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  1. 1. HR Analytics & Predictive Modeling From data to action based on insight… Free Powerpoint Templates Page 1 6th March 2012
  2. 2. Agenda• Critical HR Challenges and the need for Insight• What is Analytics?• Benefits of HR Analytics• Predictive Modeling• HR Analytics Demo Free Powerpoint Templates Page 2
  3. 3. Critical HR Challenges Inaccurate view of workforce profile • Poor gathering of Information and not consistently distributed • Absence of insightful HR data to understand overall workforce Measuring the • Poor measurement of HR Initiatives/processes effectiveness of HR • Practically impossible to create a historical profile of the workforce processes • Poor metrics to translate employee performance into rewards Aligning talentmanagement strategy • Tough to measure talent acquisition effectiveness onwith corporate strategy corporate performance • Inaccurate impact analysis of training on employee performance Time lag in data • Too much dependence on spreadsheets gathering and reporting • Scattered data across multiple systems Free Powerpoint Templates • No single source of the truth Page 3
  4. 4. Quick PollHow many of you in this room use Free Powerpoint Templates Page 4
  5. 5. HR Analytics • Information that can be used to better manage DASHBOARDS several areas within HR • “Visible” • Integrates silos of data from ERP modules and other applications into relevant, actionable and timely insight BELOW THE SURFACE • Information delivered • Significant time, thorough personalized resources and dashboards, KPIs, metrics expertise required and alerts • Analytics is used to look at the same nugget of data from various angles and perspectives. Free Powerpoint Templates Page 5
  6. 6. Understand the Business Impact of HCM Issues in Real-Time What You Can Do So You • Provide Reasoning and Level of • Know Before Hand Impact • Have Time to React • Compare Employee - Potential • Understand the Impact Performance & Retention • Have an Integration Through • “What If” Analysis Out • Execute Organization or Worker • Get Smarter changes • Use it Today • Embed into Transactional Applications Free Powerpoint Templates Page 6
  7. 7. An example.. Planning SystemTime reporting system Payroll system Project Costing & Resource Work Planning Logs Employee Costs Employee Utilisation (which employees are underutilised, overutilised etc.) Impacts to project costing when project scope or timeline changes Provide more accurate analysis of project costing to help develop better estimation models Free Powerpoint Templates Page 7
  8. 8. Analytics• Business Intelligence/Data Warehousing and Analytics - used to understand trends/patterns in data and gather information about behaviour and causal relationships.• Analytics comes in various shapes, forms and sizes – some of the most popular forms are the dashboards and scorecards. Free Powerpoint Templates Page 8
  9. 9. Dashboards vs Scorecards• An HR dashboard like the dials in a vehicle dashboard can provide information for example about : • total employee count • how many reported to work today • the total absentee count • how many unplanned absentees there are among them etc.• However, it does not provide the user with necessary information to arrive at a Free Powerpoint Templates conclusion. Page 9
  10. 10. Dashboards vs Scorecards• A Scorecard uses a set of pre-defined rules and metrics to determine the state of health of a company.• For example : If the attrition rate goes above 8% it shows as red in the scorecard prompting the user to take action.• Some leading vendors have analytic applications that come packaged with predefined metrics, database models and reports that make the implementation of analytic solutions easier.. Free Powerpoint Templates Page 10
  11. 11. Example of Analytic WorkflowA typical analytic work flow starts with a promptlike the scorecard turning red for more thanallowable attrition rates. In the previous example, to illustrate the analytic workflow, the user starts with the scorecard, then drills down to the next level to see that most of the people quitting belong to a certain department and a project. Upon further analysis it is apparent that most of the people who have quit in the past couple of weeks have been working long hours for several months and thus had very low morale. The project has been running over budget and beyond expected deadline. To arrest the attrition the Manager takes action to either shut thePowerpoint Templates more Free project down or add people to the project to help close it. Page 11
  12. 12. Insightful information at a glance• Advanced visualization available ensures that users do not have pore over pages of reports as in the past• With just a glance of heat map, the user can understand how productive employees are across geographies (example: countries or regions) or across departments.• Helps immediately pick out areas of concern and take corrective actions. Free Powerpoint Templates Page 12
