Thursday, February 06, 2014

Data Analytics – Is Your Organization on Track?

It’s predicted that by 2015 Data Analytics will be responsible for generating $3.7 trillion – that’s right, trillion – in products and services and 4.4 million new jobs. With such high expectations, many have wondered how data analytics can be used within the realm of Human Resources in order to strengthen an organization.
How exactly can data analytics be applied in Human Resources? Josh Bersin mentioned in a Forbes Leadership post that “Companies are loaded with employee, HR and performance data. For the last 30 years we have captured demographic information, performance information, educational history, job location, and many other factors about our employees. Are we using this data scientifically to make people decisions?” A simple question, but truthfully, are we using the information we get from exit interviews and employee satisfaction surveys to better our organizations’ bottom lines? Are we analyzing performance rates of employees and working on improvements? Or are we simply collecting the data in a rote fashion and not doing anything with it? We need to ask ourselves how we can use this wealth of information to better our organizations.

Two case examples are helpful in building the case for data analytics. Bon–Ton, a chain of 280 department stores in the United States, leveraged its data to identify the qualities apparent in their more successful sales reps.  Since reviewing this information, the company now screens potential sales reps by using a test designed around those key traits. Those who score high on this test generally sell 10% more than other reps, and tend to enjoy their work more. Since 2008, the company has seen a $1,400 increase in sales per representative and 25% lower turnover, providing a strong return on investment over the analysis and test development costs.

In 2009, PNC Financial Services recognized that when hiring experienced outsiders over internal candidates, they were unknowingly hurting their organization. PNC partnered with its marketing analytics group to analyze the sales performance over several years of external hires versus people promoted from inside. The results? In some key positions, internal candidates were significantly more productive their first year than experienced external hires. In later years, outsiders did improve…but didn’t match the productivity of the internal candidates. In short, the company was losing money by not recognizing this reality.
So how can you use data analytics right now? Start with these two easy steps:
1. Use the data you have! Study it to identify areas of weakness. Don’t let the data sit dormant in a binder or in your HRIS.  Want to identify the qualities needed for strong employees in specific positions? Use the data from performance reviews to cross-compare with the competencies, repeated behaviors, and consistent actions of these employees. See if you can foster and develop these qualities or habits by training other employees. Want to reduce turnover rates? Examine those employee satisfaction surveys…and actually investigate those concerns and make adjustments.

2. Dig deeper if necessary. Sometimes the data you already have isn’t enough…invent new ways to grab the data needed. Google, for example, did a study on whether good managers matter for their culture. Prasad Setty, Head of Google’s people analytics group, says that “through various methods we found positive relationships between good management and retention and the performance of teams. We then conducted double blind interviews to identify key behaviors exhibited by our best managers. We found eight behaviors that make a good manager and five pitfalls to avoid. These are now incorporated into our manger-training programs and coaching sessions…the vast majority of our lower-rated managers have improved as a result.”

“Data analytics may seem daunting at first, particularly if time pressures or a fear of numbers is present.  Analytics need not require using calculus, however.  Key in data analytics is identifying patterns and relationships,” explains Astron Solutions’ National Director Jennifer Loftus.  “Those relationships can then become the basis for actionable measures that impact your organization’s bottom line.”

Need help setting up an employee satisfaction survey? Do you seek a more effective way to collect and analyze your talent management data to improve your organization? Contact Astron Solutions today to learn how we can help!

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