The Business Value of People Analytics impact - lexy martin...The Business Value of People Analytics Lexy Martin, Principal Research and Customer Value Visier . ... advantage People

The Business Value of People Analytics

Lexy Martin, Principal Research and Customer Value Visier

High-Level Business Impact of People Analytics

Bersin by Deloitte: High Impact Talent Analytics CEB Corporate Leadership Council: The Analytics Era

Sierra-Cedar HR Systems Survey

B E T T E R I N S I G H T S B E T T E R D E C I S I O N S B E T T E R O U T C O M E S

30% 6% 79% S T O C K P E R F O R M A N C E G R O S S M A R G I N R E T U R N O N E Q U I T Y

People Analytics Human Capital Productivity Value Chain

Improved workforce data for decision

making

Competitive advantage

People Analytics

Return on Equity

Structural Equation Path Modeling Conducted by Dr. Janet Marler,

School of Business, University at Albany-SUNY

Improved ability to develop

highly qualified workforce

Improved employee & manager

productivity

People Analytics Value

Journey to Value

Technology / Labor

Efficiency Value

Deploying technology cost efficiently and

reducing reporting and analysis labor costs

HR Effectiveness

Value

Making interventions from insights that make a difference to HR and

improving key HR metrics

Business Impact / Strategic

Value

Impacting business metrics that matter to

the C-level

Technology / Labor Efficiency Value

Technology / Labor

Efficiency Value

Deploying technology cost efficiently and reducing reporting

and analysis labor costs

0

10

20

30

40

50

60

70

Operator Steward Catalyst Strategist

Before Change

After Change

Changing from Reporting to Analytics Delivers Headcount Savings and Makes Analysts into Strategists

PE

RC

EN

TA

GE

OF

TIM

E

S T R AT E G I C V A L U E

Avoiding Technology Costs

Additional Data Discovery Licenses

Hardware Purchase & Maintenance

Data Warehouse Software Licenses

Data Integration Tools Licenses

Data Center Maintenance Costs

IT Administrators

Subject Matter Experts

Analysts

Software Developers

Software Maintenance Fees

Other Implementation Costs (i.e. Dashboard, Training)

LICENSE 10%

90%

VISIBLE

HIDDEN

CO

ST

S

HR Effectiveness Value

HR Effectiveness

Value

Making interventions from

insights that make a difference to HR

and improving key HR metrics

Outperforming with 13% Lower Resignation Rates

2010 2011 2012 2013 2014 2015 2016

0%

5%

10%

15%

20%

25%

30%

35%

Visier Customers

U.S. Market

Reducing Manager Resignation Rates by 30%

After two years with Visier,

customers on average are

achieving a 30% reduction in

manager resignations

Reducing turnover for key revenue-producing role

Challenges

HRMS reports did not provide meaningful insights

Analytics team spent most time managing data

Analytics team was unable to increase headcount

Results

Insights from extensive best practice HR metrics & analytics

More time for high-value analysis, without added headcount

44% reduction in turnover for a key revenue-producing role

Reducing resignations enterprise-wide by 2%, for a $12 Million Savings

CHALLENGES

• Demand for data-driven insights a support strategic workforce decisions

• Sales leaders wanted better insights about their employees

• Reducing turnover top concern of business leaders

RESULTS WITH VISIER

• “Being insight led” is now a pillar of their workforce strategy

• Sales leaders receive “transformational” insights on workforce

• Over 2% reduction in voluntary turnover globally ($12 Million savings)

Measuring the value of reduced turnover

CHALLENGES

• High cost of turnover

• Growing shortage of qualified candidates in critical positions

• Inability to talk with business leaders in terms of dollars and cents

RESULTS WITH VISIER

• Projected $15 million savings in turnover in next three years

• Reduced first year voluntary turnover from 17.8% to 15.3%

H E A LT H C A R E

S Y S T E M +

Justifying HR programs: Recruiting through University Relations

CHALLENGES

• HRMS reports difficult to produce

• Reporting environment did not allow for enough analysis

• Analytics team could not keep up with leadership requests

RESULTS WITH VISIER

• Found that new grad hires promoted at a higher rate, more likely to be high performers, and cost less than experienced peers

Business Impact / Strategic Value

Impact business metrics that matter

to the C-level

Strategic reduction in force

CHALLENGES

• Reduce workforce expenses globally

APPROACH

• Analyzed workforce by location against dimensions of revenue generated, costs, and risks

• Answered strategic question:

• Are we in the right regions in terms of cost and productivity of labor.

RESULTS WITH VISIER

• Identified geographies where a RIF would have the least impact

• Achieved the same expense reduction, but with a strategic focus

• As a result, firm is better set strategically for the future

Making the case that improving Quality of Hire can increase revenue

CHALLENGES

• Improve quality of hire to drive revenue

RESULTS WITH VISIER

• Analyze talent pipeline efficiency to understand sources that generate top performers

• Track recruiter effectiveness and recruiting program effectiveness for sourcing comparable performers

• Increasing new hire sales by $50,000 in first year could drive $37.5 million extra sales per year

Impacting product success through analyzing successful team factors

CHALLENGES

• Understand the relationships between development teams and game performance

APPROACH

• Analyze workforce and business data to discover best predictors of success for each game going to market

RESULTS

• Improve firm performance as the interactions are better understood and higher revenue, more profitable games are produced

