What a CLO must know about Learning Analytics

What a CLO must know about
Learning (Talent) Analytics
Peter Howes
Vice President, Workforce Planning and Analytics

Truth or Myth?
Human Capital Analytics A Powerful Discovery Tool
1. The best source of new hires is
your current employees employee referrals?
2. High GPA Scores are a good predictor of
successful graduate recruitment?
3. Employee equity awards of ANY size
increase retention?
4. Industry experience is a KEY factor in
successful salespeople?
Myth: Employees hired from referrals,
turnover at twice the rate of the best new
hire source
Myth: High GPA graduates had highest
turnover between 2-4 years tenure.
Truth: Highly correlated at the company
Myth: In some positions studied,
salespeople with little or no industry sales
experience outperform seasoned people
2 SuccessFactors Proprietary and Confidential © 2013 SuccessFactors, An SAP Company. All rights reserved.

Global Macro Trends Are Impacting the Workforce
and Learning…
59% of all 2013
master’s degrees will be
earned by women3
Growth through
Talent Intelligence
Consumerization
of Technology
Changing
Workforce
Demographics
48% of baby boomers
expect to work past age
of 651
80% of company
valuations are intangibles
related to talent such as
IP, know-how, expertise,
etc.7
90% of executives
whose companies use
social media technologies
report measureable
60% share of India, business benefits4
other South Asian
Nations and Africa in
global labor force growth2
+1.3B workers will use
mobile technologies in
20155
70% of US economic
growth has been driven
by knowledge workers
over the past three
decades6
1) Deloitte 2011, 2) McKinsey Global Institute 2012 3) US Department of Education 2013, 4) McKinsey Quarterly March 2013, 5) IDC’s Digital Universe Study, Sponsored by
EMC December 2012, 6) McKinsey “Economic conditions Snapshot” 2010, 7) Deloitte “Extracting Maximum value from intangible assets”, 2010

…And Compliance and Cost Are Continuous Issues
Compliance Risk
• Risk: In 2011, there were more than
1,000 regulatory changes affecting
employee data worldwide– not
counting industry regulations and
legal updates.
• Risk: Do workers have the right
certifications to do a job? And are they
up to date with your industry, and
company compliance standards?
Cost
• Multiple Learning systems
• Move from on-premise
• Path to unified talent solution

Need to Overhaul the Economics of Learning
Learning spend per employee
Learning budget as a % of Payroll
Average cost per learning hour created
Learning delivery via ILT (live and online)
Source: ASTD, 2011 Study

Are Investments in Learning Paying Off?
“The relationship between learning and analytics is often misunderstood
and under-utilized.
Typically, when people discuss analytics they are talking about reporting
within a specific learning management system. They are talking about
course completions, scores, pass rates and usage data.
Whilst useful, this information doesn’t really help you to make the
connection with what is happening in your organization, or
whether the training is having the desired effect of boosting
productivity, improving service and raising levels of efficiency.”
Ed Cohen and Peter Howes, “Learning and Analytics”, SuccessFactors White Paper, 2012.

The Opportunity Ahead
8
2
%
8
3
%
8
5
%
8
0
%
9
5
%
of business
leaders
don’t trust
talent data
of business
leaders
don’t
believe
talent
analytics
are focused
on the right
issues
of HR
leaders
have not
used
information
gleaned
from data
analytics to
change a
business
decision
of senior
HR leaders
believe
staff
capabilities
are a
barrier to
improving
HR
analytics
of senior HR
leaders plan
to increase
investments
in HR data
and
analytics in
the next two
years
Source: CEB | Talent Management Report in The Times, October 2013

Business Results of a
Strong Learning Culture
Organizations with a Strong Learning Culture Significantly
Outperform Peers…
Innovation
46%
more likely to
be first to
market
Productivity
37%
greater
employee
productivity
Time to
Market
34%
better
response to
customer
needs
Quality
26%
greater ability
to deliver
“quality
products”
Skills for the
Future
58%
more prepared
to meet future
demand
Profitability
17%
more likely to
be market
share leader
SOURCE: Bersin & Associates

