The Challenge for HR Professionals: Using workforce analytics to support business strategy and fact-based decision-making
2015 National EMSI Conference
September 23, 2015
Welcome
Lindsay Scott
Principal, Career Practice
Pay and Performance – Workforce Rewards
Buck Consultants at Xerox
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Today’s discussion
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The Situation: What’s going on in the market
The Challenge: Issues our clients are facing
The Solution: Integrating internal and external analysis
Workforce Intelligence: Analytics for strategic decision-making
The Situation: What’s going on in this market
The need for analytics-driven workforce planning and forecasting is increasing in most organizations
29% expect a growing proportion of contract and temporary
employees.
43% indicate that obtaining human capital and optimizing
human capital investments will be the biggest financial
challenges over the next 10 years.
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69% of HR professionals expect their organization's workforce to
grow in 10 years.
Critical gaps in capability and tools mean that less than 20% of organizations are ready to respond
Activities that HR professionals
identified as highly important,
but that their organizations are
not adequately prepared to
do include:
• Identifying and filling talent gaps
• Forecasting future talent needs
• Leveraging HR metrics
• Conducting workforce planning
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Source: Bersin by Deloitte: January 2013 Whitepaper – Predictions for 2013
Global workforce dynamics are also at play
Several key global workforce
dynamics are further increasing
the pressure on organizations
(especially multi-nationals)
to make advancements
in workforce planning
and forecasting:
• Emerging market growth in
China, India, Eastern Europe, and
South America
• Baby Boomers retiring
• Not enough “Business Ready”
graduates
• Free Agent Nation
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The next generation of workforce intelligence will include…
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SaaS (Software as a Service)
tools to support data
analysis
Access to workforce
analytics expanded
beyond HR
Prescribed actions
based on data
analysis
Collaborative
workforce planning
across functions
Comprehensive cost
modelling of
workforce scenarios
Strategies to leverage
remote and
contingent talent
The Challenge Issues our clients are facing
Our clients want to be able to…
Business
Leadership
Human
Resources
Line
Managers
Analyze historical workforce trends
Predict future trends using internal / external data
Model workforce choices and implications
Know when, how many, and types of people to hire
Use analytics to drive strategy and decisions
Optimize workforce capability and costs
Develop and enable global talent pipelines
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Clients are facing challenges knowing what data to look at and how to access it
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How do we
get access
to it?
What data,
metrics and
analytics
should we be
looking at?
For example:
• Acceptance rate
• Time-to-productivity
• Performance rating
• Productivity
• Total rewards cost
• Successor readiness
• Retention rate
• Flight risk
…by employee, manager, job
type, level, division, region…
…historically, today, in the future
For example:
• Talent availability
• Competitor plans and actions
• Cost of living
• Market compensation
…by job type, level, region…
…historically, today, in the future
Wealth of internal workforce data, difficult
to access
Wealth of external market data, difficult to
access
Clients are also facing challenges of having the right skill sets to make findings actionable
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Do we have
the right skill
sets to drive
actionable
workforce data
analysis?
Knowledge / skills / abilities frequent in HR:
• HR operational knowledge
• Talent management program delivery
• Business, performance, and service
understanding
Knowledge / skills / abilities frequent in IT:
• Systems and data flow expertise
• Data analysis for errors/discrepancies
• Project/implementation management
Knowledge / skills / abilities required to
analyze workforce data and develop action
plans to address findings:
• Strategic business knowledge
• Data analysis within organizational context
• Financial knowledge and cost impacts
• Project phasing/roadmapping
• Change management expertise
vs
The Solution Integrating internal and external analysis
Workforce intelligence solution
Identify key questions
and workforce
concerns
• HRIS Core
• Absence management
• Time & attendance
• Talent acquisition
• Performance management
• Benefit / retirement
Build business case
for investment
Recommend
Decisions and
Actions
Technology + Consulting
Identify and source
data for analysis
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Information +
• Labor & economic market data
• Population & demographics
• Job postings
• Recruiting optimization
• Competition for talent
• Commercial real estate market
• Educational institution profiles
• Weather & climate data
Inte
rnal A
naly
sis
E
xte
rnal A
naly
sis
Identify key metrics for
measurement
Key driver analysis – Turnover
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Workforce Intelligence Analytics for strategic decision-making
The situation
Optimize the locational delivery of service center
support
• National Fortune 1000 services firm with shared
service centers in 4 geographically diverse cities
• 12 shared services positions including customer
service, office / admin, and general office
management
• Shared service staff located in multiple facilities
within each city
Location assessment included a number of
dimensions:
• Workforce
• Local economy
• Market demand
• Industry competition
• Real estate market
• Educational market
• Transportation
• Weather
Objective
Organization
Scope of
Analysis
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Company profile – Headcount and costs
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How do the 4 service centers’ workforce
compare?
