From the largest Fortune 100 companies to the most innovative startups, Chief Human Resources Officers (CHROs) play an integral role as transformative business leaders of their organizations. Although CHROs lead key back-office processes that support the bottom line, only 20 percent of HR professionals believe they can adequately plan for their company's future talent needs, according to a study by Deloitte on organizational performance. Incidentally, respondents in another survey said that forecasting for headcount was one of the most important use cases of analytics in HR.
Imagine being able to make important business decisions based on robust analytics. If more HR teams had the ability to predict future headcount needs, recruiting departments could plan before an imminent hiring initiative, for example, and they could make relevant predictions for their organizations. Oracle Analytics Cloud is ideally positioned to help CHROs make more informed and timely HR decisions.
Low Unemployment Increases Turnover Risk
According to the Bureau of Labor Statistics, unemployment in the US as of December 2018 is 3.9 percent, the nation's lowest in 19 years. With low unemployment, job candidates are in high demand. For a company conducting a hiring initiative, prospective candidates are harder to find, so recruiters tend to poach employees from competitors.
Similarly, websites like LinkedIn make it easy for employees to passively search for job opportunities and connect with other offers. Once a candidate sets LinkedIn job preferences to "open," recruiters are notified. Scheduling an interview with a competitor is as simple as responding to a LinkedIn message from a recruiter.
Oracle Analytics Cloud can be used to gain insight into employee satisfaction and prevent turnover.
A friend of mine, employed as a senior electrical engineer at a medical device company, expressed interest in a management role within her department. However, because the company did not have an open management position, my friend started a passive job search while still employed and engaged on a project. She has had more than a few opportunities to interview at various companies in the San Francisco Bay Area. Thus, her company is now at risk of losing a senior-level engineer in the middle of a project. Lack of upward mobility is just one reason that an employee may not feel happy and fulfilled.
In a job market where companies are desperate to hire, but candidates have multiple opportunities lined up, what is keeping an experienced employee from leaving worth? To create an environment where employees are motivated to spend 40+ hours a week, CHROs have the responsibility to do everything they can to ensure that their employees feel fulfilled and are motivated to stay.
In a Candidate-Driven Job Market, Forecasting Helps Mitigate Turnover Risk
Determining the "how" in building employee fulfillment is an elusive task. Directly asking each employee or pulling insights from periodic performance reviews may be a starting point, but direct data collection via questionnaire is time-consuming, expensive, and may be subject to bias such as neutral responding.
Instead of a tedious collection process, CHROs can start by examining the data they already have that is associated with the employee lifecycle. Consider the process your business goes through each time an employee is hired, promoted, given a raise, conducts a performance review, or leaves the company. Each of these events has many datapoints associated with it. This type of information resides within your core HRIS, or even applicant tracking system. With Oracle Analytics Cloud, visualizing this data against other fields will help identify trends about your workforce, giving you the tools to forecast, make predictions, and take informed actions.
Attaining the right data to visualize the tenure of each member of your engineering team in terms of location, salary, the last time a raise was given, or even the number of vacation or sick days taken over time is possible with capabilities within Oracle Analytics Cloud. This information could show which engineers fit the demographic of those that have historically left your company. With this intelligence, predictive analysis becomes easier. If a top performing engineer starts taking more vacation days or sick days than normal, this could be a red flag. Predictive analysis could help you understand turnover rates and ultimately develop action plans regarding incentives such as promotions or raises. And, this may prevent the loss of a valuable employee.
Data Analytics in Practice
Extrapolating forward, analytics may be combined with other areas of a business to gain insights into the entire employee journey, including recruiting, onboarding, sourcing, performance, incentive compensation, or goal management. HR has the potential to strategically combine its insights with the organization’s overall business decision making process.
In a recruiting case study with one of the largest mobile providers in the US, the company took job applications of college hires and combined them with each respective employee's performance reviews over time. Doing so allowed the company to discover that SAT scores and college grade-point averages are poor predictors of job candidate success. Better predictors of employee success proved to be experience that showed initiative and leadership, such as starting a club or leading a sports team. Staying ahead of the data analytics adoption curve, this company is seen as a leader in the industry.
In another case, at a global logistics company, data analytics has helped improve employees' sense of fulfillment. The company employs thousands of delivery drivers. The drivers carry handheld devices that accept a signature to designate successful delivery, but those devices also leverage data analytics to provide the driver with an abundance of key information. The devices help solve the famous "travelling salesman problem"—or in this case, travelling delivery driver—allowing drivers to find the quickest path between multiple points and take the most efficient delivery route. Combined with Internet of Things (IoT) devices, these data-driven insights empower the company to increase the number of packages delivered per employee, thus optimizing driver productivity. When productivity per employee increases, the business is more profitable. With these improvements, the company compensates drivers at some of the highest rates in the industry, leading to overall happier employees, lower turnover, and higher retention.
Data tells important stories, and understanding those stories can positively enable employee fulfillment and the bottom line. Oracle Analytics Cloud provides the right technology and predictive capabilities so that you can make prescriptive determinations and take informed actions to improve your business.
In the Deloitte survey, only 19 percent of HR teams were able to derive suggested actions from data insights. To remain competitive in the candidate-driven job market, CHROs have the opportunity to leverage tools like Oracle Analytics Cloud to make better decisions about their people. The HR teams that possess a better view of their employee and candidate data will stake their claims as early adopters before a majority of their competitors do the same.
To learn more about using your data to make better decisions and complement your current strategy, visit the Oracle Analytics Cloud website.
Guest author, Ryan Pasca is an Applications Sales Representative specializing in Oracle Analytics.