HCM Software Translates Data into Actionable Information
Catching Up to Modern Business Intelligence
Business intelligence is increasingly able to help organizations uncover the hidden stories behind their data. Retailers capture rich customer data and analyze it to predict customer behavior. As described in a fascinating narrative by the New York Times, retail giant Target used customer purchase history to identify pregnant shoppers and approximate their due dates based on a list of 25 products and then was able to send enticing coupons and offers based on a customer’s approximate stage of pregnancy. If Target can use business intelligence to predict an event so personal that its marketing practices ultimately sparked some notable controversy, shouldn’t HR be using analytics to predict employee behaviors, prevent undesired turnover, identify emerging skill gaps, and improve succession planning?While business analytics are producing actionable data for many areas including marketing, product management, manufacturing, etc., HR continues to lag behind. In April, the online publication HR Technologist declared 2017 the year of the HR Data Expert. In its 2017 report on HR Technology Disruptive Trends, Deloitte found that “people analytics” are at last taking hold in many organizations, with significant year-over-year increases in multi-year workforce planning (+26%), the correlation of HR data to business performance (+63%), and the use of that data to predict business performance (+29%). It is significant to note that the organizations surveyed also reported 100%+ increases in their satisfaction with the success of their use of the data.To understand the value of powerful HR analytics for the average company, consider the example below of the many ways that business intelligence can be used to impact turnover.
Using HCM Software to Manage and Predict Turnover
In its 2016 Human Capital Benchmarking Report, SHRM found that the average cost of a new hire is over $4k, but a deeper analysis in a recent article, Placing Value on Turnover Costs, the organization estimated that replacing a salaried employee is as high as six to nine months of that position’s salary, once the impact to productivity is considered. Getting to that number is not easy if you’re not able to measure and analyze the data sets linked to terminations, recruitment, training and productivity. It requires knowing annual revenue per employee, the average number of positions open at anytime, and the number of days between a new hire’s start and their first fully productive day on the job. Without powerful analytics, most organizations won’t be able to properly calculate the cost of turnover or the savings potential of mitigating turnover.Today’s most successful companies, however, are moving beyond measuring costs to instead actually predicting turnover, using business intelligence tools to identify risky hires and at-risk employees. Many organizations study the qualities of long-term workers in order to identify the characteristics that may contribute to their loyalty and then use that data to build a predictive model for selecting new hires that will be more likely to stay.Analyzing the relevant characteristics of employees who have left can be valuable in creating a predictive model to identify at-risk employees. This can be built by measuring and analyzing a variety of factors such as tenure, time since last promotion or salary increase, proximity of the position to the core functions of the organization, most recent performance rating, etc. To improve turnover in a particular department with poor retention history, many aspects of employee data can be compared to another department with lower turnover, allowing an organization to identify possible causes and take preventative measures.
HCM Software Allows HR to Impact Revenue
While some turnover is not predictable or preventable, having the right tools in place to track and measure the cost of turnover, and to identify and predict the causes, can have a significant impact to the bottom line of any company. For this reason, HR can’t afford to leave data and analytics to the realm of finance and technology. Today’s modern HR department must understand and embrace the value of business intelligence and obtain the support from key stakeholders to invest in the HCM software necessary to mine actionable data. Asure Software’s integrated HCM platform empowers clients with measurable insights into the productivity of their workforce.