Yet…Many Organizations Are Flying Blind
Missing an Opportunity to Drive Business Results?
IBM Survey of 700 Chief Human Resource Officers
“Only seven percent of respondents say they are very effective at
using analytics to make workforce decisions.”
Without workforce insight, companies place their ability to grow effectively at
risk.
They will have difficulty putting the right skills in the right places and will have
trouble making intelligent decisions about locations suitable for expansion.
They will be challenged in knowing where their top performers are located and
will struggle to justify the need for future workforce investments.”
Source: IBM, “Working Beyond Borders: Insights From the Global Chief Human Resource Officer Study,”
2010.

Learning World According to Bersin
World-Class
Chief
Learning
Officer
Source: Josh Bersin, Bersin by Deloitte blog, “Today’s World-Class Chief Learning Officer,” May 2012

We’re not always strategic…
More than 65% of respondents view their HR function as a
strategic partner to the organization while only 15% of its
time is spent on strategic partnering activities.
27%
18%
12%
15%
14%
14%
Delivering HR Services
Transacting/Recordkeeping
Strategic Partnering
Designing HR Programs or Systems
Internal Management
Compliance/Auditing
Mercer Consulting, 2010 HR Transformation Study

Your workforce makes up 40-60% of your
operating expenses.
Are you making decisions about your people with the same intellectual
rigor as your decisions about other business factors: Finance, Sales,
Production, Supply Chain?

The Opportunity for Learning Analytics

A Measurement Maturity Model – From Learning
Metrics and Analytics to Business Outcomes
Value /Impact
Measurement Maturity Model
Learning Metrics &
Scorecards
Information –
What is happening?
Learning Analytics
Insight –
Why is it
happening?
Learning Outcomes
Impact –
How does it affect
the business?
Time/Expertise Required
Current practices in LMS

The Talent Analytics Journey…in more detail
Data Reporting Metrics
Advanced
Metrics
Bench-marking
Analytics
Predictive
Analytics
Stages
Foundations
Definitions:
inclusions
exclusions
Analysis
Dimensions:
segmentation
trends
Aggregation
as ratios &
percentages
Aggregation &
weighting to
generate index
measures
External &
internal
comparisons
Statistical
analysis:
correlations
test of significance
analysis of
variance
factor analysis
Hypothesis
Testing:
structural
equation
modelling

What Questions Are We Looking to Answer?
Stage of Measurement
Maturity
Common Learning Questions That Organizations Seek to Answer
Learning Metrics
 What percentage of employees have an IDP assigned to them and what
percentage of them complete the recommended steps on their IDP within
each time period?
 How many dollars are spent annually per FTE on learning & development?
 Do longer tenured employees continue to grow via training, or is training
disproportionately offered to, or attended by, newer employees?
 What percent of learning dollars are assigned to closing the gap between
needed and actual capabilities?
Learning Analytics
 What is the percent increase in performance as a result of every $1,000
spent on training?
 How does the performance of employees participating in optional training
programs compare to those not participating?
 What percentage of poor performers become good or better performers
within a year as a result of specific learning programs?
Learning Outcomes
 Is there a correlation between the percentage of all people costs spent on
learning and firm profitability?
 How have leadership development programs impacted productivity or
employee satisfaction?
Source: Adapted from the SuccessFactors “100 Critical Human Capital Questions”.

More Questions…To How Many Questions Can Your
CHRO or CLO Answer “Yes”?
1. Do you know the retention rate of your high performers & whether it is good or poor relative to
industry benchmarks?
2. Can you run a headcount report now and segment the results by your primary organizational
structure, workforce tenure, and gender?
3. Can you identify your best and worst performing managers, as measured by the performance
and engagement of their teams?
4. Do you know the average performance score and the time to full productivity, for new hires?
5. How many people do you have in critical roles? What percentage are at risk and do you have
good succession coverage?
6. Which hiring sources provide the most successful employees?
7. What is your average span of control and how does this vary across your company?
8. Do you know whether investment in Learning and Development in your organization
correlates, positively or negatively, to increased performance and business results?
9. What is the average promotion speed for high and low performers?
10. What is the ratio of revenue generating to non-revenue generating employees?

