Data Science and Analytics in Human Resources - Moneyball comes to HR

Bersin & Associates Who We Are• Bersin & Associates empowers HR and learning organizations to drive bottom line impact through world class research and consulting Practices Human - Human Resources Resources - Enterprise Learning - Talent Management Leadership - Talent Acquisition Development - Leadership & Succession Learning & Offerings Development• WhatWorks® Membership: Research, Tools, Education, Consulting Talent Acquisition• IMPACT: The industry’s premiere conference on the Business of Talent• BersinBasics®: Fundamentals of Talent Management for Talent Business Professionals at All Levels Management Copyright © 2011 Bersin & Associates. All rights reserved. Page 2

F U N D A M E N T A L S O F T A L E N T M A N A G E M E N T F O R B U S I N E S S P R O F E S S I O N A L SPerformance & Leadership Learning & Fundamentals of Competencies Coaching & Goal Succession Development Development Performance & Job Profiles Development Management Fundamentals Strategy AppraisalsIntroduction to Understanding Intro to Cascading & Introduction to Conducting aPerformance Leadership Competencies in Aligning Goals Learning & PerformanceManagement Development Talent Development Appraisal Management Fundamentals of StrategyUnderstanding How to Assess Goal Setting Fundamentals ofMulti-Rater People Using Introduction to Goal SettingAssessments Competencies in Understanding Informal Learning Intro to Performance vs. Fundamentals of TalentPlanning for Competencies Potential Learning Coaching ManagementSuccession in Talent CapabilityManagement Management Understanding Conducting a Development & How to Assess and Using Job Performance Culture PeopleUnderstanding Profiles AppraisalPay for Creating UnderstandingPerformance Development Pay for Plans Performance Copyright © 2011 Bersin & Associates. All rights reserved. Page 3

Agenda Today’s Business Environment Talent Markets: Out of Balance Modern High-Impact Talent Management Strategies Need for Assessment Science How Moneyball applies to HR Why Data Science Matters Copyright © 2011 Bersin & Associates. All rights reserved. Page 4

2011 Business EnvironmentGlobalization, Innovation, Cost Containment What Are Your Organization’s Top Business Challenges for 2011? Financial pressure to cut costs Severe business downturn 35% of organizations see the need to Competitive threats Need to Accelerate Innovation +90% Increase accelerate innovation and globalize – Declining margins the highest level in four years…. yet… Diminished access to capital New top management team Launching new products and services 51% struggle to hire the right talent, Global expansion +100% Increase despite high unemployment… Acquisition or mergers Rapid business growth +400% Increase 0% 10% 20% 30% 40% 50% 60% 70% © Bersin & Associates, Corporate TalentWatch® Research, Senior HR and Business Executives, ■ June 2011 ■ June 2010 1/2010 Copyright © 2011 Bersin & Associates. All rights reserved. Page 6

The Global Auto MarketplaceAutomobile Sales – U.S. vs. China 20 U.S. 18Million Vehicles Sold 16 13.9 million 14 12 10 10.4 million 8 China 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Copyright © 2011 Bersin & Associates. All rights reserved. Page 7

Ford Figo – Fastest Selling Car in India Ford Figo Story Designed in Manufactured India for the in Chennai by Indian Market Indian Staff Colors, face, Size, Shape, and styling and features designed for designed for Indian tastes lifestyle and roads in India Copyright © 2011 Bersin & Associates. All rights reserved. Page 8

What would You Be Willing to Give Up fora Week to Keep your Mobile Phone? Brushing teeth: 22% Sex: 33% Exercise: 54% Caffeine: 55% Gaming is now the fastest growing application on mobile devices Copyright © 2011 Bersin & Associates. All rights reserved. Page 10

The Borderless Workplace WORKFORCE WORKPLACE Connected Transparent Global Dynamic Multi-Generational Performance-driven Mobile Specialized Transient Interconnected Employee New Models for Career New Models for HR & L&D Partner Mentor CustomerCandidate LIFESTYLE 750 million people on Facebook Peer 135 million people on LinkedIn 75% of workers are mobile BigData is Everywhere Manager Copyright © 2011 Bersin & Associates. All rights reserved. Page 11

