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HR Analytics & HR Tools

HR Analytics & HR Tools

By
Kavita Kulkarni, Head HR Pune and Head HR for SI and ES, Infosys Technologies Ltd.

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HR Analytics & HR Tools 02 HR Analytics & HR Tools 02 Presentation Transcript

  • HR Analytics 21st November 2008 Kavita Kulkarni Pune Chapter Annual Conference 2008
  • Why HR Analytics • In the knowledge economy of the new millennium, people are the profit lever & critical differentiators of a business enterprise. • Other than people, all other assets of an organization are passive/inert, which require human application to generate value. • The key to sustaining a profitable company or a healthy economy is the productivity of the human capital. • With today’s employee cost often exceeding 30% of corporate expense HR Analytics today s expense, become crucial. • An over-dependency on strict financial ratios is generally regarded as ‘lagging' indicators of performance. In other words, profit, EBITDA, and segmented revenue tell us what has happened in the past but provide little insight into the future. • On the other hand, leading indicators as the name suggests, not only provide this insight but can also, if linked to financial plans, allow us to forecast future financial performance with more confidence. Pune Chapter Annual Conference 2008
  • What is the CEO saying Organizations need the HR department only if it can lend itself to the day-by-day reality of improving the business. Stop St meditating with the HR monks. Get down in the dit ti ith th k G td i th trenches with the business "sinners" and start getting dirty. Many HR professionals know a lot about HR but nothing about b siness abo t business. Transactional HR will contin e to be ill continue subject of technological innovation. Consultative HR is currently being overwhelmingly handled by consulting firms. U need to understand my business and my balance sheet Pune Chapter Annual Conference 2008
  • Why HR Analytics • Enable organizations to get meaningful insights from HR data collected enhancing Value to the HR function with: Dashboard driven decisions • Higher efficiency, quicker , logical decisions. • Optimise detailed analysis on workforce performance by integrating critical data from across the enterprise and transforming silos of information into comprehensive , timely , and actionable insight. For eg managers can better understand the impact of compensation on employee performance by co-relating compensation with employee performance • If we do not know how to measure our primary value producing asset, we cannot track it , if we cannot track it we cannot improve it . • HR Analytics includes Statistics, identifying meaningful questions, using appropriate data to answer the quest applying logic to evaluate the results, and translating the results into language that is meaningful for the business – thereby guaranteeing hr a respectable seat in the BOD…. Pune Chapter Annual Conference 2008
  • Traditional b T diti l benchmark metrics – HR OE h k ti Revenue Factor Revenue / Total FTE Expense Factor Operating Expense / Total FTE Income Factor (Revenue – Operating Expense) / Total FTE Human Capital Value Revenue – (Operating Expense – [Compensation Cost + Benefit Added Cost]) / Total FTE Human Capital ROI Revenue – (Operating Expense – [Compensation Cost + Benefit Cost]) / (Compensation Cost + Benefit Cost) HR FTE R ti Ratio Total T t l FTE / T t l HR FTE (U d t d current workforce t d – and Total (Understand t kf trends d plan future needs ) HR Investment Factor HR Expense / Total FTE HR Separation Rate HR Separations / HR HeadCount (Link the results of this analysis directly into headcount planning, budgeting) Pune Chapter Annual Conference 2008
  • HUMAN CAPITAL PERFORMANCE Single Metrics examples ACQUIRING (efficiency of your MAINTAINING DEVELOPING RETAINING recruiting processes ) Cost per Paycheck / COST Cost per Hire person & Employee Cost per Trainee Cost of turnover Assistance Programs Time to Time to fill jobs / Cost per Trainee Turnover by length TIME TAT respond/fulfill Hour of service requests Number of claims / Voluntary turnover QUANTITY Number Hired grievances Numbers Trained Rate processed Skills attained post Process Error Rate / New Hire Rating training - %age of ERROR during first week 0% defect free clear post Readiness Level salary processing assessments Manager M n ge Employee Emplo ee REACTION Satisfaction satisfaction Trainee Responses Turnover Reasons Pune Chapter Annual Conference 2008
  • Talent T l t acquisition i iti • Vendor evaluation matrix Cost per hire & TAT • Consultant v/s drop outs • TAT for each consultant • Attrition v/s consultant • Source v/s conversion S / i Level v/s source L l / • School v/s performance Salary bands each Quarter • School v/s attrition Interviewer v/s Performance, drop outs p • Source v/s location Source v/s attrition • Location v/s attrition Source v/s Cost Pune Chapter Annual Conference 2008
