Tag Archives: Data Point Tuesday

May 19, 2015 · 4:00 am

Where Do Candidates Come From?

data point tuesday_500 There is a robust conversation in the talent arena about “candidate experience” led largely by Gerry Crispin and Elaine Orler, founders of the Talent Board and the Candidate Experience Awards (#CandE). There are lots of opinions about whether ensuring that candidates for hire have a high quality experience is meaningful. Some think the juice isn’t worth the squeeze. But I think most believe treating candidates like consumers is smart business. Two new vendor publications discuss aspects of candidate experience:

  1. Creating a 21st Century Application Process from RolePoint, and
  2. Beyond Employees: Employee Referral Programs Redefined from Smashfly

Both reports were published within the last month and contain analysis of current data. The Rolepoint whitepaper was written by global recruiting legend Bill Boorman. It highlights Intuit’s approach to embracing a social approach to the apply process, with a particular focus on making the application process streamlined and device agnostic “with equal attention paid to user experience and interface on both desktop and mobile.” Bill is a legend for a reason and his approach to this topic in the whitepaper is compelling. The Smashfly presentation provides insight into the employee/candidate referral landscape with some interesting data:

  • 77% of organizations currently have a formal referral program

  • 32% of new hires come from referrals on average, and rate highest in quality among sources of hire

  • 57% of organizations limit their referral program to employees only

  • 43% extend their program beyond employees to include alumni, contractors, customers, vendors and/or partners

  • Analysis shows those that reach beyond employees get 28% more hires from referrals and 8% better quality candidates

This survey data is interesting, and I key in on the 4th bullet. Extending referrals into other stakeholder groups makes a great deal of sense – and correlates to higher quality candidates. Take a look below: Smashfly May 19 2015 If you’re in the 23% of employers without a candidate referral program, this might be a wake up and smell the coffee moment. If you’re in the 57% of organizations limiting referrals to employees only, this might be a pedal to the metal moment. Either way, whether you’re recruiting programmers, developers, customer service agents, nurses, marketers, HR professionals or executives, approaching your trusted partners – including employees – for referrals makes good, logical sense. And treating potential candidates like consumers, that is, making it as easy for them to press the “apply” button as it is to press the “buy” button seems like a tenant from Econ 101. Check out these reports from Rolepoint and Smashfly.

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May 12, 2015 · 4:00 am

HR Tech Implementations or Business Tech Implementations?

data point tuesday_500Last month I wrote about the inaugural report issued by the analysts at KeyInterval Research. (You know them as John Sumser and William Tincup.) They have an ambitious research publication agenda – one report a month. And here’s why I like what John and William are doing:

“KeyInterval is an experiment. It is our goal to stay experimental for the life of the company. With each new report, we’re experimenting with survey methodology, data sourcing, data screening, the mix of qualitative and quantitative information, and the edges of HR Technology practice. It is a search for standard practices. We are more interested in what practitioners do than what some self-appointed guru thinks they should do. Our goal is to understand the actual experience of the people who use HR Technology.”

There is little independent information about what actually works in the HR tech space outside of vendor sponsored information, that I find their approach refreshing and really useful. Their second report has just been released and it’s another really interesting look, this time at how organizations successfully implement HR technology. The report, Successful Implementations, reveals exactly how successful HR technology implementations happen. If you’ve got an implementation in your future, these findings would be a wise investment.

As with their previous report, Successful Implementations is organized in a way that makes the findings practical and easy to consume. It defines what an implementation is, gives an overview of the important insights and major findings, analyzes qualitative conversations with HR leaders, picks the right data points to share, exposes commonly held myths, identifies notable vendors and shares the study’s methodology. The piece de resistance is the quick Pocket Guide: Successful Implementation Checklist.

Here’s a quick overview of one of the data sets that might be interesting to you:

KeyInterval May 12 2015

I’m interested in all these points, but the first really speaks volumes to me. HR leaders who have sponsored successful HR technology implementations prioritize the fundamental aspects of the projects as:

  1. Quality (user satisfaction)
  2. Cost
  3. Speed

I like the order of these priorities. Putting the user (employee) experience first is just where I’d want HR to be. Putting cost second, means that fiscal responsibility is critical. Ranking time to completion third shows an operational understanding that I like. Together these show enormous business acumen. Perhaps one of the reasons their HR tech implementations have been successful is that the HR leaders on point are really business leaders first and HR leaders second. Perhaps these were more Business Tech than HR Tech. I wonder if John and William could shed light on that hypothesis…

Again, Successful Implementations contains great data, analysis and insight that would be valuable to any organization contemplating an HR technology implementation. Here’s where you can buy a copy.

