The Business Value of People Analytics. Lexy Martin, Principal Research and Customer Value Visier
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1 The Business Value of People Analytics Lexy Martin, Principal Research and Customer Value Visier
2 High-Level Business Impact of People Analytics B E T T E R I N S I G H T S B E T T E R D E C I S I O N S B E T T E R O U T C O M E S 30% 6% 79% S T O C K P E R F O R M A N C E G R O S S M A R G I N R E T U R N O N E Q U I T Y Bersin by Deloitte: High Impact Talent Analytics CEB Corporate Leadership Council: The Analytics Era Sierra-Cedar HR Systems Survey
3 People Analytics Human Capital Productivity Value Chain People Analytics Improved workforce data for decision making Improved ability to develop highly qualified workforce Improved employee & manager productivity Competitive advantage Return on Equity Structural Equation Path Modeling Conducted by Dr. Janet Marler, School of Business, University at Albany-SUNY
4 People Analytics Value Deploying technology cost efficiently and reducing reporting and analysis labor costs Making interventions from insights that make a difference to HR and improving key HR metrics Impacting business metrics that matter to the C-level Technology / Labor Efficiency Value HR Effectiveness Value Business Impact / Strategic Value Journey to Value
5 Technology / Labor Efficiency Value Deploying technology cost efficiently and reducing reporting and analysis labor costs Technology / Labor Efficiency Value
6 P E R C E N TA G E O F T I M E Changing from Reporting to Analytics Delivers Headcount Savings and Makes Analysts into Strategists Before Change After Change Operator Steward Catalyst Strategist S T R AT E G I C V A L U E
7 C O S T S Avoiding Technology Costs 10% VISIBLE 90% HIDDEN LICENSE Additional Data Discovery Licenses Hardware Purchase & Maintenance Data Warehouse Software Licenses Data Integration Tools Licenses Data Center Maintenance Costs IT Administrators Subject Matter Experts Analysts Software Developers Software Maintenance Fees Other Implementation Costs (i.e. Dashboard, Training)
8 HR Effectiveness Value Making interventions from insights that make a difference to HR and improving key HR metrics HR Effectiveness Value
9 Outperforming with 13% Lower Resignation Rates 35% 30% 25% 20% U.S. Market 15% 10% Visier Customers 5% 0%
10 Reducing Manager Resignation Rates by 30% After two years with Visier, customers on average are achieving a 30% reduction in manager resignations
11 Reducing turnover for key revenue-producing role Challenges HRMS reports did not provide meaningful insights Analytics team spent most time managing data Analytics team was unable to increase headcount Results Insights from extensive best practice HR metrics & analytics More time for high-value analysis, without added headcount 44% reduction in turnover for a key revenue-producing role
12 Reducing resignations enterprise-wide by 2%, for a $12 Million Savings CHALLENGES Demand for data-driven insights a support strategic workforce decisions Sales leaders wanted better insights about their employees Reducing turnover top concern of business leaders RESULTS WITH VISIER Being insight led is now a pillar of their workforce strategy Sales leaders receive transformational insights on workforce Over 2% reduction in voluntary turnover globally ($12 Million savings)
13 + S H E A LT H C A R E Y S T E M Measuring the value of reduced turnover CHALLENGES High cost of turnover Growing shortage of qualified candidates in critical positions Inability to talk with business leaders in terms of dollars and cents RESULTS WITH VISIER Projected $15 million savings in turnover in next three years Reduced first year voluntary turnover from 17.8% to 15.3%
14 Justifying HR programs: Recruiting through University Relations CHALLENGES HRMS reports difficult to produce Reporting environment did not allow for enough analysis Analytics team could not keep up with leadership requests RESULTS WITH VISIER Found that new grad hires promoted at a higher rate, more likely to be high performers, and cost less than experienced peers
15 Business Impact / Strategic Value Impact business metrics that matter to the C-level
16 Strategic reduction in force CHALLENGES Reduce workforce expenses globally APPROACH Analyzed workforce by location against dimensions of revenue generated, costs, and risks Answered strategic question: Are we in the right regions in terms of cost and productivity of labor. RESULTS WITH VISIER Identified geographies where a RIF would have the least impact Achieved the same expense reduction, but with a strategic focus As a result, firm is better set strategically for the future
17 Making the case that improving Quality of Hire can increase revenue CHALLENGES Improve quality of hire to drive revenue RESULTS WITH VISIER Analyze talent pipeline efficiency to understand sources that generate top performers Track recruiter effectiveness and recruiting program effectiveness for sourcing comparable performers Increasing new hire sales by $50,000 in first year could drive $37.5 million extra sales per year
18 Impacting product success through analyzing successful team factors CHALLENGES Understand the relationships between development teams and game performance APPROACH Analyze workforce and business data to discover best predictors of success for each game going to market RESULTS Improve firm performance as the interactions are better understood and higher revenue, more profitable games are produced
19 Margin improvement in right talent / right cost project staffing CHALLENGES Large professional services organizations needed to: Attract and retain qualified staff on an ongoing basis Understand the cost of people to to ensure contracts are profitable Respond quickly, consistently, and with agility to each RFI and RFP RESULTS WITH VISIER Analyze the total cost of workforce on experience, tenure, salary and location Conduct scenario-based workforce planning to determine the optimum mix of consultants Lowered costs on consulting projects an average of $1 million each and improving margins
20 Revenue lift from retained staff CHALLENGES Financial services organization suffered from turnover issues RESULTS WITH VISIER Addressed interventions addressing pay inequities, improved manager communications, improved onboarding and ongoing development Revenue lift of retained staff of $200,000 per employee from ongoing development, yielding significant revenue as turnover declined
21 The strategic impact of safety With Visier, we can procure other systems and bring in their data for analysis, without worrying about data integration fees. Head of HR Research, Statistics and Reporting Team, City of Edmonton CHALLENGES Identifying the root causes of safety incidents RESULTS WITH VISIER Review safety incidents across different dimensions to see what actions are needed to address potential issues Maintain and improve worker safety Contribute to cost savings by reducing insurance premiums when safety performance improves
22 Business Outcomes / Strategic Value Key Metrics for C-level Executives Challenges Assessing corrective actions on degrading employee performance when necessary Approach Dashboard for executives that includes a key metric of employee performance EBITDA per employee Results Executives can see a caution indicator and drill down to assess contributors to determine necessary corrective actions.
