Introduction to HR Analytics

DR. ARUN KRISHNAN EMAIL: [email protected]

FOUNDER & CEO, PHONE: +91 9880007615

URL: HTTP://WWW.NFACTORIALANALYTICS.COM
nFactorial Analytical Sciences
TWITTER: @ARUNKRISHNAN_ / @ANALYTICSN
LINKEDIN: HTTPS://IN.LINKEDIN.COM/IN/DRARUNKRISHNAN
What is Analytics?
What is Analytics?
information resulting from the systematic
analysis of data or statistics
Since when have we been
doing analytics?
Daniel Kahnemann & Amos Tversky

What words would you choose to describe her?

Daniel Kahnemann & Amos Tversky

Solve: -5 +2 x 2 + 9 /3 - 8
Daniel Kahnemann & Amos Tversky
System 1 System 2

Solve: -5 +2 x 2 + 9 /3 - 8

READING LIST
What words would you choose to Thinking Fast, Thinking Slow
describe her? Daniel Kahnemann
So why the buzz around analytics now?

Technological advances - price / performance

Pervasive digitization

Artificial Intelligence, Machine Learning

Data has been growing at a staggering rate!

Source: www.cloudlendinginc.com
So what do we mean by
big data?
Big Data explained as 4 V’s

Source: www.ibmbigdatahub.com
What is Big Data?
“ONE BIT MORE DATA THAN YOUR SYSTEMS CAN HOLD”
So what constitutes analytics?
 Analytics is a continuum …

Prediction
What will happen?

Monitoring
Business Value

What is happening now?

Analysis
Why did it happen?

Reporting
What happened?

Low Complexity High

Past Perspective Future

...and Analytics is a journey!

Source: Applied Insurance Analytics, by Patricia Soparito

Football Analytics
AN EXAMPLE
What happened?
Why did it happen?
What’s happening now?
What could happen in future?
What do organizations feel about analytics?
Leaders identify four key benefits from using analytics
Tangible benefits mainly focus on cost reductions
and process improvements
The biggest challenges to implementing this deal
with identifying the right solutions
Updating IT Infrastructure & Data collection are
the first steps ...
...but what data do we collect?
The coming of HR Analytics!
Analytics Domains

Retail Sales Financial Services Risk & Credit

Consumer
Marketing Talent / HR
Behavior

Collections Fraud Pricing

Telecom Supply Chain Web

Analytics is coming to HR!

Source: www.bersin.com
 Why HR Analytics?

"What gets measured, "The business demands

gets managed; what gets on HR are increasingly
managed, gets going to be on analysis
executed" Measure & Return on just because people are
SO expensive"
- Peter Drucker Manage Investment
- David Foster

"Global organizations
Linkage of with workforce analytics
Business and workforce planning
"To clearly demonstrate Performance outperform all other
the interaction of Objectives to
Improvement organizations by 30%
business objectives and People more sales/employee"
workforce strategies"
Strategies
HR Dashboards - SAP - CedarCrestone
HR capability gaps are increasing
HR Analytics - Much promise - wanting in rewards?
 The HR Analytics Continuum
Attrition
Prediction

Candidate Stickability
Hiring No-shows Continuous Prediction
Prediction Employee Feedback

Hiring Fit High Performer Workforce

Segmentation Planning
Business Value

Low performer Attrition

Promotion Ratio
management Segmentation Informal Network
Analysis
Employee
Requisition Turnover Ratio Segmentation
Tracking

Payroll reports Performance

Attrition
Tracking

Accession Ratio Recruitment

Head Count Training
Engagement

Retention

Low Complexity High

Past Perspective Future

Detailed Case Study
GOOGLE
The early days - Finding the right people

Spent hours screening resumes from job portals like Monster.com

Built an applicant tracking system that checked candidate
resumes against a database of Googler resumes
Idea was to get more realistic "backdoor" references

Also looked at innovative ways to identify smart people

Finding the right people...
Finding the right people ...

