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Predictive Analytics:Best Practices in Attracting, Selecting, and Retaining Talents

Liza Manalo-MapaguCEO of HR Avatar Philippines

Presentation toUnited Portusers Logistics Summit

CEO of HR Avatar Asia Former Managing Director of Assessment Analytics Consulting Director of Strategic Consulting Services Assistant General Manager of Eduquest, Inc. Director of Center for Educational Assessment and Research, Human

Resource Development Center at the De La Salle-University-College of Saint Benilde

Head of Evaluation of De La Salle University-Institutional Testing and Evaluation Office

Competency Profiling and Assessment projects for major corporations in the Philippines.

A BS Psychology graduate from University of Sto.Tomas Master’s Degree in Measurement and Evaluation at De La Salle University Ph. D course in Research and Evaluation at the University of the Philippines. Certified by British Psychological Society (BPS) on Levels A and B Assessment Certified by SHL to Conduct Courses Under the CEB SHL Training Academy

Liza Manalo- Mapagu

Presentation Agenda

Why Use Predictive Analytics?

What is Predictive Analytics?

How can Predictive Analytics be used for Talent Acquisition

and Development? (5 Best Strategies)

What is HR Avatar?

How can HR Avatar be used by HR Managers for Talent

Management

The value of talented people

“Organization doesn't really accomplish anything. Plans don't accomplish anything, either. Theories of management don't much matter. Endeavours succeed or fail because of the people involved.

Only by attracting the best people will you accomplish great deeds”

Colin Powell former US Secretary of State

“The chances are good that up to 66% of your company's hiring decisions will prove to be mistakes in the first twelve months”

Peter Drucker, The Management Guru

The cost of a Talent walking out the door

Organisational Knowledge Lost

Performance and motivation impact on direct report

Time lag to competence

Lose talent to competitor

Wasted Recruitment Spend

“the cost of employee turnover is one-and-a-half the amount of employees monthly salary…..and the cost is even more ahigher with first year hires”

The PWC Saratoga Review, 2008

Attrition is getting worse…

A growing number of new hires -- as well as top-performing employees -- are choosing not to stick around for long.

34.1% in 2013

22.6% in 2012

2014 PwC Saratoga U.S. Human Capital Effectiveness Report

The SolutionOrganizations are turning to predictive analytics to boost their "quality of hire," and thus reduce the likelihood of first-year turnover

The PWC Saratoga Review, 2014

Predictive Analytics Defined

Predictive analytics is the branch of data mining concerned with forecasting probabilities. The technique uses variables that can be measured to predict the future behavior of a person or other entity.

Predictive analytics is the technology that learns from data to make predictions about what each individual will do — from thriving and donating to stealing and crashing your car,“

The power to predict who will click, buy, lie or die.

Predictive Analytics Defined

How can predictive analytics benefit your pre-employment hiring process

by Jeff Furts

1. Predictive analytics will help you improve your quality hire

Benefits of Predictive Analytics for TA

hiring process

• performance• attrition data• engagement survey

data

pre-employment assessment results, interview results, recruiting sources, personal data

2. Predictive analytics will help you source more efficiently and effectively

Hiring managers can trace the hire back to the original hiring source and then link that to quality of hire.

3. Predictive analytics will help you improve your speed of hire.

1

0.70-0.99

0.60-0.69

0.50-0.59

0.40-0.49

0.30-0.39

0.20-0.29

0.10-0.19

0.01-0.09

0.00

Assessment Methods - ValidityPERFECT PREDICTION – Impossibly Good

Work Sample tests

Ability Tests / Structured Interviews

Job Knowledge Tests / Group Exercises / Personality Questionnaires

Assessment Centres (poorly designed and facilitated)

References

CV’s/Resumes / Years of Work Experience

Academic Results / Years of Education

Graphology / Age

CHANCE PREDICTION – Impossibly Bad

Source: Journal of Occupational and Organisational Psychology (2001), 74, 441 – 472. Robertson, I.T & Smith, M.

“The objective of predictive analytics applied to recruiting is to help organizations more effectively deploy resources, and drive higher quality and greater longevity of new hires.”

Benefits of Predictive Analytics for TA

Job Fit

Culture Fit

Performance

Retention

Potential

Trainability

What do you want to predict?

How to use predictive analytics for predicting:

•Trainability•High Performance•Culture Fit

Competencies is at the heart of the human capital management cycle….

Acquire Talent

Deploy

Talent

Develop Talent

RewardTalent

Retain Talent

Measure Quality ofHire

Assess for potential

Career pathing

Foster engagement

Talent matching

Succession planning

Development needs

COMPETENCIES

A Competency is:

• “a cluster of related knowledge, skills and attitudes that affects a major part of one’s job (a role or responsibility) that correlates with performance on the job.

• Threshold

• Differentiating

• Core

• Technical

(Spencer & Spencer, 1993)

Types of Competencies

“Threshold” are essential characteristics required for all job incumbents to perform the job at a minimal level of proficiency.