  13. 13. HR Analytics Measures vs Benefits Measures Benefits HR Performance• Revenue per employee • Employee benefit expenses• Contribution per employee • Average cost per employee• Return on Human Capital • Employee overtime  Provide consistent, integrated insight into expenses the entire talent value chain - attracting, retaining, developing, and rewarding the workforce Operations• Employee Headcount • Mean Performance Rating  Optimize organization staffing• Consolidated Headcount • Length of Service• Headcount % change • Span of Control  Gain visibility to employee performance• Diversity • Time in Job and internal mobility to engage and• Turnover Ratio • Average placement time develop key talents  Lower costs through reduced turnover Compensation and more targeted recruiting• Annual Base Salary • Total Base Compensation  Optimise compensation plans to meet• Min/Mid/Max Base Salary • Overtime Compensation• Compa Ratio goals while managing costs • Average Variable• Time Since Salary Compensation Increase • Average Bonus Free Powerpoint Templates Page 13
  14. 14. HR Analytics Measures vs Benefits Measures Benefits Recruiting Management• Vacancy Aging • New hire separation• Vacancy Rate • Time to fill • Monitor the efficiency and effectiveness• Vacancy Fill Rate • Time to hire• Internal hire ratio • Requisition open to Application of the entire recruitment life cycle• External hire ratio start • Better assess quality of hire by• Referral hire ratio • Application Start to Offer• New hire performance Extended correlating applicant sourcing with new hire performance and turnover metrics • Proactively manage learning demand Learning management and source utilization• Enrollment count • Learning Score• Successful completion • Monitor workforce learning participation • Delivered training hours rate • Top enrollments & learning results• Enrollment Wait Time • Monitor absence trends as a predictor for employee engagement Absence Management • Forecast employee availability based on• Absence Duration • Absence Occurrences planned future absence events Days • Employee Absence Rate• Notified absence days Free Powerpoint Templates Page 14
  15. 15. Predictive Modeling Free Powerpoint Templates Page 15
  16. 16. Workforce Intelligence – Understanding the Evolution Analytics Description Descriptive  Those which summarize and compare operational and/or financial data on key workforce variables within Reporting defined timeframes.  Examples: totals, averages, percentages and trends. These are used primarily to create lagging indicators Retrospective  Those which apply one or two internal data sources to derive useful information. Analytics  Example: The past education experience of job candidates is compared to job performance during the first year of employment.  These are used to create both lagging indicators, performance benchmarks and insights.Predictive Mathematical models that use multiple internal and external data sources to predict future Analytics workforce events. Example: A predictive model that uses internal and external employee level data to predict the likelihood that a particular employee will resign in the next six months and supply the reasons for the prediction These are used to create leading indicators and focus limited resources on small segments of the employee population where the impact is likely to create the greatest benefit. Free Powerpoint Templates Page 16
  17. 17. What is Predictive Modeling?– Predictive analytics uses available internal and external data to predict future events at the customer or employee level.– Value is created by focusing limited resources on the right customers/employees at the right time resulting in improved outcomes. Free Powerpoint Templates Page 17
  18. 18. WHAT-IF Analysis• Predictive modeling techniques can be applied on top of analytic tools to perform „WHAT-IF?” analysis to help even predict what the future may have in hold.• For example while designing a hiring campaign the HR manager can adjust the various knobs and levers like acceptance rate, education level, compensation, etc which will not only help him design the campaign but also can tell him the rate of head count growth and thus allowing him Powerpoint Templates future. Free to plan for the Page 18
