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

1. HR Analytics
21st November 2008
Kavita Kulkarni
Pune Chapter Annual Conference 2008

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. Thank you
Pune Chapter Annual Conference 2008

17. 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