Data Science and Analytics in Human Resources - Moneyball comes to HR

Copyright © 2011 Bersin & Associates. All rights reserved.
Data Science Comes to
Human Resources
Moneyball comes to HR
Josh Bersin
President and CEO, October, 2011

Copyright © 2011 Bersin & Associates. All rights reserved. Page 2
Bersin & Associates
 Who We Are
• Bersin & Associates empowers HR and learning organizations to
drive bottom line impact through world class research and
consulting
 Practices
- Human Resources
- Enterprise Learning
- Talent Management
- Talent Acquisition
- Leadership & Succession
 Offerings
• WhatWorks® Membership: Research, Tools, Education,
Consulting
• IMPACT: The industry’s premiere conference on the
Business of Talent
• BersinBasics®: Fundamentals of Talent Management for
Business Professionals at All Levels
Human
Resources
Leadership
Development
Learning &
Development
Talent
Acquisition
Talent
Management

Introduction to
Performance
Management
Understanding
Multi-Rater
Assessments
Planning for
Succession
Management
Understanding
Pay for
Performance
Understanding
Leadership
Development
How to Assess
People
Intro to
Competencies
in Talent
Management
Intro to
Competencies in
Talent
Management
Using
Competencies in
Talent
Management
Understanding
and Using Job
Profiles
Cascading &
Aligning Goals
Fundamentals of
Goal Setting
Understanding
Performance vs.
Potential
Conducting a
Performance
Appraisal
Introduction to
Learning &
Development
Strategy
Introduction to
Informal Learning
Learning
Capability
Development &
Culture
Creating
Development
Plans
Conducting a
Performance
Appraisal
Fundamentals of
Goal Setting
Fundamentals of
Coaching
How to Assess
People
Understanding
Pay for
Performance
Performance &
Succession
Management
Leadership
Development
Fundamentals
Competencies
& Job Profiles
Coaching & Goal
Development
Learning &
Development
Strategy
Fundamentals of
Performance
Appraisals
F U N D A M E N T A L S O F T A L E N T M A N A G E M E N T
F O R B U S I N E S S P R O F E S S I O N A L S

Agenda
 Today’s Business Environment
 Talent Markets: Out of Balance
 Modern High-Impact Talent Management Strategies
 Need for Assessment Science
 How Moneyball applies to HR
 Why Data Science Matters

Today’s Business
Environment

2011 Business Environment
Globalization, Innovation, Cost Containment
What Are Your Organization’s Top Business Challenges for 2011?
© Bersin & Associates, Corporate TalentWatch®
Research, Senior HR and Business Executives,
1/2010
■ June 2011 ■ June 2010
0% 10% 20% 30% 40% 50% 60% 70%
Rapid business growth
Acquisition or mergers
Global expansion
Launching new products and services
New top management team
Diminished access to capital
Declining margins
Need to Accelerate Innovation
Competitive threats
Severe business downturn
Financial pressure to cut costs
+90% Increase
+100% Increase
+400% Increase
35% of organizations see the need to
accelerate innovation and globalize –
the highest level in four years…. yet…
51% struggle to hire the right talent,
despite high unemployment…

The Global Auto Marketplace
Automobile Sales – U.S. vs. China
0
2
4
6
8
10
12
14
16
18
20
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
MillionVehiclesSold
U.S.
China
13.9 million
10.4 million

Ford Figo Story
Designed in
India for the
Indian Market
Manufactured
in Chennai by
Indian Staff
Size, Shape,
and features
designed for
lifestyle and
roads in India
Colors, face,
and styling
designed for
Indian tastes
Ford Figo – Fastest Selling Car in India

The Hyper-Connected Workforce

What would You Be Willing to Give Up for
a Week to Keep your Mobile Phone?
 Brushing teeth: 22%
 Sex: 33%
 Exercise: 54%
 Caffeine: 55%
 Gaming is now the fastest
growing application on
mobile devices

The Borderless Workplace
Employee
Mentor
Peer
Partner
Candidate
Customer
W O R K P L A C E
Transparent
Dynamic
Performance-driven
Specialized
Interconnected
New Models for HR & L&D
W O R K F O R C E
Connected
Global
Multi-Generational
Mobile
Transient
New Models for Career
Manager
L I F E S T Y L E
750 million people on Facebook
135 million people on LinkedIn
75% of workers are mobile
BigData is Everywhere

