Quantifying HR: 


Basics of HR Analytics
David B Turetsky
15 May 2015
 Contact Information

David B Turetsky, HCS

ADP, Product Management
Vice President, Chief Product Officer, ADP
DataCloud
!
Cell: +1 (508) 287-3474
Email: [email protected]

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 About David B Turetsky

As the Vice President, Chief Product Officer, ADP

DataCloud, David is responsible for developing products
and services to deliver innovative products and services
for ADP clients. He provides vision, leadership and
strategy for ADP’s efforts around Big Data.

David has more than 25 years of experience in HCM, HR,

HRIS, Talent Management, Compensation and Big Data as
an analyst, manager, executive, consultant and
entrepreneur. His passion is manager empowerment and
employee engagement through total rewards management.
It has been the topic that he often presents to large
audiences at national HR conferences such as HR
Technology, SHRM, PIHRA, and APA. In addition, David
has been published in WorldatWork Journal, HR Executive
magazine and other industry publications.
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 Goal for this presentation

• Understand the business environment we are

operating in
• Common understanding of the problem
Quantifying HR today
• Drive practical examples of how HR can bring
value to the business
• How we can help our organizations prepare for
this challenge

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 Agenda

• Trends affecting HR
• Small Data/Data/Big Data
• Strategy Supported by Data
• Business Intersection with HR Strategy
• HR Driving Business Value

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Trends affecting HR

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 The Cause for Change

Will you provide benefits?

Taking Control of Will you limit hours?
Healthcare Reform Do you have CDHP and wellness?
Will you outsource?

Do managers have the right tools?

Making Smart Are you retaining top talent?
Investments in What is your comp strategy?
People Do you have succession plans?

Do you have the right tools?

What is your social media strategy?
Personalization of Can your culture support personalization?
Employee Do generations demand differentiation?
Experience

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 Trends in the Marketplace

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 What have we heard?

“  ”
Business  Leaders Data  is  driving  our  businesses  to  differentiate  
from  competitors  where  margin  and  cost  
pressures  are  forcing  innovation  from  every  
conceivable  direction.
“  ”
Sales Better  targeting  of  sales  pursuits  to  those  
individuals  who  search  for  our  products,  go  to  our  
websites,  and  participate  in  our  webinars.

“  ”
HR  Leaders Clients  are  no  longer  satisfied  with  receiving  
tables  of  data  or  transactional  reports  showing  
administrative-­‐focused  information.

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Small Data/Data/Big
Data
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 Data

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 Data Strategy

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 Data Scientist

Job Description Essential Qualifications

As a member of a Business Intelligence and At least 5 years of experience such as analyzing

Analytics Team, you will analyze customer data and data and/or building analytical models using SAS.
build high-end analytical models for solving Master's degree in statistics, mathematics or
business problems, such as customer interaction, computer science. Demonstrated ability to apply
behavior, portfolio, etc. The duties will include data statistical or data mining techniques to solve
preparation & analysis using statistical software. business problems. Ability to extract and prep data
The candidate should be able to interpret the results from relational databases, Excel and text files for
in a clear and concise format to be presented to the use with SAS Software. Thorough knowledge of
Senior Executives in business terms. supervised and unsupervised modeling techniques.
Ability to work independently in all aspects of data
! modeling, from sourcing through final presentation
of the findings. Experience with SAS Enterprise
! Guide. Ability to work with the business users and
IT. Excellent verbal and written communication
! skills. Ability to communicate with people of
! various technical and business backgrounds,
including the ability to explain difficult technical
! concepts in simple terms to business users.
Ability to work independently and with a team
! environment.

!
!
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 Business Data Systems

Small  Data   Data   Big  Data  

Spreadsheets   Order  processing   Linkages  
Word  Documents   CRM   Visualization  
Access  Databases General  Ledger Tools

REFERENCED  
SAVED  LOCALLY SAVED  CENTRALLY
COLLECTIVELY

Integration Value

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 Integration and Value

By themselves, the data are transactional

“receipts” from processes and not intended as
measurements of the transaction:
• Business plan
• Presentation to potential clients
• Expense reimbursement
• Sales transaction
• Cost of Goods Sold

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 Human Resource Data Systems