Service Center Jobs / Employment:
• Unique jobs within the 12 SOC’s range
from 52-149
• Total service center employment 3,600
• SC-4 has 41% of employment base
• 70% + employment base is female
Service Center Compensation:
• Varies both due to market and position mix
Prime Working Age Population:
• Company share of prime working age
population (20-44) substantially higher than
local market
Company profile – Real estate assessment
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How do the 4 service centers’ facilities /
infrastructure compare?
Service Center Real Estate:
• 16 Service Center locations in 4 cities with nearly
710,000 square feet of floor space
• SC-2 has smallest city footprint, SC-4 the largest
• Company floor space and cost vary significantly
by location
• Differential market vacancy rate may be an issue
15% Vacancy
Threshold
Role profile – Customer service rep
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How does the service center
workforce compare for a single role?
Service Center Headcount:
• SC-1 headcount for CSR lowest
• SC-2 headcount for CSR highest
• Headcount trend reduced in 3 SC’s
Service Center Turnover:
• SC-2 voluntary turnover is much
higher than the 20% target
• SC-3 retention is improving
• SC-1 turnover is not improving
• SC-4 is role model for retention
20% Target
Turnover
CSR role – Labor cost vs market
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Competitive Market Comparison:
• Pay is much higher than market for
SC-1 and SC-4
• SC-2 & SC-3 pay is in EMSI range
Company pay is “fully competitive” when between 90% - 110% of the
comparable market median
EMSI vs Survey Market:
• Customer Service Rep is a SOC role
• Surveys typically have 3 unique jobs
within the CSR SOC role
• EMSI distribution represents entire
market; surveys represent a subset
• Remember peer competitors
CSR role – Labor market supply vs demand
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What is the condition for the CSR
labor market in the 4 service
center markets?
Labor Availability:
• Very large SCO-1 labor supply but
growing very slowly
• SC-3 labor supply large and
growing quickly
Market Demand vs Supply:
• Monthly postings & monthly hires are
independent measures of labor demand
• Ratio of labor supply / labor demand
measures labor tightness
• CSR markets are tightest in SC-2 & SC-3
Local economy – General
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How might general economic
conditions influence workforce and
siting decisions?
Indicators of employment
Measured relative to percentage growth
for 4 city average:
• City-1 slowest growth historically but
improving
• City-3 all green < 0.2% + - 0.2% > 0.2% Key:
City -1 City -2 City - 3 City - 4
Labor Force
Employment
Unemployment
Labor Force
Employment
Unemployment
Annual Growth 2005 - 2014
Annual Growth 2013 - 2014
Trends in unemployment
Full employment economy typically defined
as 5% unemployment rate:
• All 4 cities have large drops in the
unemployment rate
• Historically City-2 & City-4 have lower
unemployment impact
• Three cities are near 5% threshold
Findings and recommendations
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Objective – optimize the locational delivery of service center support
Service
Centers Workforce Findings Local Market Findings
SC-2 • CSR large share of headcount
• CSR turnover high, trend unchanged
• CSR pay likely not peer competitive
• Competitive real estate cost
• Very low RE vacancy rate
• Unemployment less than 5%
SC-3 • CSR large share headcount
• Turnover near target and improving
• CSR pay greater than broad market
• RE cost very competitive
• RE vacancy rate greater than 15%
• Economy indicators “green”
SC-4 • Largest headcount & number of jobs
• Turnover is low and improving
• CSR pay greater than broad market
• Largest area footprint
• Low real estate vacancy rate
• Unemployment less than 5%
Recommendations:
• Investigate closure of SC-2 and consolidation of support to other centers
• Investigate selling / leasing SC-2 company buildings in “hot” real estate market
• Investigate expanding SC-3 for CSR role; assess hiring market impact on timing,
and determine cost to expand / consolidate existing real estate
• Investigate real estate consolidation in SC-4 and selling / leasing excess space
• Determine drivers of SC-4 retention success
What competencies does HR bring to these analysis?
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Competitive
Assessment
• Understanding the typical composition of jobs
and “peer” market value within a broad SOC role
• Enhances the market estimate of labor costs
based on the “mix” of jobs within a SOC role
• Identify SC-2 “Top Performers” and determine
transfer potential
• Potentially lowers SC-3 hiring costs, maintains
key skill levels, enhances supply of “mentors” for
new hires
Performance
• Determine the key drivers for low voluntary CSR
turnover in Service Center 4
• Use the learnings from the key driver analysis to
enhance retention at other service centers
Culture
Questions
Lindsay Scott
Principal, Career Practice
Pay and Performance
Buck Consultants at Xerox
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