HR Departments Invaded By Data Scientists

As leading HR departments turn to 'talent analytics' for a wide range of staffing issues, CIOs are at the center of this data-driven transformation

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Employee engagement is a leading indicator of talent retention at Coca-Cola Enterprises. And one of the biggest boosters of employee engagement numbers is access to on-the-job learning, so Crumley's team is trying to figure out how to make training opportunities more universal. For example, why are folks in this shift at this plant not taking classes as much as other employees in that line of business? With answers to questions like that, HR can intervene to address the core reason, whether that's an accessibility problem or a manager who needs more coaching. Crumley says the effort will gain even more steam when HR is able to show, through data analytics, a correlation between taking a specific training course and an improvement in sales or productivity.

At call-center provider NOVO 1, CTO Mitchell Swindell has implemented a predictive hiring tool from Evolv. Applicants complete a Web-based application that screens for attitude, propensity for customer service, and voice capabilities. The software also shows the candidate what it's like to work in a call center in hopes of screening out those who would be a poor fit in the high-turnover industry. The tool then gives the candidate a red, yellow or green rating, at which point candidates rated green or yellow are invited for in-person interviews. The hiring decision is still in the hands of a human, but the system has predicted with 80 percent accuracy the company's top performers, based on 90-day follow-up data on the hired employees. Since introducing the algorithm-enhanced hiring system, tenure is up by 25 percent, agent productivity has increased 30 percent, and the overall staffing budget has decreased 11 percent. Swindell has integrated Evolv with the company's payroll, workforce-management and proprietary quality systems to help develop a more nuanced profile of the best employees.

At Chiquita, Ledford is exploring predictive analytics to help the company find, train and retain its "bananaeros"--experts in growing bananas. "Those guys are really hard to find, as bananas have taken a backseat to coffee and tourism," says Ledford. Analytics could enable managers to predict which lower-level employees "could become our next wave of banana folks," says Ledford, and determine the right training and grooming to make that happen.

Employee Tracking

There's also a gold mine of information in how people move through an organization, and a handful of companies are looking at physically tracking employees--often via RFID-enabled badges--to find out how people work and what impact that can have on business outcomes.

"The barrier at this point is not the technology," says Waber, whose Sociometric Solutions is an early provider of sensor-based analysis. "I can tell you how much more money a company makes when two employees eat lunch together. We can do extremely sophisticated things. The challenge is that organizations are not used to looking at themselves this way."

When GM's Arena was senior vice president of leadership development at Bank of America in 2010, the financial services company used sensors to track 90 call-center workers over the course of several weeks and found that those in the most cohesive networks were the most productive. By switching from solo to group break times, encouraging more socialization, agents improved efficiency by 10 percent. "As silly as it sounds, it worked," says Arena. "The analytics told us it was probably the right thing to do." Sometimes it's as simple as moving desks closer together, says Waber. Steelcase's Sullivan has discovered that the size of lunch tables can have an impact on productivity. You can't force people to interact more, says Waber, but based on the data, you can "engineer serendipity."

Although Arena conducted a number of experiments using sensor data at BofA, he's not quite ready to start tracking workers at GM. "I'm a huge advocate of sensor work," Arena says. "But it's laden with trust and privacy issues and a lot of organizations just aren't ready for that. It can be a bit of a slippery slope."

Praxair is conducting a pilot using sensors on its remote workers. The system will measure how long it takes a worker to, say, install a tank for a customer, by monitoring their movements via a sensor on their protective equipment. The sensor also monitors workers for exposure to harmful gases. If gas is detected, an alarm goes off and the monitoring center will attempt to communicate with the worker. Franciosa envisions integrating the sensor data into other corporate systems to uncover correlations between events and particular locations, types of employees, or certifications.

The Importance of Transparency

Franciosa expects employees to put up some resistance to being physically tracked, much like the pushback the company encountered when it was first placing computers onboard its trucks. "It was viewed as Big Brother wanting to know how fast I drive or how hard I brake," says Franciosa. "The way to alleviate that is transparency. People won't like being physically monitored if they think we're trying to find out how long their break was. So we have to be completely transparent that we are using this for safety and long-term productivity. They'll recognize the value in that."