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May 5, 2015 · 4:00 am

Improve Corporate Performance: Invest in Leadership/Talent Development

data point tuesday_500The relationship between talent and financial performance has been an “intuitive” given to enlightened leaders for a long time.

“Top executives intuitively understand that they cannot win without the right people and the right skills.”

Thanks to recent work by Boston Consulting Group (BCG) it’s no longer intuitive. The data are in and they are convincing. BCG fielded its Global Leadership and Talent Index survey of 1,263 CEOs and HR directors of global companies in 85 countries. The results are compelling to say the least.

The high level findings include:

  • Leadership and talent management capabilities have a surprisingly strong correlation with financial performance. “Talent Magnets” – those companies that rated themselves strongest on 20 leadership and talent management capabilities – increased their revenues 2.2 times as fast and their profits 1.5 times afast than “talent laggards,” or those companies that rated themselves the weakest.
  • The performance spread on leadership and talent management capabilities was wide. The talent magnets had an average capability score of 2.5 (on a scale of -3 to 3), while the talent laggards had an average score of -2.2.
  • Companies – even talent laggards – that move up just one level will experience a distinct, measurable, and meaningful business performance return.

With organizations spending an estimated $40 Billion (yes, Billion!) worldwide on leadership and talent development, these findings may enable leaders all over the world to re-orient their priorities, investmemts and behavior on talent/leadership development and gain the critical involvement and support with all the members of the C-suite.

Through their research BCG divided leadership/talent management capabilities into six categories:

  • Strategy
  • Leadership and talent model
  • Talent sourcing
  • People development
  • Engagement
  • Culture

And it’s interesting to note their definitions require a great deal of accountability from leaders. This is a differentiated approach and one that should spur some thoughtful analysis by HR leaders. The chart below lays out the performance differences between the lowest organization performers – Talent Laggards and the highest organization performers – Talent Magnets and the average performers in between.

BCG May 5 2015 3Interesting, yes? What’s even more interesting, then, are the data connecting these leadership/talent management performance levels with business outcomes. Take a look:

BCG May 5 2015 2In addition to proving the real correlation between leadership/talent management performance and financial performance, a valuable take away from this data is BCG’s conclusion that

“The companies that excel at leadership and talent management have figured out how to involve their leaders, not just the HR team, meaningfully and regularly in people development. “

The one-two punch of investment in leadership/talent development and significant accountability of senior leaders should help HR leaders around the world create successful business cases for moving leadership/talent development investments forward. Let’s get ready to rumble…

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April 27, 2015 · 12:41 pm

The Win-Win of Leveraging Baby Boomers

data point tuesdayI’m a Baby Boomer, born smack-dab in the middle of my generation. And I’m beginning to concretely think about the answers to questions like:

  • What is the legacy that my career will leave behind?
  • What kinds of work do I really want to do going forward?
  • What will retirement look like for me?
  • When will I want to retire (because it certainly is the last thing on my mind now…)?

Just as I wrestle with these questions, organizations are facing stiff headwinds on the talent pipeline front making workers like me critical components in workforce planning activities. We all know that workforce demographics are changing rapidly and many organizations are flummoxed when they try to get a picture of how to respond to this critical talent dynamic. Say what we will about the criticality of Millennial employees, many organizations are starting to pay equal attention to retaining the backbones of their organizations: Baby Boomers.

A terrific source of practical and actionable research based information is the SHRM Foundation’s recently published Effective Practice Guideline: The Aging Workforce: Leveraging the Talents of Mature Employees. As with all the reports in this series, it takes a rigorous approach to discovering what the research says and what organizations are actually doing in the topic area. If you haven’t discovered the SHRM Foundation’s EPGs, you’ll thank me after you download and read this free report. Not just because the data are useful and the examples practical, but because it is written for practitioners not academics and is super easy to consume.

“Mature workers will be a firm’s largest source of talent in the next two decades. There will not be enough younger workers for all the positions an organization needs to fill, particularly those requiring advanced manufacturing skills or advanced education in science, technology engineering and math.”

We all know this. The real question is what do we do about it? And this report lays out a roadmap for data gathering within your organization, a planning outline, successful examples from other organizations, and strategies for moving your plan forward.

