table of contents
in 01 Analytics HR
in 02 Analytics HR- II
03 is fun!
ANALYTICS IN HR
WHAT IS HR ANALYTICS AND WHY IT IS IMPORTANT?
HR Analytics refers to the recruiting methods in which decision making and planning is based on the data acquired about the people working in the organization. People have a direct impact on the growth of the business. Thus it becomes essential to hire and retain the best talent pool for the organization. These HR decisions are increasingly being supported by the data and its analysis. New data sources like LinkedIn and Glassdoor are emerging that provide all employer, no matter how small or big, access to valuable big data to help HR teams identify and assess the best candidates. It allows companies achieve healthier responses to their jobs postings based on factors such as duration, location, occupation, and industry which have positive impacts such as reduced time-tohire, better quality of hire, decline in attrition rate and decreased hiring cost, etc.
Some HR departments may be resistant in using data-based approaches because of the fear that they undermine their expertise, but they can actually leverage data to find inconsistencies, patterns, extravagant spending by collecting recruiting & hiring data that can be correlated with business outcomes such as increased revenue avoiding any unconscious biases. Spotting trends with analytics can significantly help in tracking and measuring recruiting decisions.
HOW FIRMS CAN USE DATA TO TRANSFORM HR Analytics not only enables HR departments to identify and profile top performing employees but also help in finding candidates that take shortest to hire, fastest to onboard, require the least money and stay longest with your company. A datadriven decision making culture is pigeonholed by collecting data, analyzing information, and conducting tests. Collection of data may include channels like newspapers, headhunters, social media campaigns, online job sites, and LinkedIn searches. The exquisiteness of data is that it let you test your recruitment channels & measure their success rate in much more accurate ways. Organizations can use quantitative and qualitative data to build a detailed map of the stock of talent in a particular locale, to better visualize talent pool availability and employability; talent pool size and fresh graduate supply; skill pool by industry; and trends and forecasted reports for future supply expectations. Three major types of talent-related information that can be analyzed: 1. People data like skills, demographics, and engagement. 2. Program data like adoption, attendance, contribution in training and development and leadership programs, and outcomes of critical projects and assignments. 3. Performance data like performance ratings and information captured from the use of instruments
HR personnel can conduct sentiment analysis on interview and survey responses and social media posts to know the brand value from the employer's perspective. Short, anonymous pulse surveys can suggest, how likely employees are to recommend the company to others, to get a sturdier sense of how theyâ€™re feeling throughout the year. Correlate resignation with factors such as promotion wait time, pay increase, commute, performance, attendance, employee development, while cross-referencing attrition variables with historical data and past resignations to see which indicators are the most relevant. Analyze the characteristics, tenure, work experiences, and managerial connections of top performers, leveraging findings to grow future top talent. Analyze the promotion rates, lateral moves, promotion wait times, and internal hiring rates of top performers to determine whether you are using the tools of opportunity to retain and maximize performance. Analyze turnover, succession planning, and business opportunity data to identify potential talent gaps, shortages or excesses of key capabilities long before they happen.
Various forecasting simulations based on economic scenarios and historical demand will help the business remain flexible over time and realign with changing needs. 4 steps can provide an edge on recruiting decisions as outlined below Encourage a culture of data-based decision making Identify a question you want to answer Collect the data Interpret the results and take action
6. Selection ratio- The selection ratio refers to the number of hired candidates compared to the total number of candidates 7. Cost per hire- Total cost invested in hiring divided by the number of hires 8. Application completion rateCompletion of details on job portal depicting the easiness while applying for a job
IMPORTANT MATRICES FOR DATA DRIVEN DECISIONS Recruiting metrics are evaluations used to track hiring success and optimize the process of hiring candidates for an organization. Various matrices can help in making decisions such as time to hire, cost to hire and quality of hire. 1. Time to hire- Calculated by the days between the moment a candidate is approached & the moment job accepted by the candidate 2. Source of hire- Sources which attract new hires to your organization. e.g.-job boards, the company’s career page, social media, and sourcing agencies. 3. Quality of hire- An indicator of the first-year performance of a candidate 4. Candidate job satisfaction- A low candidate job satisfaction highlights mismanagement of expectations or incomplete job descriptions. 5. Applicants per Opening- It gauges the job’s popularity among the talent pool
NEWEST TRENDS Soon, the one-time’ analytics will turn into ‘real-time’ analytics, and various measures will be evaluated on a continuous pulse basis after short durations. Many firms consider hiring new talent from best sources as the best option to increase the productivity and profitability, which might not be true always, in fact, the real-time data can be used to identify the pain points of the current workforce to help bridge the gaps. Also, using data for improving the competencies of the workforce would be monitored to make sure that the training and development programs are heading in the right direction. This will bring transparency into the PMS system as well so that HR could quickly identify the current position of the employees in terms of performance. Managing talent that brings value to the company is of utmost importance as it can build a competitive advantage over other firms fighting in the same arena.