Learning Analytic Overview…our view
of the world

What you get with SuccessFactors…
Workforce Analytics
Learning Analytics
Library of
LMS
Metrics,
Definitions
and
Formulas
Learning
Benchmarks
Platform
Online
Report
Designer
for ad hoc
and
formatted
reporting
LMS
Reports Dashboards
Library of
Metrics and
Data Feeds
for Core HR,
Talent Mgmt.,
Finance,
Surveys, etc.,
Benchmarks
Headlines,
Question-
Driven
Analysis,
Talent Flow,
Analytics
Workspace,
and More

Data Source
Workforce Analytics Learning Analytics

Examples of Foundational Learning Metrics
Personal,
Employment
and Job Data
Dimensions
and
Hierarchies
Training
Data
Volume
• Learning Hours/Classes per FTE &
Event
• Percentage Filled
• Learning Penetration Rate
• Total Training Classes Offered
Quality
• Cancellation, Abandonment, Completion
• Course Participation & Pass Rate
• Number of Employees Successfully
Trained
• Satisfaction with Learning
Process
• Learning Channel Delivery Mix
• Learning Program Content Breakdown
• Learning Staff Ratio
• Trainer Productivity

SuccessFactors Workforce Analytics
Leverage best practices to drive insight
Metric Packs
Absence Management
Career & Development Planning
Compensation Planning
Employee Relations
Financial Management
Goals Management
HR Service Delivery
Learning Management
Leave Accrual
Health and Safety (OH&S)
Performance Management
Recruitment / Staffing
Payroll and Benefits
Succession Management
Survey

Barriers to Business Impact
Keeping you from making optimal impact

We’re not always aligned
34% 37%
We identify key
performance metrics
to improve with
management
Learning
initiatives support
skills the
business needs
There’s board-level
accountability for
learning
2012-13 Towards Maturity Benchmark
63%

Form Follows Function
What are you here to achieve? Why does your department exist?
Business
Goals
Learning
Strategy
Learning Org
Structure
• KPIs, metrics,
dashboard?
• Strategic
Workforce Plan?
• People Strategy?
Funding
Model
• 39% Employee
Engagement
• 61% Business
Impact
• 44% Centralized
• 30% Federated
• 22% Segmented
• 4% Decentralized
• 62% Centralized
L&D Team
• 30% Business Unit
L&D Team
• 8% Local Manager
Spend
Source: Institute of Corporate Productivity

Better-aligned learning makes greater business
impact
7
6
5
4
3
2
1
0
Alignment and Business Results
Bottom Q 3rd Q 2nd Q Top Q
Number of
Benefits
Reported
Source: Towards Maturity – Alignment Index 2012-2013
Alignment Index

Case Studies and
Learning/Talent Analytics

Customer Example: The Opportunity Cost of
Investing in Poor Performers
60
50
40
30
20
10
0
2008 2009 2010
Exceptional Highly Effective
Achieves Expectations Needs Improvement
Unacceptable
Training Hours per FTE
From 2009 to 2010, training
hours delivered decreased for
all levels of performance
EXCEPT for employees rated as
“Unacceptable”.
• Is this outcome consistent
with company strategy?
• What is the opportunity cost
of failing to invest in training for
high performers (those rated
“Highly Effective” and
“Exceptional”)?
Training Hours vs. Performance

