Analytics and the Front-Line Workforce

Analytics is a hot idea that will likely be topical for a decade more, much like competencies and employment brand were (and are). The best selling book on the subject is Thomas Davenport’s Competing on Analytics. The term “analytics” — if you want a really sophisticated definition — just means “let’s crunch some numbers.” One of the reasons it’s topical is that our internal systems are capturing far more numbers than ever before.

In recruiting, to the extent analytics have been used, the focus has been on internal recruiting processes. Recruiting departments want to reduce cost-of-hire and time-to-fill and thus may apply some number-crunching to find where they can make improvements. However, the big payoff comes when recruiting can affect operations by improving quality of hire. The recruiting function needs to make the effort to shift its focus from the comfortable world of its own operations and instead spend more time in partnership with the business units to see how recruiting can make a difference there.

Nowhere is analytics more important than in the recruitment of front-line workforces. Robert Yerex, chief economist at the workforce-management vendor Kronos, points out that in many industries the number of front-line workers is so large that you can easily get enough data for sophisticated analysis, and even small improvements add up to very large savings. The recruiting function is a particularly important part of HR for the front-line workforce because these workers typically don’t stay that long. The organization is counting on recruiting to get people who hit the ground running and fit sufficiently well that they don’t leave after the first few weeks. If recruiting fails at this then it creates a huge cost for the organization.

There are many ways analytics can help recruiting functions improve the quality of front-line workers (and we’re getting into details in the April 2009 issue of the Journal of Corporate Recruiting Leadership). Let’s just look at one (as shown in the graphic above as an example) to give you a flavor.

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A simple analysis of retention by source of hire can show recruiting how they should aim its sourcing efforts and even lead to quantifying how much extra value one source creates compared to another due to higher retention. This analysis might completely overturn conclusions of a typical cost per hire analysis since retention can be so valuable to a company that it overwhelms the different in cost in using a particular source.

David Creelman, CEO of Creelman Research, is a globally recognized thinker on people analytics and talent management. Some of his more interesting projects included:

  • Conducted workshops around the world on the practical aspects of people analytics
  • Took business leaders from Japan’s Recruit Co. on a tour of US tech companies (Recruit eventually bought Indeed.com for $1 billion)
  • Studied the relationship between Boards and HR (won Walker Award)
  • Spoke at the World Bank in Paris on HR reporting
  • Co-authored Lead the Work: Navigating a world beyond employment with John Boudreau and Ravin Jesuthasan. The book was endorsed by the CHROs of IBM, LinkedIn and Starbucks.
  • Worked with Dr. Wanda Wallace on “Leading when you are not the expert” which topped the “Most Popular List” on the Harvard Business Review’s blog.
  • Worked with Dr. Henry Mintzberg on peer coaching, David’s learning modules are among the most popular topics.

Currently David is helping organizations to get on-track with people analytics.

This work led to him being made a Fellow for the Centre of Evidence-based Management (Netherlands) for his contributions to the field.

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1 Comment on “Analytics and the Front-Line Workforce

  1. Analytics may be the new term of art, but since the early days of the industrial revolution we have had to measure in order to manage.

    The first steps involve deciding what matters and then finding a way to measure those things to provide timely, actionable information.

    We typically need to measure both independent and dependent variables to see if our initiatives deliver the desired results and provide an acceptable economic return.

    With a meaningful measurement system in place, managers can then evaluate cause and effect relationships, while remaining mindful of the correlation vs. causality trap.

    In 1980, Harvard Business Review published an article entitled “Job Matching for Better Sales Performance”. The authors analyzed turnover and sales performance, as a function of whether or not individuals were “job-matched” before hiring. Job matching essentially involved performing a job analysis to determine “what it takes” to perform well in the position of interest and then devising measurement methods (e.g. job-matching assessments, simulations and/or structured interviews) that validly determine whether an individual “has what it takes”. This process not only works exceptionally well (for any position), but also happens to be what the U.S. Department of Labor’s “Uniform Guidelines on Employee Selection Procedures” requires of employers. We can measure individual and organizational performance.

    Similarly, best-in-class pre-employment screening assessments have shown their ability to identify honest, dependable, hardworking, drug-free applicants. Does any employer want the other kind? Yet, we know that retail employees steal as much as shoplifters and 80% of the illegal substance abusers in the U.S. have full time jobs. The judicious use of pre-employment screening assessments systematically reduces turnover, absenteeism, tardiness, sick days and workplace accidents, as well as theft of money, property, data and time. We can readily measure all these enervating factors, except for theft which often goes undetected.

    Finally, analytics (e.g. The Conference Board study of studies) have already established the value of employee engagement, as the biggest productivity and retention lever available to business, today. And now, thanks to a research-based survey, funded by twenty four major corporations, we can measure and manage employee engagement like never before. The comprehensive new survey provides more than just an employee engagement score, it provides the knowledge, information, insight and direction that business leaders need to manage employee engagement, superbly.

    Here we have three things that matter, that we can measure very well. The oldest of them has been around for more than three decades and the newest for the past decade. If recruiters and employers want to jump on the “HR Analytics” bandwagon, these would be three really good places to start, because three- and four-digit ROIs have already been confirmed.

    As the article correctly states: “… the big payoff comes when recruiting can affect operations by improving quality of hire. The recruiting function needs to make the effort to shift its focus from the comfortable world of its own operations and instead spend more time in partnership with the business units to see how recruiting can make a difference there.” Amen.

    Richard S. Melrose
    r.melrose@vision21.us
    http://www.vision21.us

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