It is quite evident that how the quality and volume of data will change drastically, and it will undoubtedly require the use of some most advanced and newest tools for data modeling and its analysis. Models that would determine future workforce need, best employee policies, career progression models will unfold the whole new world of perspectives to look at the results and crafting solutions based on that. What makes the Analytics in HR complex is the fact that it is not easy to predict human behavior. Many models may be able to find the possible correlation between variables assuming other aspects to be constant. However, this is mostly not true in the real workplace where multiple factors, both internal and external, are into play, which affects the mood and productivity of the employees. Nevertheless, things such as payroll, reimbursement, attendance could be easily automated and would generate quite a clean data trail. Things which are meant to be handled by humans would then be left to humans for in-depth analysis of the critical aspects of the business that are a direct or indirect impact of improvement in Human Resource Management.
IMPACT OF PEOPLE ANALYTICS HR departments are progressively being asked to justify their choices based on measurable outcomes providing as a push to decisions to be made based on analytics and data rather than using gut instinct and subjective judgment. HR Analytics is primarily designed to address issues in finding and attracting the best talent, but it can be difficult provided inaccurate, inconsistent, or hard-to-access data requiring too much manual manipulation.
According to a survey, 47% believed the most significant obstacle was- â€œlack of analytic acumen or skills among HR professionals.â€? On average it requires 29 days to hire a referral as compared to 45 days through any career site, a very significant result of HR Analytics suggests. According to HBR, the ability to recruit the best talent increased by 50% due to the advent of People Analytics. On similar lines, attrition rates decreased by 35%, performance increased by 20%, revenue per employee improved by 4%. Predictive Analytics in recruitment enhances the quality of the hiring process, provides intelligent and efficient sourcing and results in faster and targeted hiring.
CONCLUSION Analytics is now a crucial driver in the overall hiring procedure, significantly redefining recruitment practices which bring together multidisciplinary skills, and cultivate a long-range plan to “datafy” HR. The ability to create algorithms from unemployment rates, growth indices, GDP, turnover numbers, and other trends to evaluate the future needs for HR teams resulted in developing strategic ways to improve the effectiveness of a company’s talent acquisition function to align with the business goals.
Technological solutions alone will not make an HR department successful; critical thinking that algorithms can’t replace, require smart individuals to use their expertise to sensibly assess the quality and value of the data being collected, to contextualize & find workable results from the analysis, and to decide how the results should be best turned into action using multiple methods and tools with amalgamation of business acumen in order to get hold of value from analytics. A successful HR department recognizes its business, understands its people challenges and aligns its analytics and technology initiatives to those challenges, for the betterment of the organization.
Abhishek Gautam -IIM Shillong
ANALYTICS IN HR “HR ANALYTICS IS THE SYSTEMATIC IDENTIFICATION AND QUANTIFICATION OF THE PEOPLE DRIVERS OF BUSINESS.” – HEUVEL &BONDAROUK, 2016 Introduction: In this fast changing world with every technology getting obsolete within few years of its inception, people need to pace up to remain relevant. And that applies to HR functions also. Gone are those days when HR used to only take care of Recruitment, Onboarding, Learning and Development, Compensation and Exit. In the past HR was treated as liabilities of the organization since they were not involved in revenue generation directly. But in today’s world no organization can afford a non-revenue generator entity. And there are plenty of opportunity in HR functions where by applying technology, data driven approach HR can contribute in generating revenue and cut down losses. Yes, you are reading it right. HR can actually talk by numbers.