The solution to the first riddle will land you at http://7427466391.com/. On this page you’ll find the following:
“Congratulations. You’ve made it to level 2. Go to www.Linux.org and enter Bobsyouruncle as the login and the answer to
this equation as the password.”
f(1)= 7182818284
f(2)= 8182845904
f(3)= 8747135266
f(4)= 7427466391
f(5)= __________
Initial Data Analysis and Insights
Analysis: Analysis revealed that academic grades did not correlate well with performance
except for first 2-3 years.

Action: Stopped asking for academic transcripts except for fresh graduates.

Google's hiring was focused on minimizing "false positives", that is, candidates who looked
good at first glance but turned out to be poor performers later.

Google's philosophy was that they'd rather lose two "good candidates" than hire a "bad one".

Result: Their hiring took a long time - 250,000 hours to hire 1000 people/year

125 people working full-time were required to hire just 1000 people.
Using Employee Referrals
In the early years "referrals" were their best source of candidates.

At one point >50% of hires were from referrals!

Problem: However, by 2009, that rate started to fall.

Action: Google increased the reward for successful referrals thinking that it would help to
bring up the referral rates.

Analysis: They found however, that this brought NO change in the decline.
Employee Referrals

• Why was this?​

• Referral bonuses are "extrinsic" motivators.​
• Their analysis found that people referred due to
their pride in their workplace ("intrinsic" motivator)​
• Why do you think that was?​
• https://www.youtube.com/watch?v=u6XAPnuFjJc
Cultivating the best people

Problem: Exhausting Employee Networks

Action: Started using aided-recalls
Result: Volume of referrals increased by
33%!
Cultivating the best people

• Problem: This still left them needing ~300,000 referrals per

year whereas they got <100,000 even during their best
years.​
• Analysis: Realized that the very best people are not looking
for work. They are happy.​
• Action: Rejigged their staffing team and equipped them with
a home-grown tool called gHire to cultivate people across
different organizations.​
• Sometimes for years!​
• Result: >50% of Google's hires are found by this in-house
team!
Hiring the best people
Problem:

People during an interview make up their mind in the first 10 seconds

Rest of the interview is spent finding corroborative evidence

CONFIRMATION BIAS!

Analysis: [paper by Frank Schmidt & John Hunter]

Most interviews are unstructured.

Unstructured interviews can predict only ~14% of an employee's performance

Work sample test predicts ~29% of performance

General cognitive tests predict ~26% of performance

biased towards white males (at least in the US) !

Structured interviews were found to be as good at predicting performance as cognitive tests

Hiring the best people
Action: Use a combination of behavioral and situational structured interviews with
assessments of cognitive ability, conscientiousness and leadership

Identified key attributes essential for "Googleeyness"

Consistent scoring mechanism that allows people to compare across interviewers.

Analysis: What should be the number of rounds of interviews?

Found that 4 interviews were enough - "Rule of Four"

Down from ~25 interviews

Result: Changed median time to hire from 90-180 days to 47 days!

Revisit assumptions - Then test!
Revisit Common Score resumes Test
program Keywords
• Feed • Assess • Score • Score
resumes of common keywords resumes
all past keywords based on over next 6
candidates found their months
through occurrences against
algorithm in rejected weighted
vs keywords
successful
resumes

Looked for people with high scores who were rejected

2010 - ran 300,000 rejected candidates through the system

Filtered 10,000 and chose 150

Hit rate of 1.5% > 0.25% - Google's hit rate

Simplicity is the ultimate sophistication!
Maersk Examples
Maersk Drilling – Example 1

• Experienced considerable variance in performance between various drilling rigs

• Management wanted to identify

• What explains variance in performance between rigs?