Customer Example: Quantifying the Impact of
Training on Salesforce Revenue

Do we reward managers who are net exporters of
talent?
Top 10% of Managers who:
…transferred or promoted most individuals
OUT, by Performance Rating
…transferred or promoted most individuals
IN, by Performance Rating
Performance
Rating
Number of
People
1-3 25
4 116
5 36
Performance
Rating
Number of
People
1-3 16
4 64
5 21
Average salary
increase of top
importers of talent (9%)
Average salary
increase of top
exporters of talent
(6%)

How does labor turnover vary by performance rating & position
tenure?
Case study for Sales Reps
Total voluntary labor turnover, Total Organisation (8%)
For our turnover vary by performance rating and position
tenure?
Total voluntary labor turnover, Sales Reps (16%)
Total Turnover by
Performance Rating
Performance
Rating
Turnover
Not Rated 16%
1 38%
2 19%
3 12%
4 18%
5 22%
Average 16%

Case Study: Sales Reps (continued)
How does labor turnover vary by performance?
Rating and Position Tenure?
Total Turnover of Sales Reps:
by Performance Rating, by Position Tenure
Position Tenure
Performan
ce Rating
< 1 Yr 1-2 Yrs 3-5 Yrs 5+ Yrs Average
Not Rated 16% - - - 16%
1 - 32% 55% 17% 38%
2 - 26% 24% 16% 19%
3 - 17% 11% 18% 12%
4 - 8% 36% 20% 18%
5 - 10% 27% - 22%
Average 16% 14% 18% 9% 16%

Case Study 3:
Sales Rep Revenue, by Tenure and Performance Rating
Tenure
Sales
Rating 4-5 Rating 2-3
Average
< 1 year $310,000
1 - < 2 yrs $520,000 $390,000 $455,000
2 - < 3 yrs $680,000 $410,000 $545,000
3 - < 5 yrs $685,000 $385,000 $535,000
5 + yrs $665,000 $340,000 $502,500
Average $637,500 $381,250 $469,500

Conclusions
• Do we address poor performers in their second year of
employment inconclusive from information available?
• We are losing too many high performers who have been in
their current position for more than three years. Why?
o Lack of promotion options
o Lack of career options
o Poorly defined employment value proposition
• How do we get Average Revenue per Sales Rep to $600,000 per year?
o Reduce recruitment of poor performers
o Address poor performance quicker
o Retain more high performance Sales Reps (4 and 5) in the 3-5 years
of position tenure
o 500 sales reps X $100,000 = $50,000,000 increased sales.

Yet we don’t yet have the data analysis skills…
US shortage
200,000 workers with
deep analytical skills
4 McKinsey Global Institute. Big Data: The Next Frontier for Innovation, Competition, and Productivity. May 2011.
• 1.5 million
managers able to
analyze data and
make decisions
based on findings

Summary….Six Steps to Success
1) Deliver fact/data based business cases for what training you are doing and why.
2) Demonstrate why investing in training program X, will help the company execute on its strategy
and deliver ROI through authoritative insight.
3) Engage the business leaders, HR, finance, sales and operations with business metrics to really
show what impact training is having and what needs to be measured.
4) Embrace workforce analytics as an integrated part of decision making and combine multiple data
sources from finance, sales, HR and training, to allow you to measure the relationship and impact
training has on the strategy, alignment, people performance and productivity of your organization,
thereby linking your training strategy to the business.
5) Embark on a “transformation journey” - a phased development with each phase representing a
more mature use of workforce analytics and a more specific strategic business impact. Move from
reporting (understanding what’s happening today) to analytics (why it’s happening), to planning
(how do we take action today to ensure we have the right workforce trained for tomorrow).
6) Engage with HR and the business to uncover potential problem areas and ensure that they can
quantify the impact of interventions.
Source: Ed Cohen and Peter Howes, “Learning and Analytics”, SuccessFactors White Paper, 2012.

Questions,
Comments,
Feedback?
PeterHowes
Vice President, Workforce Planning and Analytics
SuccessFactors, an SAP company.
Peter.howes@sap.com
+44(0)79 7469 6218
© 2014 SAP AG or an SAP affiliate company. All rights reserved.

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