Small  Data  
Compensation   Data   Big  Data  
Spreadsheets   HRIS   Scorecards  
Performance   Payroll   Dashboards  
Evaluations   Benefits  System Analytics
Succession  Planning
REFERENCED  
SAVED  LOCALLY SAVED  CENTRALLY
COLLECTIVELY

Integration Value

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 Common HR Processes and Data

Recruiting   Performance   Terminations  

Requisitions   Goals     #  of  Voluntary/
Candidates   Goal  Percent   Involuntary  
Time  to  Hire   Completion   Total  Terms  
Applications Evaluation   Term  Reasons
Completion

Learning  
Compensation   Succession  
Course  Attendance  
Budgets   Successors  
Enrollments  
Guidelines   Candidate  Diversity  
Development  Plan  
Spend   Successor  Readiness
Progress
Red  Circles

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 HR Data Challenges

• HR Data is a collection of transactions

• HR, Finance, Supply Chain, and CRM capabilities
have specific missions out of sync
• Financial Tracking
• Record Keeping
• Service levels
• Inconsistent data definitions, vocabulary, and
mental models
• First exposure of data opportunities provides a
glimpse into the abyss
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 How HR is involved in a Business Crisis/Change

Major HR Projects are often driven by business

needs while under severe time pressure
• “…integrate 500 acquired associates.”
• “…reduce our people costs by 5% within six
weeks.”
• “…consolidate sales, marketing, and product
teams.”
• “…reengineer our service delivery model.”
• “…relocate our plant…”
The value of core HR Programs and Processes are often eroded by,
rather than supported by these activities.
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Business Intersection
with HR
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 Business Strategy Measurement

• Scorecard Metrics
• Earnings Per Share
• Net Income
• Earnings Before Interest Tax Depreciation
and Amortization
• Metrics are tracked over time and major changes
and/or variances against plan are examined

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 Effects of a change in business strategy

• Communications to groups affected by the

change
• Systems, processes, philosophies and operating
plans change
• Operational Changes
• Finance changes
• HR changes

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 HR Strategy Measurement

• HR Scorecards
• Turnover
• Engagement
• Employee Performance
• Metrics were tracked over time and major
changes examined
• Did this result in changes to HR Process or
Strategy?

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 HR Scorecard/Dashboard

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 Talent Management Process and Data Issues

Recruiting Learning Performance Succession Compensation

Where  are   Are  employees   How  can   Do  we  have   Are  we  
“successful”   taking  the   ratings  be   the  right   compensating  
employees   right  courses? calibrated   people   the  right  
found?   across  a   identified  as   people?
! business/the   successors?
organization?
What  skills   Can  we  better   Where  are   What  key   Do  we  pay  too  
does  a   leverage  our   concentrations   positions  do   much  for  
“successful”   learning   of  lowest   not  have   certain  roles?
employee   investments? performers? successors  
exhibit? identified?

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 HR using metrics

• To move away from “Reporting” metrics and

towards more useful business support:
• Educate HR on business metrics meaning and
impact
• Facilitate discussions with business to stay
current on changes to strategy
• Provide correlations between HR Metrics and the
Business Strategy
• Redevelop processes to align with a focus on
alignment, improvement and measurement

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 HR and Business Strategy

Alignment of HR Process with Business Strategy:

• Review the goals of the organization
• Test for alignment
• Redevelop guiding principles of HR to match
business strategy
• Goal to be that Talent Strategy should drive the
business forward

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Strategy Supported by
Data
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 Scientific Method

Scientific  Method Applied  to  the  business  world

Make  a  hypothesis Develop  a  business  strategy

Observe  and  measure  sample  of  the   Observe  and  measure  the  effect  of  the  
population strategy

Analyze  the  results Analyze  the  strategy

Infer  the  effectiveness  of  the  strategy  and  

Infer  conclusions  from  the  results
potentially  change  strategy

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 Key Business Metrics

INCREASE   REDUCE   INCREASE  

MARGIN COST PROFIT

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 Measurement Driving Business Strategy

Measurements:
• Turnover
– Year-over-Year
– Include industry and
Introduce   company benchmarks
safety  
• Safety Incidence
Reduce   training Reduce  
turnover skill  gaps – Year-over-Year
– Include industry and
company benchmarks
• Competency Gaps
Increase  
Margin – Highest gaps/strengths
– Organizations with biggest
gaps

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 Measurement Driving Business Strategy