23 Mitigating the risks of pay inequity CHALLENGES Possible non-adherence to equal pay laws Example: Insurance company settled a pay discrimination suit at an average of $133,333 for each plaintiff RESULTS WITH VISIER Analyze pay practices and discover pay equity risks before they turn into issues Track whether high pay is due to longer tenure, more education, or higher performance Mitigate risks to avoid unexpected costs, improve long-term productivity, and increase employee engagement
24 Visier Workforce Intelligence Summary of Value: Technology and Labor Cost Efficiencies, HR Effectiveness T E C H N O L O G Y AN D L AB O R C O S T E F F I C I E N C I E S BI costs avoided $2,250,000 per organization 1 Savings from replacing legacy tools $336,000 per organization 2 Data integration costs avoided $240,000 per organization 3 HR labor cost savings $60,000 per year 4 H R E F F E C T I V E N E S S Savings from reduced turnover $ 15,354,640 per 1 0, e m p l o yees p e r year 5
25 Calculating the Cost of Turnover DIRECT COSTS TO REPLACE AN EMPLOYEE Average cost per hire Average first-year orientation and training costs per hire $3,976 $3,000 Total Direct Costs $6,976 INTERIM REDUCTION IN LABOR COSTS Average annual labor costs (salary, bonuses, benefits, etc.) Average time to hire Interim Reduction in Labor Costs $130,000 X52 calendar days (14% of year) $18,200 TOTAL COST OF VOLUNTARY TURNOVER PER LOST EMPLOYEE Direct Costs $6,976 Interim Reduction in Labor Costs -$18,200 Lost Productivity +$120,900 Total Cost of Voluntary Turnover $109,676 per lost employee LOST PRODUCTIVITY COSTS Average time to hire Average time to reach productivity of lost employee Total nonproductive days Average annual revenue per employee Lost Productivity Costs 52 calendar days +60 calendar days =112 calendar days / 365 (31% of year) X $390,000 $120,900 Bersin by Deloitte: Calculating the True Cost of Turnover
26 Visier Workforce Intelligence Summary of Value: Business and Strategic Value B U S I N E S S AN D S T R AT E G I C VAL U E Higher margins on professional services contracts $1M-$3M per multi-year contract 6 Revenue uplift from retained employees receiving additional training $200,000 per employee per year 7 Reduced risk of pay equity lawsuit $133,333 per employee named in suit 8 Workforce planning accuracy $100,000 per headcount improvement in accuracy per year 9
27 Justifying Workforce Intelligence Reference Material Visier: Total Economic Impact of Workforce Intelligence Visier: Data-driven Success Stories with Visier Visier: Building Your Business Case for Workforce Intelligence Sierra-Cedar: The Quantified Organization: Creating Data-driven HR First West Credit Union: First West Credit Union Defending Against Attrition Electronic Arts: Building a Data-Driven Culture with Workforce Intelligence BBVA: BBVA-Compass Capitalizing Workforce Insights to Reduce Turnover Yahoo: Yahoo s Use of Visier Workforce Analytics Shows $2.5 Million Savings Bersin: Calculating the True Cost of Voluntary Turnover: The Surprising ROI of Retention Visier: Insights Report Gender Equity
28 Thank you Lexy
29 H E A LT H C A R E P R O V I D E R Reducing turnover of new clinical staff by 49% CHALLENGES Gathering and presenting data a manual, timeintensive process Turnover of clinical staff a top concern RESULTS WITH VISIER Based on insights Targeted retention of new hires Developed program to improve onboarding New hire turnover within targeted groups reduced by 49%
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