• How can that knowledge be effectively deployed for new rigs brought into
operation?
• How can this lead to customer satisfaction?
Maersk Drilling – Example 1
Maersk Drilling – Example 2

• Experienced challenges filling lead specialist

positions
• They had a strategic initiative to develop technical
talent in house
• Took a look at their data from this initiative vis-a-vis a
peer group (control group)
Maersk Drilling – Example 2
 nFactorial
Driving Employee Experience through
everyday moments of truth!
Customer moments of truth are critical to an organization's success

Ultimate
Stimulus Zero moment of First moment of Second moment moment of
Truth Truth of Truth Truth

Awareness Social Discovery Consideration to Experience Shared

Purchase Experience
Employee touch points dictate employee experience

HYGIENE
ATTRACT
• Policy
• Worlk environment • Career Site
• Infrastructure • Social Media Strategy
• CSR • Recruitment Advertising
• Health & Wellness • Job Description
• Hiring Process

RETAIN ENGAGE
• Leadership • Onboarding
• Rewards & Recognition • Cultural Connection
• Performance Management • Internal Communications

TRANSITION DEVELOP
• Learning
• Exit Process
• Development
• Mentorship
• Career Opportunities
Employee Experience becomes even more critical in the future with

Millennial Workforce Rapid Digitization Self-managed Teams

These require data-driven decision making on a real-time, continuous basis

Employee engagement leads to competitive advantage

#1 Priority for US - $550 Billion

CEOs* Productivity Loss**

** Deloitte Human Capital Report – 2015

*Gallup State of the American Workplace – 2013
Organizations understand that a 1%* decrease in employee engagement
can lead to...

Decreased Increased Decreased Customer Decreased Revenue &

Productivity Attrition Satisfaction Profits
~ 20% ~ 7% ~ 1% ~ 2%

*Gallup Estimates
Current systems are broken and do not allow organizations to...

Identify issues at the Take the right Assess impact of

appropriate time actions interventions
n!Gage enables organizations with real-time,
actionable insights to drive high performance
Mobile first Real-time analytics
Assess managerial
Real-time notifications Assess Strengths & Weaknesses strengths &
weaknesses
Mood-based Sentiment Insights

LISTEN UNDERSTAND Qualitative Themes

Textual feedback
Identify workplace
issues proactively
360o feedback

ACT
Intervention Assessment

Prescriptive Solutions Act on insights and

measure impact
Action Planning
And much more!

 Uncovering Strengths &

Weaknesses

 Employee Segmentation

 Contextual insights

 Comparative analysis

 Predictive models
 5 Year Vision – Become an end-to-end Employee Experience solution
provider

Continuous Performance Continuous Organizational

Feedback Feedback
Linked to organizational KPIs, Attrition & Real-time, continuous organizational
Performance Predictions feedback from employees

Employee Wellness &

HR Interventions
Health
n!
Link employee health through Function / Division-specific interventions
wearable devices to engagement
Gage
through HR Consulting partnerships

Training &
Development Peer – to – Peer Recognition
Link organizational training
Enable peer-to-peer recognition linking it to
needs to content
organizational and performance feedback
Customer Use Cases of n!Gage
Deliver Service Excellence,
Retain Superstars, Build Engage Millennials,
Build and Sustain a Culture of
Competitive Advantage Boost Sales and Profits
Health
• Large IT Services Co. • Large Retail Group with • Business services with 100+
with 7000 employees 40,000 employees customers

• Goal • Goal • Goal

Deliver experiences to Deliver experiences to Deliver great service experiences,
drive innovation & engage millennials and boost brand equity and drive
performance drive growth growth

• Outcome • Outcome • Outcome Increase

Increase in engagement Decrease in attrition levels; in operational effectiveness
levels Predict churn
• Implementation
• Implementation • Implementation Initial rollout
Proof-of-Concept Rollout to 5000 members
So how do organizations go about
becoming Analytics Savants?
My 10 steps
1. Identify business champions
2. Start with the question in mind
3. Carve out a bite-sized chunk
4. Set clear boundaries on outcomes
5. Get the data required for your question
6. You will never get perfect data
7. Show quick wins
8. Bring together critical data
9. Look for specific solutions
10. Replicate across the organization
 Thank You!
ARUN KRISHNAN

EMAIL: [email protected]

PHONE: +91 9880007615

URL: HTTP://WWW.NFACTORIALANALYTICS.COM

TWITTER: @ARUNKRISHNAN_ / @ANALYTICSN

LINKEDIN: HTTPS://IN.LINKEDIN.COM/IN/DRARUNKRISHNAN