People analytics play a vital role in positioning the Head of the Human Resource Department at the management top table alongside the CEO and CFO. Below we clarify this with an example of a global fast food chain.
Human capital strategies are key to future commercial success – companies need to consider human as well as financial capital in every mission-critical decision. Transparency of operations and advanced analytics provide a unique opportunity for HR professionals to position themselves as fact-based, strategic partners to their employer. Matching people to critical roles and using machine learning to manage succession and predict employee turnover are examples of the processes facilitated by advanced analytics.
There are four ways in which people analytics creates value:
1. Understanding the workforce of the future – how do you attract the best digital talent?
2. Boosting efficiency and accuracy in core HR talent processes – making HR departments think in a data driven way.
3. Increasing the accuracy and speed of matching talent to key roles – identifying the positions that drive value in the organisation and getting the best people in these roles, which may involve recruitment or reskilling of existing employees
4. Linking talent interventions to business outcomes – e.g. Improving workforce productivity and therefore revenue generation.
Analysis of a global fast food chain’s human resources undertaken by McKinsey & Company highlights each of these benefits.
The firm collected data across the company’s talent value chain, created hypotheses and identified a number of desired business outcomes. Linking data on employees’ traits (such as demographics); environments (organisational data, compensation, training); and behaviors (frequency and duration of interactions, quality of interactions and time allocation) maximized the impact of this analysis.
The result was that McKinsey & Company was able to generate around 30 insights across different metrics from employee retention to improving the speed of service.
Having identified four different groups of employees, the firm discovered a clear conflict between the personality of the employees and the work they were undertaking. The fast food chain believed that ‘socialisers’ were the most efficient group of employees, but it emerged that ‘conservative task masters’ – who accounted for just 10% of the total workforce – had the highest KPIs.
This demonstrated that the client was recruiting the wrong type of people.
Get the balance right
The project lasted three months. When McKinsey & Company returned to the client nine months later, it found that it had flipped the balance between socialisers and conservative task masters, with the latter now accounting for 40% of new recruits. Over that nine month period, customer satisfaction doubled, staff turnover halved, speed of service improved and sales were up by 5%.
The same principles can be applied to the service desk environment to enable firms to analyse customer satisfaction and see where performance drops off.
It is very challenging to measure data from multiple touch points unless there is central repository where requests, cases and issues come into HR. By channeling requests to a central HR management solution, companies create massive quantities of people analytics data that can be monitored as part of a continuous improvement process.
Introducing case management in the form of a self-service portal rather than using email enables issues to be categorized and distributed to the appropriate support personnel.
Our advice is start modestly – there is a great deal of data that can be obtained from existing tools. People analytics has much to offer but don’t try to run before you can walk!
To hear more details about the example case and how tools facilitate analyzing data, listen to our webinar.
In this webinar, Peter Schneider from Efecte Plc and Paolo Zampella from McKinsey & Company, discuss the following questions:
- What is people analytics and what are the benefits that can be derived from it?
- When doing retention analysis, how to move from conducting in-depth but reactive exit interviews to analytics techniques that are predictive and more objective and quantitative?
- What McKinsey’s studies on retention reveal: Which factors are better predictors of unwanted attrition than the commonly intuitive things like individual’s performance rating or compensation?
- How can the service experience of employees be improved when interacting with HR?
- How can routine HR tasks be automated and work flow effortlessly in your HR department?