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© Reed Business Information Ltd© Reed Business Information Ltd
• A recording of this webinar and the slides will be made available within a week of this event
• To listen in, please make sure the sound on your computer is un-muted and your speakers are turned on/headphones are plugged in
© Reed Business Information Ltd
Laura MerryleesHost
XpertHR
Khurram ShamseeHead of the London employment team,
DAC Beachcroft
Dr. Sjoerd van den Heuvel
Researcher and lecturer, University of
Applied Sciences Utrecht
Charlotte VlaarkampCommercial Product Manager, XpertHR
#xhrdata
• The use of people data to monitor changes in workforce composition
• Using this information to pinpoint retention issues
• Practical examples of how people analytics can resolve retention problems
• The data protection implications of people analytics activities
• XpertHR’s new product concept
© Reed Business Information Ltd
© Reed Business Information Ltd
Khurram ShamseeHead of the London employment team,
DAC Beachcroft
Dr. Sjoerd van den Heuvel
Researcher and lecturer, University of
Applied Sciences Utrecht
Charlotte VlaarkampCommercial Product Manager, XpertHR
#xhrdata
• People analytics: The phenomenon
• People analytics: Applied to retention
• People analytics: Real life examples
© Reed Business Information Ltd
© Reed Business Information Ltd
“the systematic identification and quantification of the people drivers of business outcomes, with the purpose
of making better decisions”
© Reed Business Information Ltd
© Reed Business Information Ltd
© Reed Business Information Ltd
6Actions
5Insights
4Analytics
3Metrics
2Data
1Opinion
© Reed Business Information Ltd Source: Investing in People Second (2nd) Edition, Cascio & Boudreau
© Reed Business Information LtdExamples and formula’s based on: Investing in People
Second (2nd) Edition, Cascio & Boudreau
• Employee separation, also called employee turnover, is the situation where an employee permanently leaves an organisation.
© Reed Business Information Ltd
© Reed Business Information Ltd
Quantity Quality Cost
© Reed Business Information Ltd
Quantity Quality Cost
© Reed Business Information Ltd
On which one should you focus?
Functional versus dysfunctional
© Reed Business Information Ltd
Costs are easily
100% to 250%of departing person’s salary,
depending on the employee’s skill and level of responsibility.
• Computing turnover rates
Number of turnover incidents per period──────────────────────── ×100
Average workforce size
© Reed Business Information Ltd
• Step 1: Calculate separation costs
• Step 2: Calculate replacement costs
• Step 3: Calculate training costs
• Step 4: Calculate performance differences
• Step 5: Calculate lost productivity & lost business
5 step approach:
Note: Some costs may not be applicable, depending on the type of turnover (i.e. voluntary quits, for cause dismissals, involuntary layoffs). Furthermore, the type of costs may also differ per country, due to e.g.
legislation.
© Reed Business Information Ltd
• Exit interview
• Administrative time
• Separation pay
• Unemployment tax
• Pension and benefit payouts
• Supplemental unemployment benefits
• Severance pay in lieu of bonus
• Accrued vacation and sick pay
• Lawsuits by aggrieved employees
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
• Communication of job availability
• Pre-employment administrative functions
• Entrance interviews
• Testing
• Staff meetings
• Travel/moving expenses
• Post-employment acquisition and dissemination of information
• Employment medical exams
• Rehiring of former employees
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
• New employee orientation literature and activities
• Formal training
• Instruction by experienced employee
© Reed Business Information Ltd
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
• DP is difference in performance between leaver and replacement (in money)
• is summation over all leavers and their replacements
• CRl is the compa-ratio of the leaver
• CRris the compa-ratio of the replacement
• MPiis the annual rate of pay at the midpoint of the pay grade in question
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
CRl= 0.80
CRr
= 1.0
MPi= $50.000,-
DP = (0.80 − 1.0) × $50,000
DP = (–0.20) × $50,000
DP = –$10,000
CRl= 1.0
CRr= 0.80
MPi= $50.000,-
DP = (0.80 − 1.0) × $50,000
DP = (0.20) × $50,000
DP = $10,000
These costs are added to total
turnover costs because the leaver
was replaced by a lesser performer.
These costs (DP) are subtracted from
total turnover costs because the firm is
gaining an employee whose performance
is superior to that of the employee who
was replaced.
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
• Cost of additional overtime to cover the vacancy
• Cost of additional temporary help
• Wages and benefits saved due to the vacancy (so subtract these!)
• Cost of reduced productivity while the new employee learns the job
• Cost of lost productive time due to low morale of remaining employees
• Cost of lost customers, sales, and profits due to the departure
• Cost of additional (related) employee departures
Separation costsReplacement
costsTraining costs
Lost productivity & Lost business
Performance differences
© Reed Business Information Ltd
“I cannot keep this position filled”
“Nice that we have low employee turnover, but
is it worth it?”
“We cannot get enough people to join as new hires”
• How can we predict which of our employees
are most likely to leave in the next year?
• Which factors cause our pivotal talents to
leave?
• Which factors cause our pivotal talents to
stay?
• How do the drivers of employee retention
vary across different segments of our
workforce?© Reed Business Information Ltd
© Reed Business Information Ltd
© Reed Business Information Ltd
© Reed Business Information Ltd
© Reed Business Information Ltd
© Reed Business Information Ltd
© Reed Business Information Ltd
© Reed Business Information Ltd
Dr. Sjoerd van den Heuvel
• Conduct of data analytics involves processing of personal data of employees, former employees and job applicants, etc
• Need to comply with principles of the Data Protection Act 1998 and (from May 2018) the General Data Protection Regulation
© Reed Business Information Ltd
• Ordinary personal data
Consent?
Legitimate interests?
• Sensitive personal data
Express consent?
Compliance with obligations or rights in connection with employment?
Equal opportunities monitoring?
© Reed Business Information Ltd
• Limit data to that which is truly needed for analytics in question
• Anonymisation or pseudonymisation?
• Can sensitive personal data be avoided?
• (Consider documenting approach in privacy impact assessment)
© Reed Business Information Ltd
• Detailed requirements under GDPR to inform data subjects in writing of: Justification for processing their personal data
(including specific legitimate interests)
Retention period
Third-party recipients
Their rights - including access, objection, erasure and ability to complain to a regulator
• Incorporate into data protection policies and keep up to date
© Reed Business Information Ltd
• Data should be handled securely, with access limited on a “need to know” basis
• A written agreement is required with any third party recipients of data (note “processor” obligations under GDPR)
• Transfer of data should follow established internal protocol and security procedure
• Transfers out of the EEA must comply with specific requirements (eg EU model clauses)
© Reed Business Information Ltd
Key questions answered:
• “Is there an overall problem with retention in your organisation?”
• “Where are the turnover hotspots in your organisation?”
• “What are the key drivers of employee turnover and retention?”
© Reed Business Information Ltd
© Reed Business Information Ltd
Your account manager
http://www.xperthr.com/people-analytics/
@people_analytix
© Reed Business Information Ltd
© Reed Business Information Ltd
Laura MerryleesHost
XpertHR
Khurram ShamseeHead of the London employment team,
DAC Beachcroft
Dr. Sjoerd van den Heuvel
Researcher and lecturer, University of
Applied Sciences Utrecht
Charlotte VlaarkampCommercial Product Manager, XpertHR
#xhrdata
• Good practice manual: People analytics -bit.ly/xperthr-people-analytics
• Good practice manual: Retaining staff -bit.ly/xperthr-retention
• On-demand webinars: bit.ly/xperthrwebinars
© Reed Business Information Ltd