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- 1. How well do you know your workforce? Introduction Analyticmaturityisajourney Talent Management can be defined as A The use of analytic techniques can vary greatly conscious, deliberate approach undertaken to across organizations and it usually evolves over attract, develop and retain people with the time, as the trends become more established and aptitude and abilities to meet current and future more widely embedded into best practice. The organizational needs. But effective talent journey into analytics can start with simple ad-hoc management goes beyond merely attracting, reports to investigate specific issues that can developing and retaining talent; it extends to influence business performance, for example the optimizing the performance of existing and relative performance of Sales Managers in a given potential workforce, whilst maintaining good quarter, or the staff turnover figures by standardsofemployeesatisfaction. department. In order to effectively manage something, it has to As organizations develop more mature be properly understood. This is because approaches to analytics, it is common to see the understanding is an important prerequisite of emergence of regular reports, typically used by management. Analytics is one technique in which the Management team to make business something complex can be comprehensively decisions. Periodic reports inevitably require understood with clarity. It is a technique from some up-front decisions as to which data to which important insights can be obtained for include. Therefore it is common to see reports on continuousimprovement. headcount, staff turnover, remuneration, performance, and other basic parameters. Whilst these reports can provide useful insights for business decisions, their pre-defined nature means that there may be more risks and opportunities that the organization will not easily capture,atleastnotuntilthesefactorsstarttohave a measurable impact on the business performance. Director of human capital consulting (South East Asia) for Deloitte Consulting How well do you know your workforce? - By Mario Ferraro Analytics n. The systematic computational analysis of data or statistics. (Oxford Dictionary) By Mario Ferraro
- 2. The more advanced organizations use analytics techniques to test hypotheses. For example, if clear correlations were found between employee training and productivity, it could be possible to test whether an increased expenditure in training couldresultintobetterprofitmargins. With increased levels of sophistication and adoption, analytic techniques can be used for Thisiterativeapproachissimilartotheoneusedby predictive modeling. Having understood how doctors, who start from the patient's statement of various aspects of the business can affect each the symptoms and then gather all information other, analytics can be used to understand the and data to reach a diagnosis. Doctors often likely impact of making certain decisions. Using recommend a comprehensive range of tests in these techniques, organizations could in theory order to understand the root causes of the make better investment decisions regarding, for problem. Based on the insights gathered through example, training, headcount or salary the tests, the doctors will determine a diagnosis increments, by simulating how such decisions and prescribe an appropriate course of action. could influence the performance of the business The condition of the patient needs continuous andoftheemployees. monitoring for a while, to determine whether the prescribedtherapywaseffective. Whilst it may be tempting to think of analytics as a one-time exercise to address specific issues, the An organization can be thought of as a system best organizations recognize that analytics is an with several parts. The overall performance of the on-going process that should ideally be organization will depend on the collective embedded in the organizational culture. The individual performance of its parts or starting point is a clear articulation of the critical departments. Analytics will show how each part workforce issues that the organization in trying to affectstheperformanceoftheentireorganization. tackle. For example, in knowledge-based industries, talent attraction and retention are It is important to understand how analytics common concerns that can significantly affect techniques are different from HR metrics. HR shareholder value. Once the issues have been metrics are numbers or ratios which express the articulated, all available data can be leveraged to value of a specific parameter at a given time. In a gain deep insights into all possible factors that sense, HR metrics are like the numbers on the could directly or indirectly affect the issue. Today, dashboard of a car, which provide an indication of fast processing times and inexpensive data whethereverythingisoperatingnormally. storage make it possible to store and process large volumes of data in a very short time. The analytics Analytics,ontheotherhand,providesinsightsinto insights will reveal useful information regarding how a variety of dynamic variables interact with possible risks and opportunities for performance each other to produce the measurable outcome. improvement, based on which an action plan can In the HR context, analytics can describe how be developed. However it is important to various factors work together to affect employee continue the cycle, to monitor the effectiveness of behavior. Hence, analytics provide a detailed view the action plan and to make the necessary ofwhatHRmetricsonlysummarize. adjustments,ifrequired. Forexample, theHRmetricsforstaffturnoverwill Theanalyticscycle Metricsvs.Analytics How well do you know your workforce? - By Mario Ferraro Analytics is an on-going process that should ideally be embedded in the organizational culture.