The Ill-Prepared US Workforce Only 32% of college graduates have “excellent” skills to enter the workforce Only 16% of high school graduates have such skills. Missing are: • Professionalism/work ethic • Creativity and Innovation • Lifelong learning/self-direction • Critical thinking/problem solving Only 18% of workforce training programs raise skills from “deficient” to “adequate” Copyright © 2011 Bersin & Associates. All rights reserved. Page 14

A Free Agent Workforce Job tenure for under-35 year olds is 2.5 years The average worker today will have 11 jobs by the age of 45 2/3 of all employers are increasing their percentage of contingent workers We estimate that as much as 40% of the US workforce is currently on a contingent basis Copyright © 2011 Bersin & Associates. All rights reserved. Page 15

Increasing Specialization Expertise drives competitive Top advantage Management Specialization improves Senior quality and reduces cost Management The Deep skills developed Experts Middle Management through “deliberate practice” and reinforcement Senior Specialists First Line Management Deep skills come from a range Functional Specialists / Front-Line Employees of developmental experiences We need career development Back Office, Operational, Contingent Employees in all critical job roles High Performing Organizations Understand This Copyright © 2011 Bersin & Associates. All rights reserved. Page 16

Change in Employment Contract  In 2011 32% of employees are “planning on leaving” their employers, vs. 19% two Loyalty years ago  59% of employees believe their employer is a sound “long term” place to work vs. Career 65% over last three years  Only 42% of employees believe that promotions go to the “most qualified” Equity employeesMercer Whats WorkingResearch, October 2011 Copyright © 2011 Bersin & Associates. All rights reserved. Page 17

The Workforce Really Is Younger…. This generation has a very different view of work and, therefore, of loyalty. And…Younger employees are much more likely They see work as a mutually beneficial exchange with their employer and, when it’s no longer working for them, they plan to move on. to leave their employers. There is no strong sense of allegiance to the organization or expectation of long-term employment. Their allegiance is primarily to themselves and their Under 25 year olds are 10% more likely careers, and that has major implications for how employers manage this to want to leave, and under their are 5% more likely. youngest segment of 35 workforce.” Mercer October 2011 Mercer October 2011 “By 2013, 47% of employees will be those born after 1977. -- US Census Bureau Copyright © 2011 Bersin & Associates. All rights reserved. Page 18

What Makes People Want to Stay? 1 2 So….hiring and promoting the “right people” and developing the “right leaders” has a multiplying effect on retention, engagement, and performance. 3 Copyright © 2011 Bersin & Associates. All rights reserved. Page 19

Why Talent Management is Needed  Slow Response to Changing Business Needs • Inability to identify current and future talent gaps Traditional Silos of HR • • Hiring strategy and development planning not in sync No clear picture of future “talent profile” • Leadership pipelines in jeopardy  Disconnected Decision Making • Data and processes not integrated • Talent not shared across business units Performance Management • Learning plans not linked to assessments and skills Leadership Development Learning & Development Compensation - Benefits Sourcing & Recruiting gaps in current talent pool Succession PlanningWorkforce Planning • Lack of visibility into talent gaps  Not responsive to Employee Demands • Employees want career development • Defined career paths and competencies not clear and consistent • Talent mobility difficult during change • Managers still the weakest link in organizational performance  Administratively Intensive • Data entry is repetitive • High volume of manual work to complete HR review processes • Difficult to obtain executive-level talent information • Hard to plan for the future Copyright © 2011 Bersin & Associates. All rights reserved. Page 21

Integrated Talent Management Team alignment Global Pay equity Recruiting 2 3 Managerial Efficiency and Sourcing Performance expertise Effectiveness & Recruiting management HR Systems Deep expertise & Metrics Generational 1 4 evolutionFuture planning Productivity Scenarios Talent Strategy Learning & CareerBusiness level & Planning Development talent plans Development Gap and risk Competency analysis Management 7 5 New leadership Effective pay models and equity and Compensation Succession needs efficiency planning Total talent Comparative mobility pay analysis 6 Talent pools Pay for and segments performance Leadership Development Copyright © 2011 Bersin & Associates. All rights reserved. Page 22

Talent Management Maturity Model® Level 4: Strategic Talent Management Fully integrated processes and systems 7% used to make business decisions. TM is business-integrated Level 3: Integrated Talent Management Heavy focus on connecting systems and processes; 20% single person or team responsible for talent initiatives Level 2: Standardized Talent processes Talent processes consistent and tailorable, some integration; 45% several systems connected through manual processes Level 1: Siloed HR Processes Individual HR processes or silos; 28% may have systems in place but not connected Copyright © 2011 Bersin & Associates. All rights reserved. Page 23