EPG April 28 2015This chart lays out the challenge well. What follows is a trove of information about mature workers. What they want, what they can do, and the inordinate benefits of keeping them engaged in the workforce. Here are several benefits outlined in the report:

EPG 2 April 28 2015The real meat of the report are the 15 strategies for engaging and retaining mature workers that are based on both research and real organization practice. There are mini-case studies from 30 employers sprinkled throughout the strategies that share effective practices. Perhaps the most impactful sentence in the entire report is in the introduction to the 15 strategies: “The best way to engage and retain workers of any age is to provide a strong vision at the executive level, fair compensation and competent, respectful supervisors.” While the focus is clearly on the acquisition and retention of mature workers, every age demographic benefits from these strategies.

15 Strategies for engaging and retaining mature workers:

  1. Acknowledge Work Contributions
  2. Offer Flexible Work Arrangements
  3. Offer Bridge Employment
  4. Support Health and Wellness
  5. Provide Caregiver Support
  6. Offer Skills Training
  7. Provide Career and Personal Growth Opportunities
  8. Use Mixed-Age Workgroups
  9. (Re)Design Work to Match Worker Capabilities
  10. Train Managers and Supervisors
  11. Provide Support for Retirement Planning
  12. Address Age Discrimination (Real and Perceived)
  13. Foster an Age-Positive Organizational Culture
  14. Foster Job and Career Embeddedness
  15. Facilitate Critical Knowledge Transfer

It’s obvious that none of these strategies are rocket science. In fact, as you look at the list you might think, “well, these are just common sense practices that will support the engagement and retention of ALL of our workers.” And that’s the point. We can’t focus our workforce planning activities on one generation alone. And ensuring that we Baby Boomers remain engaged and valued will make the demographic transition that is looming just over the horizon more effectively managed for organizations, for workers and their families, and for society. I call that a win-win!

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April 21, 2015 · 4:00 am

Big HR Data By Any Other Name

data point tuesday_500I’m mindful of Laurie Ruettimann’s blog post from a couple of weeks ago wherein she put it straight out: HR Research Isn’t Research, It’s Marketing. She ends her post with this: Remember — today’s HR research is marketing, wrapped up in survey data, presented for consumption as sales collateral. And, of course, she’s right. Lots and lots of surveys are fielded in the HR space by consulting firms, service and products providers, professional associations, academics, writers – heck, by anyone who wants to sell something to HR professionals. And many of those surveys are biased, have no real hypotheses, and the resulting white papers are designed to create the case for you want to buy whatever the sponsor is selling.

But this isn’t news. We all know this. HR professionals all over the world know this. And probably none of these white papers with their biased surveys ever propelled a sale. I think we can agree on this.

But I still find value in these so-called research papers because they raise questions, spur investigation, create doubt and motivate thinking. Not a bad thing for HR professionals. Asking questions, investigating additional data, analysis and research, creating doubt about the effectiveness of current practice and motivating thought to consider other ways of creating value for the business – these are all very good things.

I thought about all of this as I read KPMG’s recent white paper, Evidence-based HR: The bridge between your people and delivering business strategy. And as I read it, I thought about whether or not it was useful in creating a case for HR professionals to ask more questions, get a handle on organization data – not just HR data, and think about the future effectiveness of HR in the organization to drive greater business value. And I believe it does. So I recommend that you read it with the understanding that KPMG would like to sell you some consulting services. (With a hat tip to Laurie.)

 The primary points are in no way earth shattering, but the underlying data give some new color to the discussion of HR, Big Data and creating business value:

  • Evidence-based HR is still at the embryonic, pioneering stage

  • The progress of evidence-based HR is hampered by a negative perception of the HR function

  • Evidence threatens the established order, inevitably triggering resistance as a consequence

  • Whatever the obstacles, and whatever the resistance, the growth of evidence-based HR will gain momentum; companies and HR practitioners must respond urgently to avoid losing ground

That third point was particularly interesting to me: “Evidence threatens the established order, inevitably triggering resistance as a consequence.” Evidence threatens the established order in HR for HR professionals who believe the people part of the business is more art than science. Not new. It also threatens the established order in the C-Suite and in other functions where executives have free reign to act on their own experience and perceptions of what works in leading people. And resistance to HR analytics comes from locations in the organization other than HR. New. And also interesting.

“The new era may also endanger the myth of the omnipotent executive, and the massive rewards that flow from it. Decisions based on gut instinct are now becoming exposed to immediate criticism. ‘Evidence suddenly makes people accountable, quite an uncomfortable feeling for some people…’ “

I’m interested that some of those uncomfortable people are other than HR people.

The data in the report are presented appealingly. Here’s one graph:

KPMG April 21 2015 An interesting finding is that the biggest obstacle to the use of evidence in people management is corporate culture. Not HR’s reputation, but corporate culture. Also new and maybe worth considering.

