46 HR analytics applications

In this chapter so far, we’ve discussed the exponential increase of HR data in organizations. In this section, we’ll tackle what to do with this data. Basically, HR analytics is the process of analyzing and using data to make informed business decisions.  For example, talent acquisition managers will tell you that the most difficult part of the recruitment process is determining which applicants will make the best hires. Analytics can help you determine which qualities are most important for a certain position, then sift through applications and find the candidates that best match those qualities. Analytics can also tell you when a certain quality or data point actually has little to do with an employee’s success. For example, imagine if your company found out, after analyzing the profile of your top salespeople, that college grade point average is not a strong indicator of future sales performance. You can now expand your recruitment pool to anyone with a university degree instead of restricting it to those with high GPA’s!

Job design

In one of the first chapters of this book we discussed how to structure jobs to make them more motivating and to increase the performance of employees. Data, and more specifically data analytics, can allow HR managers to pinpoint areas that facilitate or impede motivation or performance. For example, during the pandemic, organizations such as Rabobank, Merck, and National Australia Bank are all using quick surveys to understand how their employees are coping with remote work, how their needs for support are changing, and what their preferences are for returning to work. Using text analytics on free text comments (software that decodes words and word frequency into emotional sentiment or different psychological traits) and discussion boards, companies can gain valuable insights into what’s important to their employees in a rapidly changing environment, while avoiding survey fatigue and preserving anonymity at an individual level. Using this information, they can develop initiatives that directly impact their employees; instead of guessing they can be very precise in the nature and timing of their interventions. They can even custom-tailor these solutions to individual employees.

Recruitment

The objective of recruitment being to generate the maximum number of quality applications possible, recruitment analytics borrows heavily from marketing science. Recruiters that use analytical tools rely on segmentation, statistical analysis, and the development of optimal people models (i.e., ideal candidates). Since an increasing majority of recruitment occurs electronically, there is a vast amount of data available to recruiters to seek to optimize their processes.  An example of this is the segmentation in job advertising and the deployment of programmatic advertisement. In programmatic advertisement, target groups for a job opening are defined and then targeted through multiple online sources. In this case, the ad spent (per click or per thousand impressions) is closely monitored and when needed, adjusted. Because of the segmentation, different advertisements can be tested against different job-seeker segments in an effort to optimize conversion and lower cost.

The virtual nature of recruitment also allows for very innovative and ‘out-of-the-box’ recruiting techniques. In the world of motorsport, for example, Nissan is recruiting through an unusual channel: racing video games! Nissan joined forces with Sony to create the GT Academy, a global annual contest designed to find the best gaming racers and turn them into real-life racing drivers. Hundreds of thousands of hopefuls now enter the contest each year. And all of the winners selected in the past few years are still racing, proving what a useful recruitment channel this has been for Nissan.

Staffing

The objective of staffing is to find the best employee for a specific job. As we’ve seen in the staffing chapter, this can be a daunting task. People are complex and evaluating them is fraught with obstacles such as biases. HR analytics allows the HR department to cut through this complexity and complexity. For example, HR managers can analyze the profiles of their top performers, identify their characteristics (e.g., they have MBA’s, were involved in high level athletics, or are introverts) and align their staffing processes accordingly.

Training

With the rise of online learning, corporate learning and development is becoming increasingly personalised to individual learners. Fuelled by data and analytics, ‘adaptive’ learning technology allows courses, course segments, activities and test questions to be personalized to suit the learner’s preference, pace of learning, and best way of learning.

Individual, self-paced online learning is also arguably more cost effective than pulling employees out of their job for a day or week to send them on expensive training courses. Importantly, self-directed learning like this helps integrate ongoing development into employees’ everyday routines. Danone’s online Danone Campus 2.0 is one example of this in action. The food giant has created a user-friendly online platform where employees can boost their development and share best practices and knowledge with other staff.

Compensation

Whether it’s managing job candidate salary expectations or looking for evidence of pay equity, data allows HR managers to make decisions based on facts. For example, when an employee receives a competing offer, their manager’s first instinct may be to match it. The key word here is instinct, which can lead to costly mistakes: intuition can cause even the best managers and HR professionals to make poor judgment calls. The way to mitigate this risk is to look to the data: to find out how the employee compares to the rest of their team and what the market is paying for a similar role.

Visier, an HR consultancy, specializes in compensation allows to compare compensation profiles, incentive rates, performance ratings, and attributes of employees to others on the same team or in similar positions. Armed with this information, managers can make decisions that are no longer based on emotion, but reality.

Performance management

UPS has taken the use of data and analytics in performance management to an entirely new level. For example, the handheld computer that drivers have been carrying for years (those electronic boxes you sign to say you received your parcel) is actually a sophisticated device that helps drivers make better decisions, such as which order to deliver parcels in for the most efficient route. In addition, UPS trucks are fitted with more than 200 sensors that gather data on everything from whether the driver is wearing a seatbelt to how many times the driver has to reverse or make a U-turn.

By monitoring their drivers and providing feedback and training where needed, UPS has achieved a reduction of 8.5 million gallons of fuel and 85 million miles per year. Plus, drivers now make an average of 120 stops a day. That number used to be less than 100 – meaning the same drivers with the same trucks are now able to deliver more packages than before.

You’d think that monitoring employees so closely might cause a backlash among staff. But enhanced performance means the company can pay its drivers some of the highest wages in the industry, which no doubt helps support employee buy-in for data-driven performance. The company has also taken other steps to ensure they don’t face a driver backlash; for example, under the terms of drivers’ contracts, UPS cannot collect data without informing drivers of what they’re gathering. Nor can they discipline a driver based only on what the data has told them.

Health and safety

In another example, Australian company Seeing Machines has developed technology for mining trucks that tracks the driver’s eyes in order to spot driver fatigue. The system uses a camera, GPS and accelerometer to track eye and eyelid movement, such as how often a driver blinks, how long those blinks last, and how slowly the eyelids are moving – and it can do all this even if the driver is wearing sunglasses. When a driver closes their eyes for longer than 1.6 seconds, an alarm is triggered inside the truck – both a noise and a vibration within the seat. Then, if the alarm is triggered for a second time, a dispatcher or supervisor is alerted, so that they can make contact with the driver via radio.

Steel producer North Star BlueScope Steel has been working with IBM to design a safety program that incorporates IBM Watson’s cognitive computing power and sensors in wrist bands and helmets. The program, called IBM Employee Wellness and Safety Solution, delivers safety alerts in real time to workers and supervisors. For example, if the technology detects a worker is not moving and they have an increased heart rate and high temperature, it could mean they’re suffering from exertion or even extreme heat stress – in which case, a supervisor could be alerted, or the employee advised to take a break.

Reference

https://hbr.org/2020/10/tech-is-transforming-people-analytics-is-that-a-good-thing