1. Operational reporting The first stage is to understand and reflect on what happened in the past by using historical data and drawing conclusions from that. For example by using misconduct data trying to understand what are the departments having most number of misconduct.
2. Advanced reporting Once the analysis of historical data is done we can move further and proactively collect more data, add more variables, automating the data collection process and trying to figure out the relationship between variables. For example by doing an employee satisfaction survey, we can figure out the relation between employee satisfaction and turnover.
3. Strategic analytics When we have enough data and enough variables we can start building some casual models. Analysing the reason behind some actions. For example assessing drivers of turnover.
4. Predictive analytics Let’s discuss how. Analytics is the new buzz of the city. Other functions are using it efficiently for quite some time, whereas for HR it’s not that much prevalent. But many big corporate giants have started using it and slowly we are moving towards that era. There are four steps/path of analytics and no one can directly jump to the final stage. The path is as follows:
The highest level of the HR analytics is defined by making predictions. In this level we gather data and use it not only to predict what will happen in the future, but also to plan for it. It is actually predictive and prescriptive analytics. Example can be making a model to predict which employees can leave the organization in next 6 months, the reason behind it. So that management can take preventive measures to reduce the churn. Now let’s see how HR analytics can be used in different HR domains.
1.Recruitment: In selecting recruitment source analytics can be applied. By collecting data of offer drop of each recruitment channel we can choose cost effective recruitment channels. 2.Selection: Along with interview, HR can apply predictive models which can predict the performance in next 1 year of the candidate in the time of recruitment by using different independent variables. That can’t be a hard and fast rule of selecting a candidate but can be used as helping tool in case of similar profiles.
4. Learning and Development: We can analyse training efficiency by obtaining data such as performance improvement, test scores, and upward transition in employees’ roles in the organization after training.
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3. Offer acceptance rate(Hit Rate): It is the number of accepted job offers divided by the total number of job offers given in a period. A higher rate indicates a good ratio. But in case the ratio is low, data can be used to redefine the company’s talent acquisition strategy.
Also we can analyse the need of training individually so that it can be aligned with organization goal along with helps to motivate employee as it helps in their career growth.
pay scale, performance rating, and past attrition rate and reasons. ·
Determine effectiveness of various internal and external training and development programs to address skill gaps and employee development.
5. Turnover rate: Voluntary turnover occurs when employees voluntarily choose to leave their jobs. It is calculated by dividing the number of employees who left voluntarily by the total number of employees in the organization. This metric can lead to the identification of gaps in the employee experience that are leading to voluntary attrition. 6. Misconduct: The historical data of misconduct can be analysed to get idea about which category is more prone to misconduct and also if there is any training which is able to lessen the number of misconduct. 7. Absenteeism: Absenteeism is a productivity metric. We can intervene and observe the relation of absenteeism with productivity. Absenteeism can offer insights into overall employee health, employee happiness, job satisfaction and sometimes can be reason of churn.
Tools for HR Analytics: There are many tools available in the market. R, Python are among the most popular ones in today’s market.
So far we discussed about where all HR analytics may be implemented and also why should HR need analytics to sustain in this competitive era. Now let’s see how this is done. Generally we follow 5 steps for doing any analytics project. These 5 steps are known as OSEMN Pipeline.
