Using analytics to make smart HR decisions

bamboohr.com payscale.com5 Steps to a Smart Compensation Plan o Range Width [=max-min/min] o How much flexibility do we give our managers in setting pay?. bamboohr.com payscale.com5 Ste

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People Analytics

Companies that build capabilities in people analytics outperform their peers in quality of hire, retention, and leadership capabilities, and are generally higher ranked in their employment brand.

-Bersin, by Deloitte

Human Capital Trends, 2015

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Competency Gap

Three in four surveyed companies (75 percent) believe that using people analytics is “important,” but just 8 percent believe their organization is “strong” in this area.

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Competency Gap

Too few organizations are actively implementing people analytics capabilities to address complex business and talent needs.

Among all the challenges we studied this year, people analytics

presented the second-biggest overall capability gap for organizations.

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of HR professionals score themselves low in

their ability to analyze.

80%

-Bersin

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It’s time to blow up HR and build something new Rethinking HR

Why we love to hate HR What will it take to fix HR It’s time to split HR

HR faces a crisis of credibility in the boardroom

HR is our “favorite corporate punching bag”

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It’s more than just

Competency

• Outdated Technologies (like spreadsheets)

• Need for data consolidation (like HRIS)

• Need to look externally

• Waiting too long to start measuring

• Don’t know what to measure and how

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How do we fix it?

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Increase exposure to the

data you do use

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Identify the data you need

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Data is not the point

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Suck Threshold

Features

Suck Threshold

Not all growth is good growth

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Suck Threshold

What Matters Most

Not doing enough Doing too much

What To Say No To Sweet Spot

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Signal to noise ratio

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Align With Strategy

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Focus on Outcomes

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Comp Analytics

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o Identify pay issues that create unnecessary cost.

o Identify pay issues that create risk of litigation.

o Condense large amounts of information into small

understandable nuggets.

o Substantiate your hunches.

o Get your CFO on your side.

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Range Minimum: Range Maximum:

Lower limit of a pay

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bamboohr.com payscale.com

5 Steps to a Smart Compensation Plan

o Range Width [=(max-min)/min]

o How much flexibility do we give our managers in setting pay?

o Midpoint Differential [=(midpoint grade2-midpoint

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ones at the top deserve it?

data doesn’t support it

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With Execs About Compensation

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What’s the real concern

What’s the response

o Educate and update execs regularly on the comp info they need

to know

Proof

o Market-Ratio – report for the org and by dept*

o Compa-Ratio – report for the org and by dept Provide individual info to managers, as appropriate

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Sample Compa Ratio Report

How are we doing?

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What’s the real concern?

o Someone annoying has been coming into my office every week for the

past quarter asking for an increase.

o Are we overpaying?

What’s the response?

o Share real-time data on your organization’s position relative to the

market.

Proof

o Market-Ratio – report for the org and by dept.*

o Compa-Ratio – report for the org and by dept Provide individual info to managers, as appropriate.

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Sample Market Ratio Report

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What about our critical positions?

anything – don’t tie my hands

months What’s going on?

o Share current market trends on critical jobs so you can be more

responsive to market shifts in an uncertain time

Proof

o Market Reports – Hot jobs analysis

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What about our critical positions?

Hot Jobs Analysis

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o We just lost a really critical, high-performing, employee to our

competitor

o Share info about where your top performers fall in range

Proof

o Flight Risk Report

o Underpaid over-achievers

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5 Steps to a Smart Compensation PlanHow are our top performers

doing? Flight Risk Report

How are our top performers doing?

Flight Risk Report

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o Where are we open to law suits?

o We have a report due on our compliance with EEO

o Share info on disparate pay/potential risk areas

o Provide assurance that there are no risk issues

Proof

o Disparate pay report, divided by EEO classes

What are our potential risks?

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Are there any potential risks?

Disparate Pay and Reports by EEO

Gender-based Report

What are our potential risks?

Disparate Pay and Reports by EEO

Disparate Pay

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ok?

o Get to the reasons behind the turnover Not all turnover is bad

o Share the physical costs of turnover

Proof

o Turnover calculation

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Any turnover issues?

Calculating the Cost of Turnover

Additional Resource: http://www.isquare.com/turnover.cfm

Calculating the cost of turnover

o Line Staff = 150% of annual salary

o Managerial staff = 200-250% of annual salary

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• Win Rate vs Competitors

# of head-to-head wins vs competitors

The idea is that recruitment should improve in relation to the comp program’s success

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• Flight Risk - # flight risk EE

• 90 Day Turnover Rate =

• Good Turnover vs Bad Turnover

The idea is that retention should improve in relation to the comp program’s success

Avg Performer

High Performer Voluntary X% Y% Z%

Involuntary P% D% Q%

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Measures

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www.payscale.com

the rate at which people leave a

place, company, etc., and are

replaced by others

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5 Steps to a Smart Compensation PlanExamples of Budgetary Impact Measures

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• Compensation as a % of Revenue or

Total Compensation as a % of Revenue

The idea is that comp $ don’t have to increase to spend comp better

• Gut check on over/under payment vs Actual

(Range & Market) relative to performance

The intent is to show that gut checks aren’t always accurate – value in doing comp studies

Measures

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5 Steps to a Smart Compensation PlanExamples of Engagement

Measures

• Engagement Survey Scores

• Absenteeism – Average # of unplanned

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e NPS

(Employee Net Promoter Score)

“On a scale of 1 to 10, how likely are you to recommend this company as a place to work?”

10 9 8 7 6 5 4 3 2 1 0

Promoters Passives Detractors

eNPS = Promoters (%) – Detractors (%)

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General Guidelines

• Start small (the journey of a thousand miles)

• Pick something meaningful and get started

• Align your efforts with your business strategy

• Build (or hire) competency in your team

• Partner with IT

• Focus on ROI

• Leverage technology

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Companies that excel in talent and HR analytics can be positioned to out-

compete and outperform their peers in the coming years

—Bersin

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Who are our key partners?

Who are our key suppliers?

Which key resources are we

acquiring from partners?

Which key activities do

What bundles of products and services are we offering to each Customer Segment?

Which customer needs are we satisfying?

What type of relationship does each of our Customer Segments expect us to establish /maintain with them?

Which ones have we established?

How are they integrated with the rest of our business model?

For whom are we creating value?

Who are our most important customers?

Through which Channels do our Customer Segments want

How are we integrating them with customer routines?

What Key Resources do our Value Propositions require?

Our Distribution Channels?

Customer Relationships?

Revenue Streams?

What are the most important costs

inherent in our business model?

Which Key Resources are most

expensive?

Which Key Activities are most

expensive?

For what value are our customers really willing to pay?

For what do they currently pay?

How are they currently paying? (How would they prefer to pay?) How do we report on this “revenue” to the rest of the

organization?

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Follow BambooHR and PayScale on social media :

bamboohr.com/blog | payscale.com/compensation-today

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Questions ?

BambooHR

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