Example: Cognitive Ability, Language Proficiency, Positive Work Attitude, Basic Skills

To predict: TRAINABILITY

POTENTIAL

Types of Competencies

“Differentiating” competencies distinguish superior

from average performers.

Example:

Results-Orientation, Multi-Tasking, Selling and

Negotiation, Customer Service, Quality Focus

To predict: HIGH PERFORMANCE

Types of Competencies

Core competencies are characteristics that must be

possessed by every member regardless of their level

of performance; they extend to all individuals in the

organization.

Core competencies support the

organization's mission, vision and values

To predict: CULTURE FIT

Types of Competencies

Distinctive (Technical) competencies are position-specific KSAs.

Example: Selling and Negotiation, Territory Management, Product Knowledge

To predict: PERFORMANCE

Also use for TRAINING NEEDS ANALYSIS

Types of Competencies

Best Practice #1

Predicting HIGH PERFORMERS through establishing

Success Profiles

Concurrent Validation Studies(Internal Benchmarking Study)

This Performance Benchmarking Study aims:

Why will you set Success Profiles?

To improve the company’s ability to:

• Predict top performers

• Hire talents within the competency

standards of the company

Presentation of Data

Frontline ManagerOverall Score Comparison between High and Low Performers

Frontline ManagerComparison between High and Low Performers

Frontline ManagerComparison between High and Low Performers

Frontline ManagerComparison between High and Low Performers

Frontline ManagerComparison between High and Low Performers

Identify the best predictors of performance through PredictiveValidation Studies

Best Practice #2

Predictive validity is the extent to which a score or test predicts scores on some criterion measure.

Independent Variables Dependent Variables

(X=Predictors) (Y=To be Predicted)

Predictive Validity

• Personal Factors• Knowledge• Skills• Attitudes• Job Satisfaction• Engagement

Job

Performance

Variables R2 Change of R2

1. Cognitive 0.20

2. Interview 0.12 0.016

3. Job Experience 0.10 0.015

4. Education 0.09 0.010

% of Prediction 0.241

Regression Summary Table for Job Performance

It can predict 24%

Use of assessment solution to predict:

TrainabilityPotential

Best Practice #3

Top 8 High-Impact Talent Acquisition Practices

High Impact Talent Acquisition Bersin by Deloitte, 2013

http://www.slideshare.net/jbersin/highimpact-talent-acquisition-research-findings

“Threshold” are essential characteristics required for all job incumbents to perform the job at a minimal level of proficiency.

Example: Cognitive Ability, Language Proficiency, Positive Work Attitude, Basic Skills

To predict: TRAINABILITY

POTENTIAL

Types of Competencies

How can HR Avatar help you in predicting:

TRAINABILITY?

PERFORMANCE?

Packages According to HR Initiatives

Talent Acquisition

oCampus Recruitment

oProfessionalsoManagers

Process-People-Technology Solution through HR Avatar

Confirmatory Job Analysis (Threshold)

Capability Training for the Recruitment Team on:Design of Testing ProgramBehavioral Event Interviewing

“CareerMatch”

Wide Range of Assessments

Better Hires Through the Right Talent Data

Does the candidate:

Have the ability to learn and master all aspects of the job once hired?• Attention to detail• Analytical thinking

Have personality traits that ‘fit’ the needs of the job – to ensure tenure?• Expressive enough for sales?• Conscientious?• Etc.

Have the right attitude towards work?

Have a history of behaviors that correlate with consistency and tenure?

Have the specialized skills or knowledge needed for the job?

Cognitive Simulation

Personality Inventory

Personality Inventory

Behavioral History

Skills and Knowledge Modules

Job-Specific

Based on US Government Occupational Information Network (O*NET)

Designed exclusively for quality of hire

Each test contains:• Animated work simulation (cognitive abilities)• Personality inventory• Behavioral history questionnaire• An automatically scored essay*• One or more job-related skills or knowledge

tests*

* Included when appropriate for the job.

Individual Test Report

Designed for quality of hire

Includes targeted interview guide

Fully supports custom profiles

Self-interpreting

Overall Weighted Score

Individual Scores

Percentile scores

Interview Guide using Behavioral Event Interviewing

Use of assessment solution to predict:

• Leadership Potentials• Retention

Best Practice #4

How to use predictive analytics for predicting:

• Leadership Potential

High-Performers vs. High Potentials

WHO are potential candidates to the Talent Pool?

High-performers give immediate

return on investment, with

estimates averaging from more

than 50% additional value, to as

much as a 100% increase in

productivity over average

performers.

iii Corporate Leadership Council, Executive Summary, February 2005. William D. Koch, Directions: Closing the Gap Between the

Best and the Rest, Development Dimensions International, 2007.

WHO are potential candidates to the Talent Pool?