8. Performance management: HR analytics can detect potential mistakes and flaws in work and that feedback can increase productivity. This is important as Glassdoor’s research revealed that even a small increase in performance can contribute to company’s profit by almost $2.5 thousand each year. This is not an exhaustive list, there are many more areas where we can use analytics. Some of the torchbearers in industry are: 1. Google is using HR analytics in many HR domains. “Project oxygen” research analysed internal data and determined that great managers are essential for top performance and retention. It further identified the eight characteristics of great leaders. The data proved that rather than superior technical knowledge, periodic one-onone coaching which included expressing interest in the employee and frequent personalized feedback ranked as the No. 1 key to being a successful leader. ·
Google’s PiLabhas conducted applied experiments within Google to determine the most effective approaches for managing people and maintaining a productive environment ·
Google has developed a mathematical algorithm to proactively and successfully predict which employees are most likely to become a retention problem. ·
Unlike most firms, analytics are used at Google to solve diversity problems. ·
Google developed an algorithm for predicting which candidates had the highest probability of succeeding after they are hired. 2. Tata Consultancy Services (TCS) has presented human capital analytics offering - hcACE (Human Capital Analytics for Competitive Edge) ·
Analyse the root case and reduce payroll cost by improving error-free-first-time payroll payments, reducing manual processing, check bounces etc. ·
Detect the key attributes that drive employee productivity, including monitoring of employee morale, attrition causal analysis and trends. ·
Predict top performing employees who may be at risk by analysing across different dimensions including job tenure, ·
OSEMN Pipeline (pronounced awesome): 1.Obtaining the data is the first approach in solving the problem. Data can be obtained from different sources like historical reports, dashboard, employee survey. 2.Scrubbing or cleaning the data is the next step. This is the most important and tedious task. Without a good data model can’t be built and we will end up with poor accuracy. Data imputation of missing or invalid data and fixing column names, removing spaces are some of the ways to clean data. 3.Exploring the data is allowing further insight into what our dataset contains. Looking for any outliers or weird data by box plot. Understanding the relationship each explanatory variable has with the response variable resides here and we can do this with a correlation matrix for continuous variable and information value, Weight of evidence for categorical variable. 4.Modelling the data includes obtaining the predictive power and validating the model with various parameters with different sets of data. 5.INterpreting the data is last.With all the results and analysis of the data, we come to conclusion and try to prescribe something.
Intuition vs Analytics: Decision making in HR was predominantly reliant on Intuition and still some HR managers are resistant to accept analytics in it’s place. They want to rely upon floor news and gut feelings to assume who may leave than a model which is predicting the same. But gut feelings is like a toss of a coin. The probability of accuracy is 50%. So if the model is giving more than 50% accuracy then we can obviously come to conclusion that analytics is better than intuition. And with good data, more significant variables 70-80% accuracy is achievable. And that will make life more simpler for HR. In board meetings they can actually talk numbers if they follow analytics instead of intuition. As Stuart McDonald, CMO at Fresh books says, “Time and money are your scarcest resources. You want to make sure you’re allocating them in highest-impact areas. Data reveals impact, and with data, you can bring more science to your decisions.” References: 1. How To Work Through A Problem Like A Data Scientist by Jason Brownlee 2. The 8 HR Analytics Every Manager Should Know About by Bernard Marr 3. How Google Is Using People Analytics to Completely Reinvent HR by DR. JOHN SULLIVAN 4.http://info.tcs.com/rs/tcs/images/hcACe_Human_Capital_Analytics.pdf
-Alolika Roy (Student, 2nd Year, Dept. Of Human Resource Management, IIT Kharagpur) (Former Sr. Test Engineer, Infosys Limited)
Because HR is fun! -Soumya Kushwaha
One can argue that dealing with people is the most dynamic of all jobs and therefore invariably can be made fun, exciting and innovative. Here is a hilarious, and interesting read of the various dimensions of this vertical that lend it the air of excitement it possesses. Let us start with interviews. There are many companies such as Google, Apple etc. that are known for their excellent interview design and conduct thereby ensuring the recruitment of the best of brains all across the globe. Here is a snapshot of the some of the unique interview questions being asked: 1. If you were a box of cereal, what would you be and why? – Bed Bath & Beyond 2. How lucky are you and why? – Airbnb 3. If you were 80 years old, what would you tell your children? -McKinsey & Company 4. You’re a new addition to the crayon box. What color would you be and why? – Urban Outfitters 5. If you were a pizza deliveryman, how would you benefit from scissors? – Apple
If you read carefully, there are some interesting observations that you can note: by asking creative, un-conventional questions, hirers are better able to test innovative mindset, independent thinking, maturity, thought process and stress handling capabilities of interviewees by posing such questions that they could not have prepared for in advance. The most difficult part of an HR job entails handling employees’ inefficiencies by distinguishing between their genuine excuses and fake excuses. Following is a list of interesting, sometimes unbelievable excuses people have used at workplaces: 1. Cozy Parking: Employee got late because he fell asleep in the car when he got to work 2. Climax rush: Was watching some show whose ending was critical to watch 3. Memory loss: Forgot that the company’s office has been relocated 4. Feline shenanigans: Pet cat got stuck in the toilet 5. Blown night: Woke up on the front lawn of a house two blocks away from home.
