2013 HR FLORIDA CONFERENCE & EXPO Using g HR Analytics y to Align g Your Workforce with the Business Strategy August

19 21, 2013 Hilton Bonnet Creek, Orlando, Florida

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Howard Tarnoff
Senior Vice President, Customer Success, Ceridian

Joined Ceridian in March 2011 Drives the strategy and execution of Ceridians customer success program for North America 30-year veteran of the HR Technology industry with companies including Workforce Software, Workbrain, RedPrairie and Kronos

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Agenda
HR Analytics Defined A Research-Based R hB d Vi View of f HR A Analytics l ti
Aberdeen Group Study 2/3 HR directors or executives 1/3 Line of business (primarily VP/C-suite roles) 70% North American, 30% EMEA or APAC

A Case Study Some Critical Takeaways

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HR Analytics Defined
Tools used in finding, retrieving and analyzing HR data. Goal G li is t to ultimately lti t l provide id thi this i intelligence t lli t to managers enabling them to make better decisions that impact HR strategy and business objectives. Applications Workforce optimization (short term) Talent management / Workforce planning (long term) HR service delivery Compensation Headcount and turnover
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Challenges
What is the TOP BUSINESS ISSUE driving your organization's organization s HCM initiatives?

Economic uncertainty forcing the organization to operate more efficiently Organic growth (into new geographies, new channels, etc.) and achieving organizational growth goals Scarcity of key skills in the marketplace (domain/industry specific) Changing employee needs and expectations (generational gaps, geographic differences, differences cultural and lifestyle differences differences, etc etc.) ) forcing new people management techniques Regulatory compliance and reporting issues (employment law, diversity etc.) diversity, etc ) Changing customer needs and expectations

S Source: Ceridian C idi W Webinar bi P Poll, ll A April il 2012

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Barriers to HCM Investments

Percentage of respondents N = 439

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High-Level Strategies

Percentage g of respondents N = 439

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Impact of Analytics on Business Metrics

Average g reported performance N = 103

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Impact of Analytics on HR Metrics

Percentage of respondents N = 439

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Satisfaction with Solution

Percentage g of Respondents N = 439

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Key Organizational Capabilities

Percentage of Respondents N = 103

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Polling Question

To what degree are you currently practicing HR analytics?

a) b) c) d) e) f) Not practicing and have no plans to Not practicing but plan to In the process of defining metrics Metrics defined; using Excel/manual tracking Metrics defined; using a best best-of-breed of breed solution I dont know

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Adoption By Company Size

Percentage of Respondents N = 449

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Source: Aberdeen Group, December 2010 February 2011

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Polling Question
You get an urgent request from the VP of HR for information to make a key operating decision. Which statement best represents how you approach capturing the information? a) Run a series of reports, download to Excel, and merge data to then complete detailed analysis b) Make a quick decision based on your previous experiences due to limited availability of technical resources to gather data needed for analysis c) ) N t Network k with ith your peers t to understand d t d what h t th they h have d done when h f faced d with ith similar issues and limited time to complete detailed analysis d) Gather data and draw on previous experiences to identify the problem; analyze the findings of the data to gain insights; consider the pros and cons of solutions and incorporate the best option into a plan

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A Case Study
Company profile: Manufacturing company producing consumer products 2,000 employees Business strategy: Revenue growth through expansion of sales force Human capital strategy: Grow direct sales force Move sales force to more variable variable, commission-based commission based compensation Business challenges: Slowing revenue growth Difficulty maintaining sales force capacity

HR Analytics can impact business performance

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HR Analytics Three Step Process

To provide real value, identify the issues related to your human capital that impact your companys ability to execute on its strategic initiatives Step #1 Identify and gather th the th data d t to t gain visibility to the issue Step #2 Analyze ay ea and d correlate data to gain insights Step #3 Incorporate co po ate t the e findings into a plan of action

Execute on the plan and monitor ongoing

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Step 1: Identify
What are our current headcount trends?
Sales force capacity (headcount) is shrinking Manufacturing capacity is steady