- 3. Inductive and Deductive Applications of Analytics inTechniques TalentManagement There are several benefits of this kind of periodic inductive research. For example, analytics on one companyshowedthatitwascommutingdistance that represented the most influencing factor on employee satisfaction. Knowing the most influencing factors will play a big role in decision making. The more knowledge the organization hasthebettertheirdecisionsare. There are a number of approaches to performing analytics: the most commonly used are the There are several applications of analytics in the deductive and inductive approaches. The field of HR. One application is safety, looking at deductive approach starts with making some issues such as workplace accidents and factors assumptions, or hypotheses, regarding influencing them like, for example, too many relationship between two variables. An example night shifts.There is also research done in the field of a hypothesis would be that increased training of diversity and how diversity affects team leads to better employee retention. The next step performance. It is also important to analyze involves gathering data related to this hypothesis network and influence groups, how the people and finally proving or disproving the hypothesis around an employee affect their behavior and basedontheanalysisofthedata. performance. Understanding retention and absenteeism are some of the other applicationsThe inductive approach on the other hand does analyticsisusefulfor.not start with any specific assumptions, but rather by just collecting data and analyzing it for Predictive analytics can also be used to predict correlations.This kind of approach is routinely use and manage retention. For example, by in specialized consulting firms like the Deloitte performing analysis on internal and external data Analytics Institute, which is based in Singapore it is possible to predict which employees are at the and delivers professional services to organizations highest risk of leaving the organization and why. around the world. Deloitte has performed Based on these insights, the organization can comprehensive analysis on talent management make decisions to mitigate the risks, for example by utilizing various sources of data including sending letters of recognition, phone calls from financial databases, telephone logs, employee superiors,orsalaryincrements. information as well as even lists of websites employees visit. These internal data-sets can also In addition, predictive analysis can be used in the be correlated with external factors, such as area of Workforce Planning to project the supply demographic data, unemployment rates, GDP, and demand of talent for an organization. inflationsandmanyothers. Scenarios and models are helpful here too to anticipate challenges and make all the appropriatedecisions. Analytics can also help to understand the day to day activities of the HR function, such as how they operate, their decision making habits and service levels. The HR function can be properly managed andimprovedbyusinganalyticstounderstandit. How well do you know your workforce? - By Mario Ferraro Knowing the most influencing factors will play a big role in decision making. The more knowledge the organization has the better their decisions are. Inductive Approach Start with a hypothesis and prove/disprove Start with lots of data and derive a theory. Deductive Approach
- 4. Conclusion Contrary to popular belief, organizations don't HRM Enterprise is a comprehensive HRIS which need to wait until they have complex systems and contains all modules required to systematically a full set of data in order to start doing some manage HR functions. Its known for its ability to analytics; they can start small by performing centrally manage payrolls in multiple currencies simple analysis and then later on expand their acrossmultiplelocationsandbusinessunits.Italso analysis based on the data they continue to includes all other necessary talent management gather. tools and frameworks both operational and strategic which help streamline the day-to-day As the organization recognizes the power and the function of the HR department and assist with HR valueofanalytics,itwillonlybenaturaltocontinue planning. The modules have a mix of both tried on the journey by gathering more data and andtestedaswellascontemporarytools. extracting as much value as possible from it. Analytics plays an important role in not only HRM Enterprise is module-based and designed effective talent management but in furthering the with flexibility in mind, so you could pick and performanceoftheentirecompanythroughit. choose modules that are relevant to your business needs and industry. You do not have to pay for features that you do not need. It is also fully web- based and so can be accessed from any location via the internet. The highly configurable nature of the HRM Enterprise allows for almost any changes to the systems processes without the need for complex and costly software code changes. (Configurabilityratherthancustomisability) This award winning system has evolved for 2 decades of development and now has over 650 customers in 30 countries and 18 diverse industries. HRM enterprise is designed to be used globally, but has also been tailored successfully for the African region and its soon becoming the preferredHRsysteminAfrica. Logon to hSenidBiz.com or contact one of the hotlinesbelowforafreeonlinedemo. AboutHRMenterpriseXV How well do you know your workforce? - By Mario Ferraro Mario Ferraro is the Director of human capital consulting (South East Asia) for Deloitte Consulting, an international HR consultancy agency. Mario has over 15 years of experience in the field of Human Resources and has worked in international consulting companie like PricewaterhouseCoopers. Healsoholdsanawardforhisdistinguishedservices for the Worldwide Employee Relocation Council (WERC) of which he was a member of the Board of Directors. The whitepaper is an extract from a Keynote speech About the author Contact Us Log on to our website to find a partner in your region or send us a mail for more information. info@hSenidBiz.com www.hSenidBiz.com