KPMG’s concludes the report with this, “…the days of basing people decisions on the whims or personal motives of one person at the helm are about to end. Organizations that acknowledge that inevitability already have a substantial head start.” That’s more a message to CEOs than it is to CHROs. More a message to the C-Suite than to HR practitioners. I just hope CHROs and HR practitioners are ready when the message is received!

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March 17, 2015 · 4:30 am

Deloitte’s HR Wake Up Call

data point tuesday_500Deloitte recently released its 2015 Global Human Capital Trends report, their annual comprehensive study of HR, leadership, and talent challenges compiled using data from surveys and interviews taken by 3,300+ HR and business leaders in 106 countries around the world. The report identifies 10 major trends that emerged from the most current research, and cites the capability gap (measuring the distance between the importance of an issue and organizations’ readiness to address it) associated with each, as well as practical ideas for how to help organizations combat theses challenges. Ranked by importance, the top ten talent challenges reported for 2015 are: culture and engagement, leadership, learning and development, reinventing HR, workforce on demand, performance management, HR and people analytics, simplification of work, machines as talent, and people data everywhere.

Deloitte’s data highlight considerable gaps in capability among all 10 trends, with the majority of capability gaps getting larger compared to last year. Global Importance vs. ReadinessLet’s take a look at the top five talent issues for 2015: Culture and Engagement ranked as the #1 issue overall for 2015 (not a surprise to us at Great Place to Work®), barely edging out leadership, which ranked as the #1 issue in 2014. This highlights organizations’ recognition that understanding their culture and focusing on building great cultures is a critical need in the face of a potential retention and engagement crisis. Building Leadership ranks as the #2 talent issue for 2015, with close to 9 out of 10 respondents citing the issue as “important” or “very important.” Despite this, Deloitte’s data show that organizations have made very little progress towards meeting this challenge since last year. Learning and Development jumped to the #3 talent challenge in 2015, up from the #8 spot last year. And while the number of companies rating learning and development as important has tripled since 2014, the readiness to address it has actually gone down (!?). Reskilling HR came in as the 4th most important talent issue for the year, with business leaders rating HR’s performance 20% lower than HR leaders’ ranking (and that is with both HR and business leaders ranking HR performance as low on average). Workforce on Demand was the #5 talent challenge for 2015, with 8 out of 10 respondents citing workforce capability as “important” or “very important” in the year ahead.

Through data analysis and extensive conversations with organizations around the world about these challenges, Deloitte arrived at six key findings that give us a bird’s eye view of how organizations are approaching talent and work:

  1. “ ‘Softer’ areas such as culture and engagement, leadership, and development have become urgent priorities.”
  1. “Leadership and learning have dramatically increased in importance, but the capability gap is widening.”
  1. “HR organizations and HR skills are not keeping up with business needs.”
  1. “HR technology systems are a growing market, but their promise may be largely unfulfilled.”
  1. “Talent and people analytics are a high priority and a tremendous opportunity, but progress is slow.”
  1. “Simplification is an emerging theme; HR is part of the problem.”

Each chapter in Deloitte’s report takes a deep dive view into the 10 talent trends they uncovered through their research with some interested findings. For example (in looking at the #4 trend, reskilling HR) Deloitte notes that nearly 40% of new CHRO’s now come from business, not from HR. Why are CEOs bringing in non-HR professionals to fill the role of CHRO? The answer may lie in their sinking belief in HR’s capabilities and abilities to provide solutions to people-related business problems.HR Performance

Deloitte puts it bluntly: right now HR is just not keeping up with the pace of business, and a reskilling of HR professionals while reinventing the role of HR is becoming critical. This need however, also creates an unprecedented opportunity for HR to play a big role at the highest levels of business strategy. But where do organizations start? Deloitte offers the following advice:

  • “Redesign HR with a focus on consulting and service delivery, not just efficiency of administration. HR business partners must become trusted business advisors with the requisite skills to analyze, consult, and resolve critical business issues.”
  • “Rather than locating HR specialists in central teams, embed them into the business—but coordinate them by building a strong network of expertise. Recruitment, development, employee relations, and coaching are all strategic programs that should be centrally coordinated but locally implemented.”
  • “Make HR a talent and leadership magnet… Create rigorous assessments for top HR staff and rotate high performers from the business into HR to create a magnet for strong leaders.”
  • “Invest in HR development and skills as if the business depended on it… Focus on capabilities such as business acumen, consulting and project management skills, organizational design and change, and HR analytical skills.”