Creating Talent Mobility Emerging Top Leaders Emerging Leaders Management Senior Management SMEs Middle Management (Consultants) Senior Specialists First Line Management Functional Specialists / Front-Line Employees Back Office, Operational, Contingent Employees Copyright © 2011 Bersin & Associates. All rights reserved. Page 25

Implementing Talent Mobility Exec Succession Top New Top Management Leader Management New Candidate Senior Management Developmental Assignment SMEs Middle Management Contract (Consultants) Hire Stretch LateralPart Time Assignment Promotion Loan Senior Specialists First Line Management External Upward Assignment Promotion Functional Specialists / Front-Line Employees Lateral Job AssignmentIntern New Back Office, Operational, Contingent Employees Assignment Copyright © 2011 Bersin & Associates. All rights reserved. Page 26

Managing Talent Mobility Coaching Succession Assessment Management ORGANIZATION INDIVIDUAL NEEDS NEEDS / DESIRES VALUES STRATEGIC DESIRED INITIATIVES COMPETENCIES ANNUAL Individual (KNOWLEDGE, GOALS DESIRED Development DEVELOPMENT BUSINESS BEHAVIOR, INDIVIDUAL NEEDS Plan (IDP) MOBILITY OUTCOMES SKILLS) DEVELOPMENT OPEN POSITIONS PLAN (IDP) STRENGTHS CAREER ASPIRATIONS & MISSION OPPORTUNITIES VISION Strategic Career PerformanceCompetencies Organizational Management Management Planning / Restructuring Copyright © 2011 Bersin & Associates. All rights reserved. Page 27

High-Impact Talent MobilityFacilitated Talent Mobility – New Market for Integrated Career Development Strategic Workforce Planning Talent Assessment Talent Outreach & Exploration Talent Deployment Talent Onboarding & Development Copyright © 2011 Bersin & Associates. All rights reserved. Page 28

Value of Development Planning Organizations with highly effective development planning significantly outperform those without. With WithoutVoluntary Turnover 8% 11%Turnover among High-Performers 2% 3%Ability to “develop great leaders” 23% 7%Ability to “plan for future talent 22% 6%needs”Median Revenue per Employee $169,000 $82,800 Copyright © 2011 Bersin & Associates. All rights reserved. Page 29

Value of a Coaching CultureA coaching culture is the #1 driver of employee engagement80%70%60% No or Weak Cultural50% Support for Coaching40% Good Cultural Support for Coaching30% Excellent Cultural20% Support for Coaching10% 0% Below Average Average Above Average Bersin & Associates High-Impact Performance Management® Employee Results Employee Engagement Index 2011 Copyright © 2011 Bersin & Associates. All rights reserved. Page 30

Agile Performance Management Continous goal setting “OKR – Objectives and Key Results” not cascading goals Continuous feedback from all directions including bottom up Daily or weekly “scrums” to review job and team performance Managers continuously look for ways to remove bottlenecks Delegate authority within guidelines Make people successful with coaching and work simplification Reward people with feedback and purpose Copyright © 2011 Bersin & Associates. All rights reserved. Page 31

Open Career Development 25% Business Impact (12 measures) 20% Engagement and retentionin business impact% Improvement 15% 10% 5% 0% Individually Manager Level Business Unit Level Enterprise Level -5% -10% Today people want A Career “Manage your -15% “open” career Development Own Career” opportunities Strategy -20% Copyright © 2011 Bersin & Associates. All rights reserved. Page 32

How do Companies Hire People?2/3 of hiring done without any significant assessment% of Organizations Which Regularly Use Following Assessment Practices Background checking: 79% 2/3 use no real Managerial interviews: 64% assessment process Interview training: 47% at all … leaving the process to Behavioral assessments: 34% hiring managers or recruiters Reference calls: 32% Skills-based assessments: 25%Bersin & Associates High-Impact Talent AcquisitionStudy, Fall 2010, 158 organizations responded Copyright © 2011 Bersin & Associates. All rights reserved. Page 34