Most terminations are voluntary

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Step 1: Identify
What Wh t can I l learn l looking ki at t termination t i ti rates t by b job class?
Concentration C t ti of f hi high h termination rates in sales force (both straight commission PG1 and salary plus l bonus b PG2)

Sales force shrinking while sales force management increasing

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Step 1: Identify
What are the monthly trends in sales force terminations and hiring?
Hiring hasnt kept pace with sales force terminations

Sales force termination rate has increased Most sales force terminations are voluntary

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Summary of Step 1: Identify

Gained visibility to fully identify issues:
Capacity and turnover issues with sales force
Rates are increasing g over time High voluntary termination

Current hiring campaigns are not keeping pace with terminations Lack of sales force capacity inhibits revenue growth [assumption]
Identify and gather the data to gain visibility to the issue Analyze y and correlate data to gain insights Incorporate p the findings into a plan of action

Execute on the plan and monitor ongoing

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Step 2: Analyze

What is the tenure of our terminating sales force?

Terminations are g y concentrated highly in the first years of service

More than 75% term in their first 2 years

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Step 2: Analyze
What Wh t hi hiring i sources result lt in i the th lowest l t new hire hi term rates?
Majority of new hires come from external recruiters, internal recruitment, and external job boards

Employee referrals and internal recruiters have significantly higher retention rates.

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Step 2: Analyze
How does new hire experience levels relate to terminations?

Experienced hires are less likely to terminate

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Step 2: Analyze
What is the relationship between term rates and comp plans?
Straight commission reps (PG1) terminate at a greater rate than salary and bonus plan reps (PG2)

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Summary of Step 2: Analyze

A l Analyzed d correlations l ti to t gain i insight: i i ht
Terminations are highest in the first years of service. Termination rates vary y considerably y by y source of hire. Some sources actually y produce a negative growth in capacity. Experienced hires are more likely to stay. Majority of terminations are of entry level new hires. Sales force terminations are highest for employees working on a pure commission salary plan.
Identify and gather the data to gain visibility to the issue Analyze and correlate data to gain insights Incorporate the findings into a plan of action

Execute on the plan and monitor ongoing

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Step 3: Incorporate
Incorporate the following actions into a business plan and set measurable targets to:
Modify hiring strategies and sources to increase recruitment of experienced sales workers and p place g greater emphasis p on internal recruitment and employee referrals. Evaluate onboarding, training and initial compensation plans for new hires. Establish ongoing monitoring and reporting on sales force retention and capacity. capacity Continue investigation with next questions:
How do onboarding and training practices vary for new hires? Are there internal best practices that reduce new hire turnover in some organizations or for some managers? How does sales force compensation align with sales force productivity and retention?
Identify and gather the data to gain visibility to the issue Analyze and correlate data to gain insights Incorporate the findings into a plan of action

Execute on the plan and monitor ongoing

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Applying HR Analytics
To provide real value, identify the issues related to your human capital that impact p your y companys p y ability y to execute on its strategic g initiatives Step #1 Identify and gather the data to gain visibility to the issue Step #2 Analyze and correlate data to gain insights Step #3 Incorporate the findings into a plan of action

Execute on the plan and monitor ongoing

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Some Critical Takeaways

HR must evolve
Employee focused HR service Manage by the numbers Run HR like a business Work with the business Prove our value to the bottom line

Action A ti steps t
Ensure clean data Work with Operations p to define 3-5 key y metrics Get buy-in from senior executives Roll-out to ensure alignment Measure consistently www.hrfloridaconference.org

How Analytics Tools Can Help

Eliminates inaccurate, time-consuming consolidation processes Allows trending and comparisons on a consistent basis Drives effective decision-making Provides consistent calculations with pre-delivered pre delivered best practice measures Helps managers make informed decisions Simple to learn and use for non non-technical technical users Brings all HR and Payroll data into a secure data source

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Q&A
Email: Howard.Tarnoff@ceridian.com Howard Tarnoff@ceridian com Twitter: @htarnoff

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