Workshop HR Analytics in SSC - 3rd CEE Strategic SSC...

Workshop

HR Analytics in SSC

Sjoerd van den Heuvel

Eva Reuling

Welcome!

Eva ReulingDirector Institute for Labor and Organization

University of Applied Sciences Utrecht

Sjoerd van den HeuvelPeople Analytics Researcher and lecturer

University of Applied Sciences Utrecht

What will we be doing?

Introduction into People Analytics

Logic

Absenteeism

Employee turnover

Job performance

Measures and Analytics

Analytics principles

Predictive analytics

Process

What will we be doing?

Developing your People Analytics question

Conceptual modeling

Debating

“The higher the number

of people going to the

beach, the more the sun

will shine”

What is HR Analytics (and especially…what not)?

“We should invest in X,

because then Y

decreases”

0

2

4

6

8

0

2

4

6

8

YZX

Y

Z

X

Y X

X Y

X Y

What is HR Analytics (and especially…what not)?

“the systematic identification

and quantification of the

drivers of business outcomes,

with the purpose of making

better decisions.”

Understanding

Explaining

Predicting

What is HR Analytics (and especially…what not)?

HR Analytics

Workforce analytics

Talent analytics

…

People

Analytics

What is HR Analytics (and especially…what not)?

What strategic People

Analytics question would

you like to answer in your

organization?

Logic of absenteeism

Logic of absenteeism

Absenteeism is any

failure to report for or

remain at work as

scheduled, regardless

of reason.Versus

Logic of absenteeism

13

Logic of absenteeism

Generally 5 categories:

Personal Illness

Family-Related Issues

Entitlement Mentality

Stress

Personal Needs

14

Causes Absenteeism Consequences

Source of data: “2007 CCH Unscheduled Absence

Survey,”Human Resources Management Ideas &

Trends 664 (October 10, 2007).

Logic of absenteeism

Generally 4 categories:

Cost of payments for non-work time of absentees

Cost of managing absenteeism problems

Cost of time of replacement workers

Cost of reduced work quantity or quality

15

Indirect costs versus direct costs

Causes Absenteeism Consequences

Logic of absenteeism

16

Others perform work? Process stopped? Activities delayed / missed?

Causes Absenteeism Consequences

Logic of employee turnover

Logic of employee turnover

Average turnover rate?

Consequences?

18

Logic of employee turnover

19

Employee separation,

also called employee

turnover, is the

situation where an

employee permanently

leaves an organization.

Logic of employee turnover

20

Quantity Quality Cost

Voluntary versus involuntary

Logic of employee turnover

21

On which one should you focus?

Functional versus dysfunctional

Logic of employee turnover

22

Logic of employee turnover

23

Costs are easily

100% to 250%of departing person’s salary,

depending on the employee’s skill

and level of responsibility.

Computing turnover

rates

Number of turnover incidents per period

───────────────────────── ×100

Average work force size

Exit interview

Administrative time

Separation pay

Unemployment tax

Pension and benefit payouts

Supplemental unemployment benefits

Severance pay in lieu of bonus

Accrued vacation and sick pay

Lawsuits by aggrieved employees

Logic of employee turnover

24

Separation costs Replacement costs Training costsLost productivity & Lost

business

* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,

involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.

Communication of job availability

Pre-employment administrative functions

Entrance interviews

Testing

Staff meetings

Travel/moving expenses

Post-employment acquisition and dissemination of information

Employment medical exams

Rehiring of former employees

Logic of employee turnover

25

Separation costs Replacement costs Training costsLost productivity & Lost

business

* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,

involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.

New employee orientation literature and activities

Formal training

Instruction by experienced employee

Logic of employee turnover

26* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,

involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.

Separation costs Replacement costs Training costsLost productivity & Lost

business

Performance differences between leavers and their replacements

Cost of additional overtime to cover the vacancy

Cost of additional temporary help

Wages and benefits saved due to the vacancy (so subtract these!)

Cost of reduced productivity while the new employee learns the job

Cost of lost productive time due to low morale of remaining employees

Cost of lost customers, sales, and profits due to the departure

Cost of additional (related) employee departures

Logic of employee turnover

27

Separation costs Replacement costs Training costsLost productivity & Lost

business

* Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals,

involuntary layoffs). See table 4-1 for overview. Type of costs may also differ per country, due to e.g. legislation.

Logic of job performance

Logic of Job performance

29

Pivotal talent pools

are talent pools that

have the greatest

strategic impact

Logic of Job performance

30

Logic of Job performance

31

Logic of Job performance

32

Logic of Job performance

33

Logic of Job performance

34

Logic of Job performance

Nature of job:

autonomy and

discretion

Relative value of

variations in

performance to

the organization

What does the conceptual

model look like for your

strategic People Analytics

question?

Measures and Analytics

6Actions

5Insights

4Analytics

3Metrics

2Data

1Opinion

Measures and Analytics

Measures and Analytics

39

Measures and Analytics

40

Time lags Levels of analysis Causal ordering

1 Schweiger, D. M., & DeNisi, A. S. (1991).

Communication with employees following a

merger: A longitudinal field experiment. Academy

of Management Journal, 34(1), 110–135.

Measures and Analytics

41

6,7 7

Company A Company B

Time lags Levels of analysis Causal ordering

Measures and Analytics

42

3 8 9 7 7 7

6,7 7

Company A Company B

Time lags Levels of analysis Causal ordering

Measures and Analytics

43

3 8 9 7 7 7

6,7 7

Company A Company B

Time lags Levels of analysis Causal ordering

Measures and Analytics

Church of the Flying Spaghetti Monster Pastafarianism

44

Somalia has "the highest number of pirates and the lowest carbon

emissions of any country"

Time lags Levels of analysis Causal ordering

Temporal priority

Concomitant variation

Elimination of other plausible alternatives

Measures and Analytics

45

Time lags Levels of analysis Causal ordering

Measures and Analytics

46

Bron: Eric Siegel, Predictive Analytics

Measures and Analytics

Decision three

Regression formula

Algorithm

…

Step 1

Collecting data

Step 2

Learning from data

Step 3

Creating predictive

model

Step 4

Collecting individual

characteris-tics

Step 5

Applying

Predictive model

o Correlation (mwa..)

o Regression

o Causality

o Cluster analysis

o …

Measures and Analytics

Who: 150 employees

Goal: improve productivity

Means: training12%!

Measures and Analytics

Costs of training per employee: €5000,-

So, total costs: €750.000,-

Average productivity increase: €5600,-

So, total productivity increase: €840.000,-

So, benefits – costs: €90.000

Return on investment: 12%

1. Leadership profile of manager

2. General engagement of employee

3. Tenure function

4. Temporary or permanent contract

5. Amount of training hours

300%

30 employees

• €20.000 increase

• Total: €600.000,-

120 employees

• €2.000 increase

• Total: €240.000,-

Effectivity of training determined by:

€5000,-

€150.000

€20.000

€600.000

€450.000

Loose the responsibility for reporting

Interns are no game changers

Step outside of your domain; focus on crucial business challenges

Know your languages (business, statistics, consultancy, IT, …)

Start with modelling (and conceptualizing and operationalizing)

From lobbying (begging?) to pro-actively generating appetite

From producing decisions to challenging insights

Process

Thank you for your participation!

Sjoerd van den Heuvel

Eva Reuling