Large Managerial Skills Gap Managerial skills rated lower than skills of entry-level workers Current Capabilities by Role, June 2011 Line Managers 59% 6% Weakest Entry-Level 50% 7% Sales representatives 42% 10% Customer Service 38% 5% % Uneven Director-Level 38% 2% % Weak Engineering-Professional 26% 5% Top Executives 24% 2%© Bersin & Associates, Corporate TalentWatch®Research, Senior HR and Business Executives, 9/2011 Copyright © 2011 Bersin & Associates. All rights reserved. Page 35

Assessment Science Works 16,500 retail employees Turnover rate - 72% Shift in business from collectors to jewelry buyers Turnover reduced by ½ to 36% Sales improvement of 26% 90% improvement in screening Design Implement Clearly Incredible High Value (Games and Define Role Results Assessment Assessments) Copyright © 2011 Bersin & Associates. All rights reserved. Page 36

But… there is a Surprise Effect What is the most important baseball statistic that drives a winning team? • Team batting average? • Runs batted in (RBI)? • Pitcher’s earn run average (ERA)? On Base Percentage (OBP) Not a Characteristic of the Player (candidate) Copyright © 2011 Bersin & Associates. All rights reserved. Page 37

How do Scouts Find Top Players? They look for “traditional performance characteristics” • Speed and athleticism • Ability to hit, home runs • Appearance, confidence • Just like corporate recruiters look at grades, experience, prior roles… But what really matters is their ability to get on base Copyright © 2011 Bersin & Associates. All rights reserved. Page 38

BigData in US Business 14 Exabytes of Data in US 6 billion photos uploaded to Corporations (1 Exabyte is Facebook every month 40,000X the library of congress) YouTube uploads more content each day than all networks combined We are at an inflexion point: OrganizationsUS Businesses will be short140,000-190,000 analytic positions whichyears to leverage big data will farin the next three learn 1.5 million more data-savvy outperform those who do needed to leverage managers not. big - McKinsey data in the United States Copyright © 2011 Bersin & Associates. All rights reserved. Page 47

Data Analysis Skills Important to HR Top HR Skills | Capabilities Correlation Business Partner relationship management .52 Managing and leading people .51 Coaching and Mentoring .49 Change management and communications .48 Analyzing and interpreting data .47 Knowledge Sharing and expertise directories .47 Managing your Personal Development .45 Top Organizational | Managerial Capabilities Developing a high performance culture .77 Developing a strong learning culture .77 Developing strong talent segmentation .74 Developing high levels of career development and mobility .73 Attracting and selecting the right talent .64 Measuring business impact of HR .64 Developing high levels of engagement .54 Giving people honest feedback .49 Copyright © 2011 Bersin & Associates. All rights reserved. Page 48

HR Organizations are Not Ready What percentage of HR organizations do you believe feel have strong skills in data analysis and interpretation? 6% Rate themselves “High” 56% - “Poor”Bersin & AssociatesHigh-Impact HR Organization® 2011and 2010, n=741 organizations Copyright © 2011 Bersin & Associates. All rights reserved. Page 49

The Lowest Rated HR Skill Relative Strengths of HR Skills and Capabilities Attracting and selecting the right talent 17% Promoting health and wellness 15% Onboarding new talent 7% Fairly allocating compensation 6% Understanding skills needed by role 4% Encouraging innovation and collaboration 1% Creating a high-performance culture -4% Measurement, analytics, and Enabling a learning organization -5% segmentation are the lowest rated skills in HR teams Identifying and developing future leaders -6% today Driving internal mobility -11% Developing workforce analytics for management -12% Measuring HR program effectiveness -18%Bersin & AssociatesHigh-Impact HR Organization® 2011and 2010, n=741 organizations Copyright © 2011 Bersin & Associates. All rights reserved. Page 50

In Conclusion Businesses today are focused on globalization, innovation, employee engagement, and preparing for growth The talent markets are out of balance, making it more important than ever to find the “right people” for your organization Leadership, coaching, mobility, career development, and employment branding are the keys to building a highly engaged workforce The science of assessment plays an ever-increasing critical role Skill, focus, and dedication to data and data science will differentiate you in the coming years Copyright © 2011 Bersin & Associates. All rights reserved. Page 52

Data Science and Analytics in Human Resources - Moneyball comes to HR

by Josh Bersin on Nov 03, 2011

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Data Science and Analytics in Human Resources - Moneyball comes to HR — Presentation Transcript

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