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 Measurement

Skill  Improvement

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 Observations

Skill  Improvement

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 Analysis

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 Draw conclusions

Our hypothesis was that to increase margins, we

should reduce turnover, increase safety training,
and reduce skill gaps.
Through observation, we can infer that this may
work, if we focus our efforts on…
• Improving the skills of our current workers
• Hiring workers with better skills
• Using contractors to fill immediate gaps

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 Measurement Driving Business Strategy

Measurements:
• Time to hire
– Period-over-period
– Include industry and company
Hire  
different   benchmarks
Lower  time   skills Increase   • Number of New Hire Terms
to  hire manager   – Organizations with losses
training
– Average Skill Profile of Loss/
Success
Reduce   • Courses attended by Managers
Costs
– Performance – Employee and
Group
– Engagement Scores

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 Reducing Costs

Customer Impact of
KPIs Turnover Net Income
Satisfaction change
Methods Measurements
Safety  
Lower Higher Higher Medium
Incentives

Add  goal  to  

Medium Higher Medium High
"Manage  Costs"

Reduce  Merit  
Higher Medium Lower Medium
Budget
Increase  
manager   Lower Lower Medium Low
training

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 Measurement Driving Business Strategy

Measurements:
• Turnover of Key Talent/Hi-
Pos
– Period-over-period
Incent  
Innovation – Include industry and
Improve  
Retain  key   company benchmarks
Performance  
staff/Hi-­‐Pos Mgmt • Incentives Earned
– # of Patents
Increase   – P&L of Business
Profits • Ratings Distribution
– Performance –
Employee and Group
– Engagement Scores

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 We have a strategy, now we measure it

• Constantly monitor criteria

established during the
business case/decision
• Make course corrections and
measure their impact on the
goal and strategy
• Measure again at a future time
and reexamine the goal and
strategy

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What do I do with this?

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 Start to jot down what you would ask

• Do happy employees translate to more

productive employees?
• Can compensation growth be slowed without
loss of performance growth?
• Do “better” managers make for higher employee
engagement scores?
• What leading indicators best predict successful
employees in our company?

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 Deconstruct the question…

What leading indicators best predict successful employees in our

company?
• Definition of a “successful employee”
• Construct the hypothesis “We can predict who is a successful
employee by looking at background information we already
collect in pre and post employment circumstances.”
• Collect data: Performance scores by employee historically,
Warnings or other documented Employee Actions, Promotions,
job changes, Schools attended, Skill gaps, Absence/Lateness
data, Manager changes, Department profits, etc.
• Derive the “successful employee” variable as the dependent
variable
• Find co-linear or data that answers the same question twice
• Run analyses to show the variables that best predict “successful
employees”
• Conclude analyses with a model of how a successful employee is
predicted
• Announce the results and test methods of replicating the
successes in future hiring and promotion activities

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 Ten Steps to use this information

• Learn what your business does by reading

publicly available information (proxy/10-K/Annual
Report) or by asking the owner/leaders - parters
or mentors
• Do independent research on your industry
• Discuss with your leaders current issues
• Take on-line courses on Data Science, HRIT
managers/leaders get a certificate on Data
Science
• Interdisciplinary internal corporate discussion
regarding data with the goal of developing a Big
Data corporate model
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 Ten Steps to use this information

• Get on the team and lead discussions of how HR

should lead, not just “help” the Big Data
initiatives - settle for being on the team
• At every chance, rebuild HR processes to
consider measurable business outcomes
• HR data systems should be enhanced with the
capabilities to support the business changes
• Proactively develop models for future growth,
change and alternative business scenarios in
order to provide appropriate support for
business strategies
• Continually pursue excellence in providing
outstanding customer service through data
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 Five “easy” Steps to successful HR Data Science

• Wear a lab coat - dress for the job you want

• Data Science for Dummies
• Ask deeper questions when a report request
comes in… Think about how you use data and
can make suggestions about structuring an
analysis
• Listen to what is going on in your organization
• Make suggestions about how you would see data
working better based on what you hear/know

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In Conclusion…

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 Summary

• Educate HR on Business metrics

• Talent and HR processes are considered
Business Processes
• HR providing Stakeholders with appropriate data
to make good BUSINESS DECISIONS
• Think like a data scientist and finding
relationships in data to solve real business
problems

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 Thank you
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