There are very useful insights in this report – as there are every year. But this year the insights also serve as a warning to HR. A warning that it’s losing the confidence of CEOs and other C-Suite executives. That 40% of all CHROs are coming from functions other than HR should be sobering. That the top capability gaps are growing larger, not smaller, should be cause for concern. Without bringing furniture into the conversation, this report is a credible and important HR wake up call!

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March 10, 2015 · 4:30 am

Who Really Cares About Employer Branding?

Data Point TuesdayIn a recent report by Universum, a tactical view of how organizations are attracting talent and combating problems is given with some fresh insight. The report: State of Employer Branding is part one a four-part 2020 Outlook series, based on responses from 2338 interviews conducted in the winter of 2014 in 18 different countries. Respondents represented a variety of industries and job functions with more than 50% working within HR, 16% being the CEO of their respective organization, and 23% working for organizations with more than 1000 employees in the country. Universum’s report starts by posing a necessarily blunt question to its readers, “How long have executives argued over the need to make talent attraction a corporate strategy rather than an HR strategy?” Point taken, talent acquisition remains an ongoing point of struggle for organizations, but is a critical strategy for organizations to remain competitive.

March 10 2015 Talent Acquisition Concerns

As Universum makes clear, we’ve known this for a while, so what are organizations doing to step up to issues relating to talent? Let’s take a look at the meaty details of Universum’s report….

Talent acquisition and retention is a complex equation involving (among other things) talent management and development, employer branding, and analytics to measure effectiveness. Part of the problem with employer branding is where responsibility lies:

  • 60% of CEO’s feel they own employer branding.
  • 58% of HR executives, 63% of talent acquisition executives, and 57% of recruiting executives say HR owns employer branding.
  • 39% of marketing executives point to HR owning the role and 40% to the CEO owning the role.

Why all this variability? Universum underlines repeated studies that have shown CEOs don’t believe HR is up to the task, as well as studies that say HR itself is not confident in their current approach, or do not feel their approach is innovative. Greater stakeholder cooperation is another broadly identified need when it comes to employer branding efforts:

  • 70% of senior executives see a closer need for stakeholder cooperation in the next 5 years.
  • 77% of HR executives see a closer need for stakeholder cooperation.
  • 53% of CEO’s see stakeholder cooperation as a growing need.

Though this is an identified need, without changing CEOs’ confidence in HR to solve strategic talent challenges, HR will be hard pressed to effect change in this area.

Universum asked respondents about their employer branding objectives, and how these objectives will change in the next five years.March 10 2015 Employer Branding Objectives

Interestingly, of all the objectives listed, none earns much more than one third of respondents’ votes. The most critical need is “to fulfill our short-term recruitment needs” but is claimed by just 36%. This should lead us to ask why so few executives (and CEOs in even lower numbers) are prioritizing such objectives? Universum offers the following explanations

  • Organizations face a lack of clarity about which objectives matter most
  • There is a perceived lack of ownership for the discipline of employer branding
  • Employer branding is not viewed as a critical priority when organizations face many other pressing challenges

To better understand their commitment, Universum studied how organizations are currently investing in employer branding:

March 10 2015 Employer Branding Budget

Overall, we see that organizations are overwhelmingly focused on external employer branding efforts. KPIs, however, often measure almost inclusively internal factors (presenting another potential issue).

Organizations also face a perceived gap when it comes to the association between consumer and employer brands. Recently there has been a concerted effort to more closely align employer and consumer brands, yet when executives were asked how closely they feel these are aligned, the responses indicated there’s still much work to be done:

  • 19% say their employer and consumer brands are the same
  • 36% say “there is a connection today”
  • 17% say there is no connection at all

When marketers were asked this question though, the answers were remarkably different, with marketers much more likely to report a connection between the employer and consumer brand.

How do organizations more forward with an employer branding and talent strategy when there appears to be little consensus about how to do so? Universum’s report cites from PwC’s global CEO survey, which reports that while 93% of CEOs say they know they need to change their strategy to attract and retain talent, 61% say they have not taken steps to do so yet. The first step towards addressing “the talent gap” may just be to get organizations to accurately recognize areas of misalignment and differing perceptions. Employer branding, as we see from this data, is certainly one of these areas. Organizations must also commit to an investment strategy; as Universum states: “If talent is as important to competitive might as capital, it must be managed and measured with the same disciple applied to financial planning and management.”

This report makes me think we have a massive showdown coming between HR and CEOs. I don’t know about you, but I think I know who’s going to win unless something big happens. And the only thing big I see happening is Marketing swooping in to save the day. HR, if you think you’re hearing footsteps, you probably are!