Framing and implementing HR policies is an integral part of any HR manager’s job. With a little smartness and a lot of logic, one can easily frame these policies in a way that the employer gest what he wants from his employees without leaving any cause of complain with them. Now let’s have a look at some innovative ways of framing HR policies: Pay Hike: If an employee wears good branded clothes, she is financially well and hence doesn’t need a pay hike; if she wears poor clothes, she needs to manage her finances well and hence doesn’t need a pay hike; if she wears clothes in-between, she is exactly where she needs to be and hence doesn’t need a pay hike. Sick Leaves: If an employee is able to produce a certificate of illness by visiting the doctor, she is not really sick and hence doesn’t need any sick leaves. Personal days: Allowing 104 personal days is the company’s policy. These days are called Saturday & Sunday!
Innovation- One has to be innovative when dealing with people. Take motivation for example, everyone agrees to that fact that it’s utmost important to keep employees motivated in order to get them to deliver good quality performance. Monetary incentives can act as motivator for some but for the rest, the HR manager needs to devise innovative ideas to motivate. Even those who get motivated by monetary incentives will cease to be so after a point in time and then, the manger will have to think of innovative ways to motivate and retain them. This becomes extremely relevant in today’s era of high competition for acquiring and retaining good quality talent.
Keeping the regular fun things aside, there are many other reasons why HR professionals are proud of their work and contribution. Their passion and dedication towards their work goes a long way in ensuring that others are able to perform to the best of their capabilities. From taking care of employees’ needs to scheduling important meetings, training programs, hiring and review processes, they remain on toes to provide necessary lubrication to the machine called ‘organization. They encourage employees to keep pushing their boundaries and accepting new challenges and facilitate an environment of positivity to help them reach newer heights. Following is a list of reasons HR professionals often quote when asked about their love for HR as a career field: Dynamism- The very fact that one deals with people makes the work dynamic. The issues might remain the same but the way to deal with them varies every time because something that worked with person x might not work with person. Moreover, there is always room for improvements happening in the field and with that the adoption of new methods. For example, in contrast to the previous methods of hiring through restricted channels, many new channels of hiring have emerged now such as LinkedIn. Similarly, the skill sets required in the employees of the future are going to be significantly different from those required in the past and therefore, there arises a need to arrange for relevant training and development programs and keep improving them as per changing needs.
Continuous growth- There is immense scope for growth and development in this field. From manual processes to digitised processes and further upgradation in the softwares being used for managing the hiring, selection, training and evaluation processes many aspects of improvement have been witnesses. Additionally, HR professionals bear the responsibility of maintaining cutting edge workforce equipped with the knowledge of latest industry practices in order to stay ahead of the game. This automatically involves huge scope for their own growth. Apart from this, there is regular career progression that takes care of their professional development.
Help and cooperation- HR is the profession of help and cooperation. People who like to help others and spread cooperation around find this field to be the best for them as it allows them to work on people’s problems together and figure out mutually acceptable solutions that lead to everyone’s growth and development. It involves building relations that help sustain the organization by aligning individual goals in line with the organizational goals to ensure that employees do not have to compromise on their personal development goals in the rush of doing what is best for the organization. Therefore, HR professionals often have a balanced personality and favor their work of proliferating cooperation and harmony.
Learning opportunities- HR professionals get to meet a lot of people by virtue of being directly involved in the processes such as hiring, training, performance evaluation etc. This opens up a sea of opportunities to learn as the best form of learning is to interact with people of knowledge. Moreover, they also get to travel as a part of their job which is another major learning opportunity for them. Impact creation- Although not quite apparent on the surface but if one digs deeper, one would realize that the work of an HR professional creates significant impact in any organization. First, hiring excellent employees ensures that the organizations perform to the level of perfection and deliver performance above the industry standards. Second, through frequent arrangements for required training and development, they achieve dual benefits for the organizationensure employee retention by keeping him/her relevant and stay ahead of the game by adopting newer technologies and methods the first. They devise relevant HR policies to keep the employees pumped up at the workplace and ensure that they deliver to the best of their capabilities. Through constant performance evaluation checks, they ensure that the workplace comprises of people who are ready to put in real impact creating efforts and get rid of shirking nature of employees by keeping them on their toes.