Today’s Talent Marketplace
Out of Balance
Skills and
Experience Shortage
Specialization
Free Agent
Economy
Too Many
Candidates

The Ill-Prepared US Workforce
 Only 32% of college graduates
have “excellent” skills to enter
the workforce
 Only 16% of high school
graduates have such skills.
Missing are:
• Professionalism/work ethic
• Creativity and Innovation
• Lifelong learning/self-direction
• Critical thinking/problem solving
 Only 18% of workforce training
programs raise skills from
“deficient” to “adequate”

A Free Agent Workforce
 Job tenure for under-35 year
olds is 2.5 years
 The average worker today will
have 11 jobs by the age of 45
 2/3 of all employers are
increasing their percentage of
contingent workers
 We estimate that as much as
40% of the US workforce is
currently on a contingent basis

High Performing Organizations Understand This
Increasing Specialization
 Expertise drives competitive
advantage
 Specialization improves
quality and reduces cost
 Deep skills developed
through “deliberate practice”
and reinforcement
 Deep skills come from a range
of developmental experiences
 We need career development
in all critical job roles
Back Office, Operational, Contingent Employees
Functional Specialists / Front-Line Employees
Top
Management
Senior
Management
Middle
Management
Senior Specialists
First Line
Management
The
Experts

Change in Employment Contract
 In 2011 32% of employees are “planning
on leaving” their employers, vs. 19% two
years ago
 59% of employees believe their employer
is a sound “long term” place to work vs.
65% over last three years
 Only 42% of employees believe that
promotions go to the “most qualified”
employees
Mercer Whats Working
Research, October 2011
Loyalty
Career
Equity

The Workforce Really Is Younger….
“By 2013, 47% of employees will be those born after 1977.
-- US Census Bureau
And…Younger employees are much more likely
to leave their employers.
Under 25 year olds are 10% more likely
to want to leave, and under 35 are 5% more likely.
Mercer October 2011
This generation has a very different view of work and, therefore, of loyalty.
They see work as a mutually beneficial exchange with their employer and,
when it’s no longer working for them, they plan to move on.
There is no strong sense of allegiance to the organization or expectation of
long-term employment. Their allegiance is primarily to themselves and their
careers, and that has major implications for how employers manage this
youngest segment of their workforce.”
Mercer October 2011

What Makes People Want to Stay?
3
2
1
So….hiring and promoting the “right people” and
developing the “right leaders” has a multiplying
effect on retention, engagement, and performance.

What Talent Management is
All About

Why Talent Management is Needed
Learning&Development
Sourcing&Recruiting
PerformanceManagement
LeadershipDevelopment
SuccessionPlanning
WorkforcePlanning
Compensation-Benefits
Traditional Silos of HR
 Slow Response to Changing Business Needs
• Inability to identify current and future talent gaps
• Hiring strategy and development planning not in sync
• No clear picture of future “talent profile”
• Leadership pipelines in jeopardy
 Disconnected Decision Making
• Data and processes not integrated
• Talent not shared across business units
• Learning plans not linked to assessments and skills
gaps in current talent pool
• Lack of visibility into talent gaps
 Not responsive to Employee Demands
• Employees want career development
• Defined career paths and competencies not clear and
consistent
• Talent mobility difficult during change
• Managers still the weakest link in organizational
performance
 Administratively Intensive
• Data entry is repetitive
• High volume of manual work to complete HR review
processes
• Difficult to obtain executive-level talent information
• Hard to plan for the future

Talent Strategy
& Planning
Sourcing
& Recruiting
1
2
Performance
management
Learning &
Development
4
Succession
planning
5
Leadership
Development
6
Integrated Talent Management
3
HR Systems
& Metrics
Compensation
7
Competency
Management
Global
Recruiting
Efficiency and
Effectiveness
Team alignment
Pay equity
Managerial
expertise
Deep expertise
Generational
evolution
Productivity
Career
Development
New leadership
models and
needs
Total talent
mobility
Talent pools
and segments
Effective pay
equity and
efficiency
Comparative
pay analysis
Pay for
performance
Future planning
Scenarios
Business level
talent plans
Gap and risk
analysis