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March 3, 2015 · 4:30 am

The Recognition Landscape Isn’t Changing Much

Data Point TuesdayRecognition programs are vital tools in an organization’s total rewards strategy, but beyond the knowledge that “recognizing employees is a good thing to do” we can look to data that back up recognition programs as an important part of an organization’s culture. WorldatWork and ITA Group’s Trends in Employee Recognition 2013, is a good example of a data driven look into why recognition programs are important. Their report summarizes the results of a survey sent globally to 5,520 WorldatWork members, which aimed specifically to measure specific types of recognition programs and the impact on the workforce. Respondents were randomly selected members who had designated responsibilities at the executive, top or senior level and members that specified total rewards as their specific function area.

While many functions and structures of the workplace are shifting as the world of work becomes more global, tech-enabled, and demographically diverse, recognition programs remain steady as a utilized tool among organizations.

% orgs with recognition programsWhat shifts in the landscape of recognition programs is not the use of programs themselves (as we see from the percentage of organizations using recognition programs remaining steady over a 5 year period) but the types of programs used. Of the top 5 recognition programs in 2013, the top 3 remained the same (length of service, above-and-beyond performance and peer-to-peer recognition) but programs that motivate specific behaviors moved to the 4th spot for most used programs, with a 7% increase over 2011 to 41% (a statistically notable change since 2008). Also notable is the drop in retirement recognition programs as a prevalently used program. As WorldatWork states in the report, the data seem to indicate organizations are moving away from legacy recognition programs towards programs that can drive results (how much and fast is the landscape changing, though?).

ecognition Program ChangesWhile fresh-off-the-press data is valuable, looking at data like this (with a bit of hindsight) is also valuable in that it reminds us that data and reports around organizational culture can accurately predict trends in upcoming years, and allows us fact-check theories and perspectives. WorldatWork’s data pointed to organizations moving towards recognition programs that can be leveraged to have a more direct impact on business results (like peer-to-peer recognition, programs to motivate behaviors, and above-and-beyond performance) vs. recognition programs like length-of-service and retirement recognition programs which have been in use for many years. They note that programs to motivate specific behaviors grew every year by 16 percentage points since they survey was first instituted in 2008. We’ve seen such trends hold true, with organizations in today’s increasingly fast-paced and competitive context instituting recognition programs that can more quickly impact strategic goals. Workplace wellness programs are another type of recognition program that WorldatWork’s survey points to which we’ve seen adopted at a growing pace. In 2011 and 2013, respondents noted wellness rewards programs as “other recognition programs” that their organization use.

Some other nuggets of data to consider from WorldatWork’s report included:

  • In 2013, the top 4 recognition goals remained primarily unchanged from past years and were recognizing years of service, creating a positive work environment, creating a culture of recognition, and motivating high performance.
  • The most common types of recognition awards reported in 2013 were: certificates/plaques, cash, gift certificates, company logo merchandise, and food.
  • Organizations in 2013 budgeted an average of 2% of their payroll budget to be used for recognition programs (the same as 2011).
  • Only 12% of organizations in 2013 reported training managers on recognition programs.
  • 46% of respondents in 2013 reported management perceiving recognition programs as an investment vs. an expense.
  • Only 34% of respondents in 2013 said they believed recognition programs had a positive impact on retention.

The fact that organizations have consistently utilized recognition programs over the years reminds us that this is an important part of creating a great organizational culture and a great total rewards strategy. But are organizations reworking recognition programs to be as impactful as possible, or are they just sticking with “tried and true” methods? Do plaques, gift cards and food motivate employees to stay engaged and on board? Perhaps the respondents in this survey, only 34% of whom believe recognition programs had a positive impact on retention, are on to something. Perhaps sincere appreciation from trusted leaders and peers are more meaningful than a certificate. Perhaps a hand written thank you note from the CEO for above and beyond performance creates more stickiness than a $25 gift card. Or maybe a video message from a senior leader on a milestone employment anniversary date motivates greater engagement than a plaque.

We at Great Place to Work® certainly see positive correlations between lower levels of turnover and great workplace cultures. So if leaders don’t associate recognition programs with lower levels of turnover, there’s more work to be done. Maybe ditching the plaques and adding some human touches to your recognition programs might be something to consider. One thing is certain: everyone – regardless of generation – wants to be appreciated for their contributions by leaders they trust. It’s really not that hard to understand. But how do we make it happen?

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February 24, 2015 · 4:30 am

Automated Workforce Planning: Tactical or Strategic?

