Bryne

HR Analytics & Predictive Modeling

From data to action based on insight…
Free Powerpoint Templates
Page 1
6th March 2012

Agenda
• Critical HR Challenges and the need for
Insight
• What is Analytics?
• Benefits of HR Analytics
• Predictive Modeling
• HR Analytics Demo

Page 2

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 talent
management strategy • Tough to measure talent acquisition effectiveness on
with 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
• No single source of the truth Page 3

Quick Poll
How many of you in this room
use

Page 4

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.

Page 5

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

Page 6

An example..
Planning System
Time 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
Page 7

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.

Page 8

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
conclusion. Page 9

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..
Page 10

Example of Analytic Workflow
A typical analytic work flow starts with a prompt
like the scorecard turning red for more than
allowable 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

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.

Page 12

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
Page 13

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
Page 14

Predictive Modeling

Page 15

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.
Page 16

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.
Page 17

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

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?
Page 19

Demo

Page 20

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, Bonus
Compensation 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, service
Recruitment 130
milestones, offers vs acceptance ratios etc.

Promotion ratios, Satisfaction measures, rehires,
Workforce Profiles 95
avg service lengths etc.

Total 400

Page 21

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.
Page 22

HR Analytics vis-à-vis typical HRMS
reporting

HRMS Reporting Analytics Reporting

Flat – 2 dimensional Multi dimensional

Individual reports which need to be Metrics go across subject areas
collated

Reactive reporting Pro-active reporting

Need to define “what to see” Pre defined Metrics based on best
practices available

Report is from a single source Reporting can include non HRMS
sources as well

Metric definition is not Metric definition is consistent across the
standardized enterprise
Page 25

Oracle Fusion Performance
Management

Page 26

Management

Page 27

Oracle Fusion Performance Management

Page 28

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

Page 29

Goal Management

Page 30

Goal Management

Page 31

Goal Management

Page 32

Goal Management

For Business Leaders
• Set direction
• Ensure alignment

For Managers
• Assign targets
• Monitor progress

For Employees
• Tie goals to what matters
• Communicate progress

Page 33

Compensation Management
Make Every Compensation Decision Count

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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

Page 37

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 individual's position in the pay range against the pay policy
reference point for the range and can be used to reposition an individual's 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.
Page 38

Attrition
Employee 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.
Page 39

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.
Page 40

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

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

Oracle Fusion Talent Review
Maximize the Value of Leadership Meetings

Page 43

Fusion Succession
Management

Page 44

Oracle Fusion Workforce Predictions
Proactively 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

Page 45

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