  • Compensation p Compensation Revenue Compensation Cost / Revenue Percentage Total Compensation Compensation Cost + Benefit Cost / Revenue Revenue Percentage Compensation Factor Compensation Cost ( CTC ) / Workforce Head Count Supervisor Compensation Supervisor Compensation Cost / Compensation Cost Percentage Executive Compensation Executive Compensation Cost / Compensation Cost Percentage Benefit Revenue Percentage Benefit Cost / Revenue Health Care Factor Medical & Medically Related Benefit Cost / Covered Employees Yearly Parity check Compensation / performance / skill / stretched goals / leadership / initiative / Market correction / relative ranking Pune Chapter Annual Conference 2008
  • Compensation and Performance Appraisals p pp • Pre appraisals pp – Competition information for market correction v/s affordability – Deeper analysis of Qualification / experience matrix – CTC increase v/s incentive pay off – Designation corrections in line with client org – Over specking jobs • Post appraisals – Per person cost – revisit sales deals – Salary banding pre and post appraisals , impact on recruitment salary bands Pune Chapter Annual Conference 2008
  • HR M t i Metrics Outcome Metrics Process Metrics Early Attrition %age Number of induction programs conducted Attrition by Level Conducted X number of employee engagement programs / communication calendar adherence 90% CSAT %age % %age adherence t R&R calendar % dh to l d Cost of hire / TAT for hire Number of colleges covered No of successors trained and ready for %age population covered for trg next level 0% defect payroll processing Approvals taken before paying out incentives / night shift allowance etc Pune Chapter Annual Conference 2008
  • Attrition Att iti • Month Qualification • Level / Band Tenure • Division / practice /vertical Manager • Reason Performance rating • Location and vertical Gender • Address Reach out reasons compared to reasons while quitting Cost of attrition Pune Chapter Annual Conference 2008
  • Training g Employees Trained Employees Trained / Total Head Count (making it a Percentage kra for managers) Training Cost Factor Total Training Cost / Employees Trained Training Cost Percentage Total Training Cost / Operating Expense Training Investment Total Training Cost / Total Head Count Factor Training Staff Ratio Total FTE / Training Staff FTE Training Cost Per Hour Total Training Cost / Total Training Hours Internal Staff Training Internal Staff Training Hours Provided / Total Hours Percentage Training Hours External St ff Training E t l Staff T i i External Staff Training H E t l St ff T i i Hours P Provided / Total id d T t l Hours Percentage Training Hours Pune Chapter Annual Conference 2008
  • Global practices p Google Identified the attributes of people they hired, having a strong positive correlation to performance Traditional attributes it was looking for in job candidates viz. prestigious schools attended & high grades were less accurate predictors of performance than things like being the Head of a Club or social organization in College, or holding a regional or world record-holder of something. They looked at alternative criteria for predicting success; criteria their competitors were not looking for. Pune Chapter Annual Conference 2008
  • Global practices p American Express Measurement is central to all HR Activities, which stretch across 83 countries world- Activities world wide. PeopleSoft was rolled out globally as its core HR system to improve data quality & consistency Everything th d i metric-attached. They use globally-consistent processes, E thi they do is t i tt h d Th l b ll i t t measurements & databases. They do things in a methodical, thought-out, consistent manner and have consistent platforms. Cap one Everyone who joins the company has to have some quantitative ability e.g. VP-HR had to take, & pass an Algebra test before being hired. Nextel If someone came to his/her Supervisor & told about another job Offer with 20% more salary, analytics were built-in for providing guidance to the Supervisor, “Do I make a better Offer or do I say good-bye?” Pune Chapter Annual Conference 2008
  • The future is hr analytics y • In the ongoing quest for greater efficiency and productivity, businesses have left few stones unturned. • Over the past decade, companies have revamped practically every business process in the search for competitive advantage. The one area that most organizations haven't targeted is the squishy world of g g q y human capital. Analytics tools are poised to transform Human Resources (HR). Pune Chapter Annual Conference 2008
  • Thank you Pune Chapter Annual Conference 2008
  • Application of analytics • Impact of compensation on employee performance by correlating compensation, employee performance and attrition metrics. • Correlation of compensation with value of an individual. p • Impact of paying OT vs. adding new workers on overall productivity. • Undergraduates v/s graduates in improving customer satisfaction Pune Chapter Annual Conference 2008