High-potentials are typically

defined as those

demonstrating high-level

contributions, organizational

values, potential to move up

to an identified position within

a given timeframe, and

potential to assume greater

responsibility

iii Corporate Leadership Council, Executive Summary, February 2005. William D. Koch, Directions: Closing the Gap Between the Best and the Rest,

Development Dimensions International, 2007.

“Most high-performers are NOT high-potentials BUT all high-potentials are high-performers.”

Assessment of Leadership Potentials

Types of high-performers who fail to become high-potentials

“Engaged Dreamers” have high motivation,

but only average ability.

“Unengaged Stars” have aspiration and

ability, but do not fully believe in their work or

organization.

“Misaligned Stars” have ability and

organizational commitment, but lack the drive

and ambition for success at the next level.

IntellectualInterpersonal (Personality)

Engagement Aspiration

How do we assess High Potentials?

The First-Line Supervisory Fundamentals skills test is a fast, easy way to confirm whether a candidate has a basic understanding of the core principles involved in supervising others.

The test asks questions from a bank of questions for testing security purposes. HR Avatar periodically adds new questions to this bank to prevent cheating and to stay current with developments in leadership, management and supervisory principles.

Topics within the discipline of supervising employees that are covered in the test include: • Professional Development• Dealing with Poor Behavior• Working with People• Roles and Responsibilities• Controlling• Interviewing

HR AVATAR HIGH-POTENTIAL SOLUTION

Intellectual Fit: Analytical Thinking and Attention to Details and Accuracy

Personality Fit: The natural leader defined in Big Five terms is resilient (N-); energetic, outgoing and persuasive (E+); visionary (O+); competitive (A-); and dedicated to a goal (C+).

Basic Functional: Knowledge of Frontline Management Fundamentals, Communication Skills

Motivation Fit: Aspiration to go up to the corporate ladder

Engagement: Being physically, psychologically and intellectually involved at work.

SampleReport

How to use predictive analytics for predicting:

• Retention

What are the drivers of attrition and retention?

1. New hires are disillusioned because the organization failed to provide a realistic preview of the job

2. Employees are hired into or assigned a job that doesn’t match their talents

3. Not getting enough performance coaching and feedback

4. Feeling devalued, ignored, and unrecognized

5. Seeing little or no opportunity for career growth and advancement

6. Feeling extreme negative stress from overwork, workplace conflicts, and work/life imbalance

7. Loss of trust and confidence in senior leaders

Saratoga Institute Survey Research“Why Employees Leave”

Based on analysis of 19,700 surveys from 1998 through 2004 across 17 different industries.

Regarding retention - Why do people leave?

Employee KSAOs - traits, motivations, interests, skills, abilities, experiences -explain an estimated 10% of workforce turnover

Job Factors

Manager

KSAOs

External

Factors

(e.g., Job

Market)

BETTER MANAGERS – Developing managers who know how to build teams,

manage performance, develop individuals to their full potential, and help them

achieve success on the job.

BETTER MATCHING – Use of employee assessment that can spot and

develop people who "fit" with the job description, the company culture, and the

supervisor or manager.

BETTER INTEGRATION -- Design of effective orientation and "Onboarding"

programs to build enthusiastic employees that stay longer.

BETTER CONNECTIONS – Provide an environment that build productive

relationships with their co-workers and supervisors.

BETTER CULTURE – Identify the critical drivers employees need and expect

from their job that drive high employee retention.

What can we do to arrest attrition?

Gregg Smith: “High Turnover to High Retention”

What is the role assessment in RETENTION?

Employee KSAOs - traits, motivations, interests, skills, abilities, experiences - explain an estimated 10% of workforce turnover

External

Factors

(e.g., Job

Market)

KSAOs

Manager

Job

Factors

90-Day Retention Rate Comparison between Low and High OVERALL Scorers on the PreVisor Solution

73.0

87.0

70

75

80

85

90

90

-Da

y R

ete

nti

on

Ra

te

bottom 30% top 30%

“For every 100 low scoring applicants

we screen out and instead hire 100 high

scorers, we retain 14 more people and save

$94,010 in turnover and replacement costs.”

- Actual Client example

But even small effects can have powerful business impact…

Maximize the value of giving feedback and validation of talent data with the talent.

Best Practice #5

The talent…a human being

Feedback process

Feedback and Exploration

Explain Dimension

Explain Position

Qualify

Probe

Explore Impact

Link

Summarise

85

• Predictive analytics offers tremendous opportunities to use historical data in a way to predict future behaviour.

Data may NOT tell the entire story.

Understanding the story is critical.

Imagine HR being able to

predict which new hire has

the highest probability of

turning out to be a top

performer and effective

leader?

Better breed of talents

Culture of excellence

High performing organization

People are the key to

organization’s present and

future success.

“Get the right people

on the bus.”Jim Collins

“MEASUREMENT MATTERS:

If you cannot measure it…you cannot manage it.”

Robert Kaplan and David Norton

Liza M. Mapagu

lizam@hravatar.com.ph

+632 917.8999180