Talent Management Maturity Model®
Level 1: Siloed HR Processes
Individual HR processes or silos;
may have systems in place but not connected
Level 2: Standardized Talent processes
Talent processes consistent and tailorable, some integration;
several systems connected through manual processes
Level 3: Integrated Talent Management
Heavy focus on connecting systems and processes;
single person or team responsible for talent initiatives
Level 4: Strategic Talent Management
Fully integrated processes and systems
used to make business decisions. TM is business-integrated
7%
20%
45%
28%

© Bersin & Associates
TalentWatch, Fall 2011, n=283
Today’s Talent Challenges

Top
Management
Senior Management
First Line Management
Creating Talent Mobility
SMEs
(Consultants)
Senior Specialists
Middle Management
Emerging
Leaders
Emerging
Leaders

Top
Management
Senior Management
First Line Management
Implementing Talent Mobility
SMEs
(Consultants)
Senior Specialists
Middle Management
Top
Management
Contract
Hire
Job
Intern
Developmental
Assignment
Lateral
Promotion
Stretch
Assignment
External
AssignmentUpward
Promotion
Lateral
Assignment
New
Assignment
Part Time
Loan
New
Candidate
New
Leader
Exec
Succession

Managing Talent Mobility
DESIRED
COMPETENCIES
(KNOWLEDGE,
BEHAVIOR,
SKILLS)
OPEN POSITIONS
&
OPPORTUNITIES
INDIVIDUAL
NEEDS / DESIRES
INDIVIDUAL
DEVELOPMENT
PLAN (IDP)
VISION
STRATEGIC
INITIATIVES
DESIRED
BUSINESS
OUTCOMES
VALUES
MISSION
ORGANIZATION
NEEDS
MOBILITY
STRENGTHS
DEVELOPMENT
NEEDS
CAREER
ASPIRATIONS
ANNUAL
GOALS
Succession
Management
Coaching
Assessment
Strategic
Competencies Organizational
Planning /
Restructuring
Performance
Management
Individual
Development
Plan (IDP)
Career
Management

High-Impact Talent Mobility
Facilitated Talent Mobility – New Market for Integrated Career Development
Strategic Workforce Planning
Talent Assessment
Talent Outreach & Exploration
Talent Deployment
Talent Onboarding & Development

Value of Development Planning
 Organizations with highly effective
development planning significantly
outperform those without.
With Without
Voluntary Turnover 8% 11%
Turnover among High-Performers 2% 3%
Ability to “develop great leaders” 23% 7%
Ability to “plan for future talent
needs”
22% 6%
Median Revenue per Employee $169,000 $82,800

Value of a Coaching Culture
A coaching culture is the #1 driver of employee engagement
0%
10%
20%
30%
40%
50%
60%
70%
80%
Below Average Average Above Average
Employee Results
No or Weak Cultural
Support for Coaching
Good Cultural Support
for Coaching
Excellent Cultural
Support for Coaching
Employee Engagement Index
Bersin & Associates
High-Impact Performance Management®
2011

Agile Performance Management
 Continous goal setting
“OKR – Objectives and Key Results”
not cascading goals
 Continuous feedback from all
directions including bottom up
 Daily or weekly “scrums” to review job
and team performance
 Managers continuously look for ways
to remove bottlenecks
 Delegate authority within guidelines
 Make people successful with coaching
and work simplification
 Reward people with feedback and
purpose

Open Career Development
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
Individually Manager Level Business Unit Level Enterprise Level
Business Impact (12 measures)
Engagement and retention
%Improvement
inbusinessimpact
“Manage your
Own Career”
A Career
Development
Strategy
Today people want
“open” career
opportunities

Tremendous Need for
Assessment Science

How do Companies Hire People?
2/3 of hiring done without any significant assessment
 Background checking: 79%
 Managerial interviews: 64%
 Interview training: 47%
 Behavioral assessments: 34%
 Reference calls: 32%
 Skills-based assessments: 25%
% of Organizations Which Regularly Use Following Assessment Practices
Bersin & Associates High-Impact Talent Acquisition
Study, Fall 2010, 158 organizations responded
2/3 use no real
assessment process
at all … leaving
the process to
hiring managers
or recruiters

