategy  What are the Human Capital Requirements embedded in the organization’s strategy  What are the HR Drivers that can enable the Requirements to be realized  What priorities, plans, investments, resources are needed for the Drivers  What analytics will help us to evaluate our performance on those Drivers  Verify that positive outcomes have desired impacts on strategy execution

1.8 Strategy, Objectives & Goals Strategy, Objectives & Goals Requirements & Drivers Requirements & Drivers Analytics Targets 1.Ground crew performance results align with company goals – Ground crew engagement with the strategy and objectives 2.Ground crew is able to achieve company goals – Ground crew has skills and knowledge necessary to achieve related goals % Ground crew shareholders % Ground crew certified - Year 1: 70% - Year 2: 90% - Year 3: 100% - Year 1: 70% - Year 2: 90% - Year 3: 100% Revolutionize the airline business model 1.Lowest prices 2.Best customer experience Lower costs Fast ground turnaround High OTA rating High OTD rating High customer satisfaction Exercise Alignment with Strategy

2. Turnover  Helping or hindering success  Helping  Low performers  Blockers  Positive cost benefit on non-key personnel  Hindering  High performers  High cost/time backfills  Strategically important positions  Recent hires

Turnover  Profile who is most likely to leave  Why  Where is it worthwhile to intervene (positive cost benefit)  Cost of Turnover vs Cost of Retention  Use correlations to show impact  Financial, customer, quality impacts

3. Retention of Key People  Target populations  UR hires  High Potentials and Successors  New facilities, sites, etc.  Strategic teams  Developed leaders  Key customer links  If not, why not?  What is driving retention?

4. Employee Health  Helping  Target or better productivity  Low absenteeism  Better than expected costs for insurance and high expense conditions  Hindering  Costs rising faster than comparators  High absenteeism  Low productivity

Employee Health  Absenteeism  Need to look at type, number, duration  Do you have sub-group variances  Cost  National, Regional/State  Competitors  Productivity  Key positions  Most impacted  Be judicious

5. HR Programs  Effectiveness  Accomplishment of immediate non-operational (e.g., time, participation) objectives and goals  Impact  Mitigates the risk  Affects non-human capital outcomes

Threats to strategy execution, market value, financial results, and stakeholder confidence related to unplanned executive turnover Business Risk Business Risk Objective: Address critical enterprise risks related to unplanned executive turnover by creating a pipeline of ready internal candidates for executive positions Goals 1.Reduce adverse impacts to business related to executive turnover 2.Reduce recruiting time for key executive positions 3.Reduce external recruiting costs for executive position 4.Retain successors and high potentials Objective: Address critical enterprise risks related to unplanned executive turnover by creating a pipeline of ready internal candidates for executive positions Goals 1.Reduce adverse impacts to business related to executive turnover 2.Reduce recruiting time for key executive positions 3.Reduce external recruiting costs for executive position 4.Retain successors and high potentials Succession management and high potential development program that creates: Depth and Strength of bench Fit of bench to needs Fit of development programs to needed competencies Succession management and high potential development program that creates: Depth and Strength of bench Fit of bench to needs Fit of development programs to needed competencies Succession depth and strength % of Positions filled with Successors Successor and Hi- Po Retention Time to start and Cost per hire for executive positions Financial indicators Indicators of customer and investor confidence Employment Liability Insurance risk rate Succession depth and strength % of Positions filled with Successors Successor and Hi- Po Retention Time to start and Cost per hire for executive positions Financial indicators Indicators of customer and investor confidence Employment Liability Insurance risk rate Objectives & Goals Objectives & Goals Solution Metrics Exercise HR Programs

International professional services firm 6. Strategic Workforce Investments Training Cost/ Employee Turnover Revenue/ Employee Customer Satisfaction Total Recruiting Cost Profitability Cost of Sales EFFECTIVENESSIMPACT

International fast food company 7. Business Problem Revenue Employee Turnover Customer Satisfaction Manager Turnover Employee Turnover Profitability Customer Returns

8. Workforce Mix  Should be an element of Strategy  Do we have our Target mix  Employees  Part time, full time, on call, exempt, non-exempt  Is this mix helping or hindering productivity  Non-employees  Contractors, consultants, temps, intermittents  What is the intent and reality of your use of non-employee resources  Is their use effective and having desired impacts

9. Engagement  Does it matter  Is it having impact on key performance outcomes?  Is your process affecting impact  How are you measuring  How often are you measuring  Who is participating

10. Leading Indicators  Modeling and data mining can help  Start with strong hypotheses  Include non-HR metrics in the modeling  THIS IS HARD

Apply appropriate analytic approach/es > Dimensional > Be sure you are collecting and capturing needed data elements > Modeling > Align with business options or scenarios > Comparators > internal and external benchmarks, targets, control groups > Correlations > Tie to key human capital and business performance metrics > Horizontal > vs Vertical > Data mining > Be specific; no fishing expeditions 21 Analytics Approach

Dimensional  Time: monthly, quarterly, annually  Hierarchy: organization, job, salary grade  Location: office, building, region, country  Position types: executive, manager, individual contributor  Demographics: gender, race, ethnicity, length of service, education  Descriptors: performance rating, potential category, successor

Modeling  Options  What are the possible solutions?  Tradeoffs  Costs, time, productivity, etc.  Business impacts  What are the benefits and risks of each option? 23 Analytics Approach

Data Elements  What data do you need?  Metrics  The formula is key  Dimensions, Comparators, Correlators  HR vs. non-HR  What data is unavailable or non-accessible?  Weigh the pluses and minuses of collecting and capturing  Address other issues impacting accessibility

Data Elements  Where is the available data you need? What is the source of record?  ERP/HRMS  Functional applications  Databases  Excel  What extraction and organizing tools can you access?

Cost per hire > Formula: Sum of expenses paid to attract, recruit, select, and hire external new hires divided by Sum of external hires > Data elements for formula o Fields: Requisition expense, Non-requisition expense, Type of hire: external only (ATS) > Data elements for dimensions o Fields: Recruiter name, Hiring manager, Requisition number, Date filled, Date open, Source (ATS) o Fields: Ethnicity of new hire, Gender of new hire (HRIS) o Tables: Position hierarchy, Organization hierarchy (HRIS) Data Elements

Lastly  Your list may vary permanently or temporarily depending on type and size of organization, your competitive market place, your sphere of operation, etc. Remember Context!  It’s just as important to identify what you DO NOT need to measure and/or analyze. If Reporting is sufficient then stop there.

The End