Human Capital in an Organisation. From a New Perspective
Using data and predictive modelling, HR analytics focuses on recruitment and retention, reduction of turnover costs, KPIs, performance management and talent development. It helps set up management roles, organisation design and working conditions, home office or flexible working hours.
Employees require that employers pay greater attention to their needs and help them balance their professional and personal lives. In practice, companies try to solve this by adjusting workplaces, changing work tasks and creating new positions. In the long term, they try to engage employees to a greater degree and to retain them, to improve management and build a meaningful corporate culture. Despite these efforts, managers feel the need to change the concept of human resources in their organisations. Therefore, we offer them assistance in the form of specific HR analytics solutions.
New role of management, new design of the organisation and working conditions, such as growth in the number of temporary teams and teams consisting of specialists on different disciplines, home office or flexible working hours. These are the greatest challenges currently faced by companies. Our strategic HR solutions address them all. Deloitte introduces new innovative HR solutions and is a pioneer of new trends in this field. We assist clients in increasing the value of data and in supporting the making of decisions based on data and predictive modelling.
Within three months, 80% of a multinational company’s employees identified by our predictive model as highly likely to leave actually did so.
Our tools bring answers to questions such as: Who could leave and why, how people feel at work or who influences whom at your organisation. HR analytics will assist you in retaining the employees who deliver the top performance, in decreasing fluctuation-related costs and in setting KPIs so as to effectively motivate your employees and measure their added value. It is a new way of analysing human capital: performance management and talent development, measurement of unmeasurable factors (atmosphere, level of trust, motivation, satisfaction etc).
Predictive models are based on historical data provided by the client (demography, records about employees, timesheet data, client segments, performance statistics etc) and require a reliable data analysis and project approach to produce results. However, our experience tells us that thanks to the measures reducing the churn rate or improving employee motivation, the investment will sure pay off (we will prepare a business case for you upon request).
Employee churn prediction
The model provides the answer to the question “Which employees are likely to leave and why?” The identification of vulnerable employees and risk factors is key in reducing the churn rate. To develop the model, we first need to have all relevant data about the past and present employees in one pile and interconnect them. Afterwards, we extract pieces of information from the data referred to as predicators (there may be hundreds of them). In the next step, we look for the predicators that best explain the employee’s departure, and create a predictive model. Finally, we assess the accuracy, structure and inner logic of the model. The resulting model quantifies the risk of departure for each employees and lists the most critical factors exacerbating the risk. The factors and their strength may be subsequently examined at the level of the entire organisation, with corrective measures introduced in order to eliminate them.
For example, one model has brought the surprising finding that employees are at greater risk of leaving if they are promoted to managerial positions too fast. Several interviews with leavers and freshly promoted employees has confirmed this hypothesis and revealed the cause. The subsequent minor adjustment to the rules of promotion bore fruits in that it reduced the churn rate and increased employee satisfaction.
Setting the correct motivation indicators (or “KPIs”) is a complex task and a lively topic in any organisation. On one side is the CFO and shareholders who demand growth, revenues, profit and margin. On the other stand line managers, who are in the dark and who, based on their knowledge of the field, define KPIs and targets that are comprehensible, tangible and influenceable for their people (referred to as the “SMART goals”). In good faith, they all hope that the KPIs they have agreed on meet to the greatest possible degree the strategic goals required by the CFO and the shareholders for the future.
Predictive motivation modelling tells us what operating KPIs actually affect the target strategic indicators, how strong the effect is and how best to combine operating KPIs so as to maximise the effect. The motivational model is based on the quantitative analysis of historical data and affects various functional units with different sets of operating KPIs. Besides the setting of motivation, the KPI model may also be used in measuring the performance of branches and support units, or the added value of an individual employee.
Deloitte introduces and recommends innovative HR solutions. The solutions, which have been created by our partner organisations, are “out of the box”, only take up several minutes of the employee’s attention and the results of the survey are available in less than a week. The HR tools presented herein are part of the Deloitte Experimental Lab – a lab where tools are subject to trial tests. The results of the tools are thus considered to be indicative before the tests have been finalised in their entirety and we are more tolerant in assessing how smooth the process of their implementation is.
The Frank tool will help you identify the key employees at your company. Who influences whom, who people respect most and who they do not like, who motivates them and who drains energy from them. You will learn how to use the social network analysis in order to increase you team’s potential. You will identify informal leaders and influencers as well as silent toilers, who do not talk much but without whom things would fall apart. You may even identify blockers, “dogs in the manger” and competing cliques that only harm your company. Frank offers all this – all you need to do is fill in a short questionnaire. However, the questionnaire is but a starting point. In order to assess the survey results, an experience consultant is at your disposal, who will mediate the results to management, ensure their correct interpretation, identify problematic areas and suggest how they may be solved. The Frank tool is supplied to us by the partner company PurposeFly.