  19. 19. Predictive Analytics – opportunities Predictive analytics can generate key insights on where the improvement opportunities exist, enabling the development of strategies to maximize employee lifetime value Characteristics of Application Opportunities Questions to Address Predictive Analytics  Recruiting and hiring new  What are the characteristics  Predictive analytics uses employees of successful employees ? available internal and external data to predict future events  Optimizing performance  What are the attributes of at the customer or employee management high-performing level. employees?  Improving employee  Which employees are at  Value is created by focusing retention greater risk for leaving? limited resources on the right employees at the right time,  What is the economic value resulting in improved of reducing employee outcomes. turnover?  Quantifying the value of  What impact do training training investments investments have on sales performance? Free Powerpoint Templates Page 19
  20. 20. DemoFree Powerpoint Templates Page 20
  21. 21. Typical HR Analytics Suite 9 Dashboards, 45 Dashboard Pages, 238 Reports, 400 Metrics Functional Area Sample Metrics Metrics Headcounts (Full-time employees, by roles),Absence 32 Tenure related etc Salary Ranges, Comparisons, BonusCompensation 90 Comparisons, time since last raise etc.Learning Average enrollments, scores, completions etc 16 Performance metrics across grades, geography,Performance 37 ethnicity, direct & indirect etc. Applicant metrics, interview scores, serviceRecruitment 130 milestones, offers vs acceptance ratios etc. Promotion ratios, Satisfaction measures, rehires,Workforce Profiles 95 avg service lengths etc. Total 400 Free Powerpoint Templates Page 21
  22. 22. System aspects• BI tools nowadays have prebuilt dashboard pages which have prebuilt interface to Tier 1 ERP applications.• The Analytics suite could be implemented in about 6 to 8 weeks for an organization with 1000 employees.• Emerging trends in Talent management which includes performance and goal management, Talent review process (9 box grid), workforce predictions, succession planning are available in some of these applications.• Talent management with embedded analytics is being implemented by global organizations through a cloud model (SaaS), where customer can utilize the service Pay as you use model. There is no need to buy licenses and minimal implementation effort is involved. Free Powerpoint Templates Page 22
  23. 23. HR Analytics vis-à-vis typical HRMS reporting HRMS Reporting Analytics ReportingFlat – 2 dimensional Multi dimensionalIndividual reports which need to be Metrics go across subject areascollatedReactive reporting Pro-active reportingNeed to define “what to see” Pre defined Metrics based on best practices availableReport is from a single source Reporting can include non HRMS sources as wellMetric definition is not Metric definition is consistent across thestandardized enterprise Free Powerpoint Templates Page 25
  24. 24. Oracle Fusion Performance Management Free Powerpoint Templates Page 26
  25. 25. Oracle Fusion Performance Management Free Powerpoint Templates Page 27
  26. 26. Oracle Fusion Performance Management Free Powerpoint Templates Page 28
  27. 27. Oracle Fusion Performance Management For Business Leaders • Monitor process • Monitor guideline compliance For Managers • Easy to keep track • Easy to complete For Employees • Know what‟s expected of me • Easy to do Free Powerpoint Templates Page 29
  28. 28. Goal Management Free Powerpoint Templates Page 30
  29. 29. Goal Management Free Powerpoint Templates Page 31
  30. 30. Goal Management Free Powerpoint Templates Page 32
  31. 31. Goal Management For Business Leaders • Set direction • Ensure alignment For Managers • Assign targets • Monitor progress For Employees • Tie goals to what matters • Communicate progress Free Powerpoint Templates Page 33
  32. 32. Compensation Management Make Every Compensation Decision Count Free Powerpoint Templates Page 34
  33. 33. Compensation Management Make Every Compensation Decision Count Free Powerpoint Templates Page 35
  34. 34. Compensation Management Make Every Compensation Decision Count Free Powerpoint Templates Page 36
  35. 35. Compensation Management Make Every Compensation Decision Count For HR Comp Analysts • Enforce wide range of business rules • Model budget and compensation scenarios • Analyze, model and allocate compensation across borders and boundaries For Managers • Validate decisions with alerts and summaries • Research allocations with real-time analytics • Configure worksheet according to personal workstyle Free Powerpoint Templates Page 37
  36. 36. Compensation Average income per employee• This would help us evaluate how the average income of our company compares with the market standards. We could group it with Position/Job/Performance bands for comparison with market standards. Comparative Ratio• Compa ratio describes the individuals position in the pay range against the pay policy reference point for the range and can be used to reposition an individuals pay in the range if it is too high or low. Compensation as percentage of Sales• Helps compare compensation across departments with their sales output thereby ensuring that the high performing departments are suitably rewarded. Variable pay as percentage of compensation• This helps us in knowing the variable component (commissions) paid as a percentage of the total compensation. Over Time Pay as percentage of compensation• This will indicate the Overtime efforts put in, and combined with the sales KPI could indicate under staffing in particular departments. Free Powerpoint Templates Page 38