Margin improvement in right talent / right cost project staffing

CHALLENGES

• Large professional services organizations needed to:

• Attract and retain qualified staff on an ongoing basis

• Understand the cost of people to to ensure contracts are profitable

• Respond quickly, consistently, and with agility to each RFI and RFP

RESULTS WITH VISIER

• Analyze the total cost of workforce on experience, tenure, salary and location

• Conduct scenario-based workforce planning to determine the optimum mix of consultants

• Lowered costs on consulting projects an average of $1 million each and improving margins

Revenue lift from retained staff

CHALLENGES

• Financial services organization suffered from turnover issues

RESULTS WITH VISIER

• Addressed interventions addressing pay inequities, improved manager communications, improved onboarding and ongoing development

• Revenue lift of retained staff of $200,000 per employee from ongoing development, yielding significant revenue as turnover declined

The strategic impact of safety

CHALLENGES

• Identifying the root causes of safety incidents

RESULTS WITH VISIER

• Review safety incidents across different dimensions to see what actions are needed to address potential issues

• Maintain and improve worker safety

• Contribute to cost savings by reducing insurance premiums when safety performance improves

“With Visier, we can procure other

systems and bring in their data for

analysis, without worrying about data

integration fees.”

— Head of HR Research, Statistics and

Reporting Team, City of Edmonton

Business Outcomes / Strategic Value Key Metrics for C-level Executives

Challenges Assessing corrective actions on degrading employee performance when necessary

Approach Dashboard for executives that includes a key metric of employee performance – EBITDA per employee

Results Executives can see a caution indicator and drill down to assess contributors to determine necessary

corrective actions.

Mitigating the risks of pay inequity

CHALLENGES

• Possible non-adherence to equal pay laws

• Example: Insurance company settled a pay discrimination suit at an average of $133,333 for each plaintiff

RESULTS WITH VISIER

• Analyze pay practices and discover pay equity risks before they turn into issues

• Track whether high pay is due to longer tenure, more education, or higher performance

• Mitigate risks to avoid unexpected costs, improve long-term productivity, and increase employee engagement

Visier Workforce Intelligence Summary of Value: Technology and Labor Cost Efficiencies, HR Effectiveness

T E C H N O L O G Y AN D L AB O R C O S T E F F I C I E N C I E S

BI costs avoided $2,250,000 per organization1

Savings from replacing legacy tools $336,000 per organization2

Data integration costs avoided $240,000 per organization3

HR labor cost savings $60,000 per year4

H R E F F E C T I V E N E S S

Savings from reduced turnover $15 ,354 ,640 per

10 ,000 emp loyees per year 5

Calculating the Cost of Turnover

DIRECT COSTS TO REPLACE AN EMPLOYEE

Average cost per hire

$3,976

Average first-year orientation and training costs per hire

$3,000

Total Direct Costs $6,976

INTERIM REDUCTION IN LABOR COSTS

Average annual labor costs (salary, bonuses, benefits, etc.)

$130,000

Average time to hire

X52 calendar days (14% of year)

Interim Reduction in Labor Costs

$18,200

LOST PRODUCTIVITY COSTS

Average time to hire

52 calendar days

Average time to reach productivity of lost employee

+60 calendar days

Total non-productive days

=112 calendar days / 365 (31% of year)

Average annual revenue per employee

X $390,000

Lost Productivity Costs

$120,900

TOTAL COST OF VOLUNTARY TURNOVER PER LOST EMPLOYEE

Direct Costs $6,976

Interim Reduction in Labor Costs

-$18,200

Lost Productivity +$120,900

Total Cost of Voluntary Turnover

$109,676 per lost employee

Bersin by Deloitte: Calculating the True Cost of Turnover

Visier Workforce Intelligence Summary of Value: Business and Strategic Value

B U S I N E S S AN D S T R AT E G I C VAL U E

Higher margins on professional services contracts $1M-$3M per multi-year contract6

Revenue uplift from retained employees receiving

additional training $200,000 per employee per year7

Reduced risk of pay equity lawsuit $133,333 per employee named in suit8

Workforce planning accuracy $100,000 per headcount improvement in accuracy

per year9

Justifying Workforce Intelligence Reference Material

Visier: Total Economic Impact of Workforce Intelligence

Visier: Data-driven Success Stories with Visier

Visier: Building Your Business Case for Workforce Intelligence

Sierra-Cedar: The Quantified Organization: Creating Data-driven HR

First West Credit Union: First West Credit Union Defending Against Attrition

Electronic Arts: Building a Data-Driven Culture with Workforce Intelligence

BBVA: BBVA-Compass Capitalizing Workforce Insights to Reduce Turnover

Yahoo: Yahoo’s Use of Visier Workforce Analytics Shows $2.5 Million Savings

Bersin: Calculating the True Cost of Voluntary Turnover: The Surprising ROI of Retention

Visier: Insights Report Gender Equity

Thank you Lexy Martin

[email protected]

@lexymartin

Reducing turnover of new clinical staff by 49%

CHALLENGES

• Gathering and presenting data a manual, time-intensive process

• Turnover of clinical staff a top concern

RESULTS WITH VISIER

• Based on insights

• Targeted retention of new hires

• Developed program to improve onboarding

• New hire turnover within targeted groups reduced by 49%

H E A LT H C A R E

P R O V I D E R