For several years now, I’ve been asking, no, begging, human capital/resources software vendors to do something with their analytics modules other than provide a fancy tool that accesses the data that already exists in their applications. But the ’solution’ they usually present is a collection of tools with little pre-delivered analytical insights within it.
One business problem I have repeatedly zeroed-in with these firms is that a human capital analytics solution should be analyzing whether certain employees are prone to leaving the firm and/or which bosses are toxic to the company.
More often than not, what vendors would show me is this x/y graph that shows the correlation between performance review rankings and compensation. This is not as spectacular an analysis as vendors think it is as I saw a client do this with Lotus 1-2-3 in 1984. His data came right out of the payroll and HR systems. No, this concept is not new and it isn’t stretching the thinking or best practices in human capital.
What would be cool to see is vendors evolve to a new level of management science: A science where executives use ‘proxies’ not journal entries or static, out of date employment data. Proxies would help an executive to prove or disprove certain hypotheses. If you thought some of your employees were flight risks, what would give you clues to their potential for departing the firm? I’d suggest these proxies might work in some situations:
- Employees that have cashed out all of their stock options
- Employees that have recently exhausted all of the vacation and sick days
- Employees that are taking a higher number of personal days than usual
- Employees that are requesting transfers to other parts of the firm
- Employees that have gotten a new boss
- Employees that have recently had their overall performance rating drop a level
- Employees that have recently had more responsibility dropped on them without a corresponding increase in pay
- Employees that have had to take a cut in pay
- Employees whose spouse, sibling or best friend was recently let go from the firm
- Employees whose boss was recently terminated or quit
- Etc.
Granted some of these reasons are not at all indicative of an employee about to depart. An employee may have, for example, used up all of their vacation time for a once in a lifetime trip, to plan and throw their wedding, or to extend a family leave situation. However, an alert executive would want to know, as early as possible, which employees may warrant some special attention, intervention or investigation. It’s really hard to keep a person with the firm when they’ve already tendered their resignation. Proxies help direct an executive’s or manager’s attention where it could make the greatest difference.
Analytic software needs to be delivered to software customers with more of the insight pre-delivered. Software customers have less time than ever to do the innovation that vendors think is the customers’ responsibility. No - innovation should be the domain of the vendor not the customer when it comes to package software. Vendors should be castigated for only providing a tool kit. As a customer, I want a gassed up Porsche in my driveway, not a pile of parts and a socket wrench set.
Taleo’s solution, Talent Insight, may be a big step in the right direction. Recently, Taleo execs described how one customer of theirs used this solution to identify which emergency room nurses were more successful or apt to stay (or leave) their employer. Based on the insights they could glean from this analysis, the employer was able to alter its recruiting practices and profile. The firm also used the system to pair up newer hires with more experienced emergency room nurses. Turnover in this critical position has fallen from 63% annually to 13% today.
That same kind of analytical rigor can be used to identify which employees provide great customer service and how do these employees differ from those who don’t. Employers that can recruit the right (or better) talent in the first place, create economic, strategic and competitive advantage for their firm. This is how functions like HR become strategic, value-added parts of a company. When HR has the right tools, insights, people, etc., HR can be a formidable asset.
When your organization considers analytic software, be sure to get one that can deliver some measure of strategic capability out of the box. A toolset can only deliver value after the expenditure of time and a lot of innovative insight. If your firm is short on either of these, get a better, more complete solution instead of a bunch of tools.