Data Point Tuesday

An organization’s most critical assets are its employees. No one bothers to argue against that point any more. An organization’s workforce is also, however, its most expensive asset, and workforce management (the development of employees, retention of skilled talent, etc.) is consistently cited as one of the top issues facing organizations today. In a recent Aberdeen report, 60% of all organizations reported a need to improve workforce planning capabilities as a driver of their total workforce management efforts.

Pressures Driving TWM

Improving workforce planning capabilities took the top spot for pressures driving workforce management efforts, but better access to workforce data (in order to improve decision-making) was close behind, 60% vs. 52%. In our current “golden age of technology” there are ample workforce management technology solutions that can help organizations with workforce management, from timekeeping and leave of absence management to labor forecasting and analytics. The adoption of automated workforce management solutions though (as with other tech solutions) has been slow among organizations. Aside from the fact that the global workforce is rapidly driving towards a place where technology and automated workforce solutions will be a necessity for companies to remain innovative and successful, we have data that show – on a much simpler level – that workforce management technology is a good investment because it offers organizations multiple financial benefits.

Research shows that the use of automated time, attendance, and scheduling solutions results in 8% to 20% lower replacement costs (as a percentage of annual pay) for hourly workers, which can be attributed to the reduced cost of administration needed to manually manage such functions. Aberdeen’s research also found that average revenue per full time employee increased four times in organizations with automated absence/leave management technology and two times for organizations with automated scheduling, time, and attendance technology.

Automation Impact GraphOrganizations that automate scheduling, time/attendance and leave/absence management also saw increases in customer satisfaction levels ranging from 9.2% to 10.4% (compared to a 2.9% to 6.2% range of improvements for organizations that did not have automated solutions).

Automated workforce management solutions can also help to reduce unplanned overtime. While it’s expected of organizations to experience some overtime, having an inaccurate idea of what employees schedules will look like can quickly increase an organization’s spending. Best in class organizations experience less than 4% of unplanned overtime costs in comparison with 27% for laggard organizations. Automated solutions can help managers with critical scheduling accuracy, freeing them to give more time and attention to core business needs.

Unplanned-Overtime-Costs

Another benefit for organizations that use automated time and attendance software is greater workforce capacity utilization. These companies have employees who, on average, work at 12% more their capacity than those who rely on manual processes or spreadsheets (83% vs. 74%). Automated leave and absence management additionally helps to lower costs by accurately tracking employees’ time off, making sure PTO is recorded as it is taken (ensuring for example, that employees are not owed leave at the end of the year they’ve earned but not taken) and by providing organizations with software to properly submit and track leave and absence requests (mitigating the impact of planned/unplanned losses).

A May 2014 report by Aberdeen found that optimizing scheduling is a key attribute of leading firms. These firms experienced consecutive years of improvement in customer satisfaction by 17.8% compared to firms who did not have a focus on optimizing scheduling and actually lowered their customer satisfaction rates by an average of -3.9%. This should be the key take-away for organizations when it comes to automated workforce management solutions – we know that automated workforce management software can drastically help organizations to improve and optimize scheduling, and this is a key attribute of successful companies. And if the slow adoption of automated solutions comes from a concern that instituting such software could turn into a micro-managing nightmare, organizations should note that, as with all tools, its about how you introduce them and support their adoption. The potential benefits of automated solutions far out-way any cons, so dipping a foot in the automated solutions pool seems well worth the risk, even if it may require an investment in training and change management. We’re already witnessing the expansion of HR and administrative roles within organizations; these functions are providing organizations with instrumentally more strategic value than they have in the past. Free up these departments time and energy from consuming workforce management tasks like monitoring attendance/leave and scheduling, and see what happens when tactical, manual roles become automated and enable more strategic data analysis and insight to enter the mix!

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Filed under #HRTechTrends, Aberdeen Group, China Gorman, Data Point Tuesday, Workforce Management, Workforce Planning, Workplace Studies

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February 17, 2015 · 5:00 am

Why Diverse Organizations Perform Better: Do We Still Need Evidence?

You’ve probably heard that organizations with a focus on diversity have stronger organizational cultures – they have happier and more productive employees, and are more socially ethical than other organizations. You might have also heard that organizations with a focus on diversity perform better financially than organizations that do not invest energy in diversity programs, or in fostering a diverse workplace. Why, exactly, is this the case though? McKinsey & Company’s 2014 report, “Why Diversity Matters” answers just this, looking at the reasons why organizations with a focus on diversity simply do better, financially and otherwise, shining some data driven light on, well, why diversity matters.