Large Managerial Skills Gap
Managerial skills rated lower than skills of entry-level workers
24%
26%
38%
38%
42%
50%
59%
2%
5%
2%
5%
10%
7%
6%
Top Executives
Engineering-Professional
Director-Level
Customer Service
Sales representatives
Entry-Level
Line Managers
% Uneven
% Weak
Current Capabilities by Role, June 2011
Weakest
© Bersin & Associates, Corporate TalentWatch®
Research, Senior HR and Business Executives, 9/2011

Assessment Science Works
 16,500 retail employees
 Turnover rate - 72%
 Shift in business from
collectors to jewelry buyers
Clearly
Define Role
Design
High Value
Assessment
Implement
(Games and
Assessments)
Incredible
Results
Turnover reduced by ½ to 36%
Sales improvement of 26%
90% improvement in screening

But… there is a Surprise Effect
 What is the most important
baseball statistic that drives a
winning team?
• Team batting average?
• Runs batted in (RBI)?
• Pitcher’s earn run average (ERA)?
 On Base Percentage (OBP)
 Not a Characteristic of the
Player (candidate)

How do Scouts Find Top Players?
 They look for “traditional
performance characteristics”
• Speed and athleticism
• Ability to hit, home runs
• Appearance, confidence
• Just like corporate recruiters look at
grades, experience, prior roles…
 But what really matters is their
ability to get on base

Cognitive
Ability
Friendliness
and
Leadership

The War for The Best People

Attracting the right candidate in the right place
quickly, efficiently, and consistently

The Need for
Data Science in HR

BigData in US Business
6 billion photos uploaded to
Facebook every month
14 Exabytes of Data in US
Corporations (1 Exabyte is
40,000X the library of congress)
YouTube uploads more content
each day than all networks combined
1.5 million more data-savvy
managers needed to leverage
big data in the United States
US Businesses will be short
140,000-190,000 analytic positions
in the next three years
We are at an inflexion point:
Organizations
which learn to leverage big data will far
outperform those who do not.
- McKinsey

Data Analysis Skills Important to HR
Top HR Skills | Capabilities Correlation
Business Partner relationship management .52
Managing and leading people .51
Coaching and Mentoring .49
Change management and communications .48
Analyzing and interpreting data .47
Knowledge Sharing and expertise directories .47
Managing your Personal Development .45
Top Organizational | Managerial Capabilities
Developing a high performance culture .77
Developing a strong learning culture .77
Developing strong talent segmentation .74
Developing high levels of career development and mobility .73
Attracting and selecting the right talent .64
Measuring business impact of HR .64
Developing high levels of engagement .54
Giving people honest feedback .49

HR Organizations are Not Ready
What percentage of HR
organizations do you believe
feel have strong skills in data
analysis and interpretation?
6% Rate themselves “High”
56% - “Poor”
Bersin & Associates
High-Impact HR Organization® 2011
and 2010, n=741 organizations

The Lowest Rated HR Skill
17%
15%
7%
6%
4%
1%
-4%
-5%
-6%
-11%
-12%
-18%
Attracting and selecting the right talent
Promoting health and wellness
Onboarding new talent
Fairly allocating compensation
Understanding skills needed by role
Encouraging innovation and collaboration
Creating a high-performance culture
Enabling a learning organization
Identifying and developing future leaders
Driving internal mobility
Developing workforce analytics for management
Measuring HR program effectiveness
Relative Strengths of HR Skills and Capabilities
Bersin & Associates
High-Impact HR Organization® 2011
and 2010, n=741 organizations
Measurement, analytics, and
segmentation are the lowest
rated skills in HR teams
today

And this is true throughout business…

In Conclusion
 Businesses today are focused on globalization, innovation, employee
engagement, and preparing for growth
 The talent markets are out of balance, making it more important than
ever to find the “right people” for your organization
 Leadership, coaching, mobility, career development, and employment
branding are the keys to building a highly engaged workforce
 The science of assessment plays an ever-increasing critical role
 Skill, focus, and dedication to data and data science will differentiate
you in the coming years

Join Us – April 10-12, 2012

Data Science and Analytics in Human Resources - Moneyball comes to HR

Data Science and Analytics in Human Resources - Moneyball comes to HR

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