  37. 37. AttritionEmployee turnover percentage This KPI would indicate whether the total terminations have improved/worsened or within permissible limits. Merging it would other tradition KPIs like Sales output of a department would help us understand the how the productivity is affected by these terminations.Voluntary turnover percentage Voluntary terminations refer to those initiated by the employees, these kinds of terminations harms the Organization.Involuntary turnover percentage Involuntary terminations refer to those initiated by the Organization. This could be coupled with other traditional KPIs to improve recruiting procedures and minimize involuntary terminations.Average period of service of employees who resign This KPI helps us understand service bands of the employees leaving the organization and plan the replacements accordingly. Suitable retention plans can be developed improved if we know which category of people we are at a higher risk of losing.Top Performer Voluntary turnover Losing top performer is always a concern. Knowing the top performers and the reasons/department/supervisor we have lost them will help prevent such cases in the future.Productivity turnover rate per department This coupled with the turnover rate will help us understand the loss of productivity caused due to terminations. Free Powerpoint Templates Page 39
  38. 38. Performance Sales turnover• This KPI will indicate if the sales turnover has been in an uptrend or downtrend. Sales turnover per employee• This KPI will help us understand the top performing departments. A higher value is always preferable but it could also indicate under staffing in certain scenarios. Profit per employee• This KPI will be quite similar to the one mentioned above, but it will help us locate areas where higher sales is not translating to higher profits. It possibly indicates higher expenditure which needs to be controlled. Administration cost per employee• This KPI will reveal a major expense namely labour cost involved. A combination of all these KPIs will reveal if the employees of high performing departments are suitable rewarded. Labour cost as percentage of sales• This KPI shows the labour cost as a percentage of sales. Free Powerpoint Templates Page 40
  39. 39. Retention At Risk top performer count• It’s important to know the top performers whom we are at a risk of losing. The KPI will be calculated based on the values of compa ratio and performance ratings of an employee. Percentage Average Satisfaction• This KPI will indicate if employees are satisfied with the work environment. A detailed report can be created that help us find the reasons for dissatisfaction if any (work life balance, overtime hours, compensation etc). Average increase in compensation• It will help us understand if employee’s efforts are suitable rewarded in a timely manner. Training programme enrollments per employee• It will help us understand if employees are getting a chance to upgrade skills for career progression, could be an indicator for assessing voluntary turnover. Overtime Hours• If the employees have to consistently put in extra efforts to meet the targets, it could be because of labour constraints. If not fixed appropriately it might lead to voluntary turnovers. Free Powerpoint Templates Page 41
  40. 40. Diversity Contingent worker as a percentage of total workforce• Indicates the composition of contract workers in the organization. Full Time workers as a percentage of total workforce• Indicates the percentage of Full Time workers in the workforce. Headcount• Headcount metric could be used with a variety of dimension columns to understand the diversity in the workforce. To name some - – Nationality/Ethnicity – Gender – Skill – Educational Qualification – Age Band – Service Band – Performance band Free Powerpoint Templates Page 42
  41. 41. Oracle Fusion Talent ReviewMaximize the Value of Leadership Meetings Free Powerpoint Templates Page 43
  42. 42. Fusion Succession Management Free Powerpoint Templates Page 44
  43. 43. Oracle Fusion Workforce PredictionsProactively Identifying Potential Issues and Taking Action Value for Managers • Understand organizational impacts real time, take early corrective action Value for HR Professionals • Monitor global conditions and take early corrective action • Guided through taking the right corrective action Free Powerpoint Templates Page 45