McKinsey’s report examines the relationship between the level of diversity (defined as a greater share of women and a more mixed ethnic/racial composition in the leadership of large companies) and company financial performance (measured as average EBIT 2010–2013). Their research is based on leadership demographics and financial data from hundreds of organizations and thousands of executives in the United Kingdom, Canada, Latin America, and the U.S, allowing for “…results that are statistically significant and…. the first [analysis] that we are aware of that measures how much the relationship between diversity and performance is worth in terms of increased profitability.” Analysis of the data collected from 366 companies disclosed a statistically significant connection between diversity and financial performance, with organizations in the top quartile for gender diversity 15% more likely to have financial returns above their national industry median and organizations in the top quartile for racial/ethnic diversity 30% more likely to have financial returns above their national industry median. This pattern also held true in reverse, with organizations in the bottom quartile for gender or racial/ethnic diversity more likely to fall below the performance of the top-quartile companies and organizations in the bottom quartile for both gender and ethnicity underperforming (not just “not performing” but lagging) in comparison with the other three quartiles.

Feb 17 2015 Poor Diversity Poor Performance

McKinsey’s research also noted a positive relationship between financial performance and diversity in leadership, although this varied by country, industry, and type of diversity (gender or ethnicity). The U.S, for example shows no statistically significant correlation between gender diversity and performance until women make up at least 22% of a senior executive team. Even once that point is reached, the relationship observed for US companies is still of relatively low impact: for every 10% increase in gender diversity there is an increase of 0.3% in EBIT margin. The UK boasts a much more significant relationship between gender diversity and performance, experiencing ten times the impact for their focus on gender diversity than U.S organizations (even after they’ve reached the 22% tipping point). The correlated benefit is an increase of 3.5% in EBIT for every 10% increase in gender diversity in the senior executive team (and 1.4% for the board). It is also interesting to note that while U.S. companies have made efforts in recent years to up the number of women in executive positions (progress is limited but measurable), the data show that less attention has been given to the attainment of racial and ethnic diversity.

Feb 17 2015 Women in Executive Roles

Above-median financial performance was achieved by a higher percentage of companies in the top quartile than the bottom quartile for ethnic diversity in all the countries and regions McKinsey investigated. The message that diverse organizations perform better is clear, but as we asked earlier, why? McKinsey & Company offers the following supported hypotheses that diversity helps to:

  •  Win the war for talent
  • Strengthen customer orientation
  • Increase employee satisfaction
  • Improve decision making
  • Enhance an organization’s image

In the war for talent, diversity increases not only an organization’s sourcing pool but attracts talent that has shown to place significant value on diversity (such as Millenials). Additionally, because groups targeted by diversity efforts are usually underrepresented, they are often great sources of desirable talent. McKinsey & Company’s report cites a recent study that found, on average, lesbian, gay, bisexual, and transgender (LGBT) recruits tend to be more highly skilled and more likely to have advanced degrees. By focusing on diversity, organizations align themselves with an increasingly heterogeneous customer base, enabling stronger bonds with customers. Workplace diversity increases employee satisfaction and fosters positive attitudes and behaviors and creates better decision making through combining diverse groups of thinkers. These organizational aspects that diversity bolsters ultimately make up the foundation for organizations that perform better financially.

As the workforce becomes increasingly global, diversity is only going to increase in importance. Regulators in some European countries have already introduced diversity targets for boards, such as those set out in the UK Equality Act 2010. Despite the importance of diversity, many companies’ approaches are still very one-dimensional, opting for just a single diversity program to cover all aspects of diversity: racial/ethnic, gender, and sexual orientation. This may be why, on a large scale, companies often make progress in only one area of diversity.

Feb 17 2015 Gender and Ethnic Diversity Performance

McKinsey & Company’s research suggests that this one-dimensional approach to diversity results in a focus on a particular category rather than the opportunity as a whole. They advise that organizations should instead adopt tailored programs and make more targeted efforts within specific areas of diversity, believing that these will be necessary to make measurable progress and ensure relevance to business goals.

It does seem odd that we’re still making a statistical case for what everyone knows to be true:  diverse thought, experience, outlooks and cultures make for stronger solutions, more rapid innovation, more engaged employees and customers, and better all around performance. I guess more evidence doesn’t hurt.

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Filed under 100 Best Companies to Work For, Business Case, China Gorman, Company Culture, Corporate Social Responsibility, CSR, Data Point Tuesday, Diversity, EBIT, Great Place to Work Institute, McKinsey, War for Talent

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