Flexibility- This is an added advantage for anyone working in this field. By the very nature, HR is a flexible field- people keep changing and therefore the policies and processes designed for them also need to change. To some, this might seem challenging as there appears to be a lack of static systems in place but some enjoy this kind of fluidity as it gives them room for experimentation and constant improvement. The hiring processes today have so evolved that they attempt to completely simulate the actual workplace setting and seek to assess candidates accordingly to get the nearest depiction of how a candidate is likely to perform at the actual workplace. This is particularly common for hiring by the professional service firms such as Consulting and Law. Connection- This appears to be the biggest motivation for the people working in the HR field as typically those who enjoy dealing with people, spending time socially and enjoy people’s company tend to be in this field. Thus, when they get to interact with a lot of people regularly as a part of their job, they truly cherish and appreciate it. Lasting friendships, constant inspiration from surrounding people are other added benefits they seek by being HR professionals.
PURPOSE OF ANALYTICS -GAURAV BOHRA (IIM ROHTAK)
The fundamental use of analytics is to predict the future. Decision on future events has to made well in advance and analytics helps the managers to take such decision based on the intelligent information gathered from various data. Businesses now a days cannot afford to take decisions just based on assumptions and guts because of fierce competition and different regulations, analytics plays a vital role in driving organizations towards better decision making
Role of Analytics in HR HR analytics is described as amethodology to exploit human resource data maintained by an organization to measure the direct or indirect effect of HR operations on chief business outcomes It helps HR to comprehend the dynamics of the workforce and to reach at meaningful insights Unlike before HRs cannot rely on gut feelings or experience. One has to base decision on real data and numbers. This has proved to add value and improve workforce resource utilization
Types of analytics a.) Descriptive Analytics Descriptive analytics coverts the raw data into understandable form. They describe and event which has occurred in the past, and using that past data a pattern can be drawn and future decisions can be taken based on such data. This is the most used analytics type used across different organization b.) Diagnostic Analytics Diagnostic analytics and descriptive analytics go hand in hand. It is an extended version of descriptive analytics. These tools are used to go depth in a situation and find out the root cause of the problem c.) Predictive Analytics Predictive analytics is used to forecast trends based on current events. It uses many interdependent variables to predict a trend. It also makes use of machine learning techniques and statistical algorithms to make predictions
d.) Prescriptive analytics Prescriptive analytics explains the step by step process in a situation. For example, a uber driver gets his route from google maps
Use of Prescriptive analytics in HR It allows corporates to recognize high risk employees and build profiles of those who are most likely to stay or leave It helps in reducing vacancy cost It helps in identifying factors relating to voluntary termination, absenteeism, and other risks
Views of experts on HR analytics a.) Employee experience is equivalent to customer experience HR analytics with the help of past recorded data helps in finding different need of the employees. Needs of employees vary at different level for example, what a shop floor employee desire is may not be same as what a senior level employee desire. It is very important to find out the specific need of an employee in order to satisfy their needs. We can only expects our employees to serve our customers best when they are themselves satisfied. Studies shows that a satisfied and happy employee serve more values to customers as compared to a unsatisfied employee. Many organizations calculate customer lifetime value in order to provide them with better services and earn more profit from them, on a similar line there is a need to identify employees lifetime value. b.) Future of analytics in HR Analytics is the future not only in HR but every business domain as it is giving managers an insight about the future based on which they can make smart future decisions. People will relevant skills in HR will be required to handle the process as th world is moving towards speedy advancement and use of AI, people who can manage those AI machine and processes will be required. Currently the number of organization using HR analytics is only 7-8% but will increase gradually in the near future
Forecast using trends
ARTICLES ON ANALYTICS IN HR, ITS PURPOSES AND WHY HR IS FUN.