HR collects all kinds of sensitive employee information, but employees see physical tracking as particularly intrusive. "It is the boundary to cross," says Steelcase's Sullivan. All of Steelcase's sensor-related experiments are opt-in. Company analysts see only aggregate data, not individual histories. And Sullivan's team communicates the process and the intentions not just to those who have signed up, but also to everyone on the campus.

"In the U.S., employees don't really legally have protections around this data. A company can track you wherever you go and listen to all your conversations," says Waber. "But that defeats the purpose of this approach, which is trying to help people work better, be happier and stay at their jobs."

Communication is critical with any collection and analysis of people data--not just sensor data. "I don't think we're doing anything that people haven't been trying to do for years," says Informatica's Stoner. "But we have to say what we will do with that data."

Praxair's Franciosa has a close partnership with his legal teams around the world to navigate the various data privacy and protection issues in each country. "But even once we understand that we can have this data, we have to be very transparent and say, here's why we want your picture or your talent profile," Franciosa says. "That goes a long way toward gaining both credibility and traction."

The Role of Data in the People Business

"What's really happening right now is a shift in HR from an art to a science," says Crumley of Coca-Cola Enterprises, who's currently exploring how social network data and gamification might become part of his HR analytics platform. "A lot of HR teams are trying to figure out how to make that shift quickly so it's no longer HR sitting around waiting to be pulled in, but HR coming to the table with nuggets of wisdom."

Data analytics could enable HR to elevate itself from a tactical support function to a business partner on strategy, which ought to sound pretty familiar to CIOs.

But there are limits to HR's data-driven transformation. "[Analytics] are all about probability, and there's just so far you can go with probability," says Crumley. "If you want to figure out how many employees you need to launch a new product, it can get you in the right ballpark. When it comes to predicting turnover, it's not an exact science. People are people."

"It's never black-and-white when you're talking about people," says Stoner of Informatica. While some folks get stars in their eyes when talking about big data, Stoner often sees a bigger haystack to sift through. But analytics, she says, help point companies in the right direction. "In HR, we live in a world where data brings more questions. You always have to look beneath it," she says. "It's not an exact science. But at least it gets us looking at the right part of the haystack so we can get to the answer faster."

That's why GM's Arena says his talent analytics will never be fully automated. "Sometimes we get projections wrong for all kinds of reasons. It can take several iterations. But HR still loves it, because it equips them to make intelligent decisions for their business partners."

9 Critical Success Factors for Talent Analytics

IT and HR leaders who have deployed workforce analytics systems offer these tips for success

Lay the foundation. Aim for a single source of HR information, if possible.

Account for imperfections. "We've got our foundational issues, for sure, but if you wait until it's completely perfect, you won't get anywhere," says Michael Arena, GM's director of global talent and organizational capability. IT can build reconciliation processes and automated audits to help HR with data issues.

Start small. Marc Franciosa, CIO of Praxair, began with an analytics pilot to map the company's high-potential employees. "If we had tried to do one big-bang workforce analytics project, it would never have gone anywhere," he says. "You have to get some traction in order to get credibility."

Tap internal experts. Both Franciosa and Arena have taken advantage of statisticians and others from their corporate R&D groups to develop their talent analytics programs.

Share the load with HR. Take advantage of HR and IT's complementary skills. IT can focus on vendor management, security and deployment, while HR might manage requirements gathering, process standardization and communication.

Bring in business know-how. David Crumley, VP of global HR information systems for Coca-Cola Enterprises, works with business leaders from functions such as supply chain, sales and finance to determine what data will drive talent analytics.

Hire external change-management help. Typically, HR leads change management in an organization. But avoid DIY change management in analytics efforts, warns Mark Endry, CIO of Arcadis U.S., who recently spent six months as interim SVP of HR. Hire external help to guide HR through its big changes.

Take action. "Everyone wants to have more data, but we have to ensure that folks know how to use it," says Crumley, who had to do more hand-holding than he initially anticipated. "It's not that anyone is pushing back, but you have to embed the use of the data into the [corporate] DNA."

Democratize the systems. For people analytics to truly deliver, they need to be self-service tools that business managers and leaders can use. "Early on, we thought the customer [for these tools] was HR," says Crumley. "But it's the business leaders that control these decisions daily."

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Copyright © 2013 IDG Communications, Inc.

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