Tuesday, February 7, 2012

HR CAN Have a Crystal Ball When it Comes to Turnover

You know just when I think I have nothing to write about, I get a great comment by one of my readers that sparks my creative juices.

This week I would like to thank Micky Jay for his/her (not sure) comment on HR and Predictive Analytics a blog post of mine from last year.

He discussed the possibility of being predictive in the area of "who is at risk for leaving our organization?"

Think about this for a moment. If you, as the HR Rockstar, were able to go to your managers and say; "I have been doing some analysis and we have discovered that your top performers Jane, Joe and Tommy are at risk for leaving the organization." And then, you as the HR Rockstar were able to say to your managers, "I believe we need to do XYZ to retain these employees." WOW, how popular would you be? I am thinking that piece of office furniture that is so near and dear to HR hearts would be no longer an issue.

I know your next question...How do I do this? Well, trust me when I say it is easy. I bet you have the data just laying around in a spreadsheet somewhere.

You need to look at engagement data and performance data and determine ranges for high performance an high engagement. You then analyze employee performance scores with employee engagement scores looking at a few things:

1) Who are my highly engaged and high performing?
2) Who are my non-engaged and high performing?
3) Who are my non-engaged and non performing?
4) Who are my non-engaged and high performing?

You then put the data in a 2x2 that looks something like this:

In the last step, you overlay that data with historical turnover data create a predictive model and then BOOM, you can identify who is at risk. Yes, I have over simplified this as there are statistical tests you must perform at each step of the way, but it is nothing that can't be handled in Excel.

So when you get this data and answer the 4 questions above, you can then take the appropriate actions, which are usually something like this:

1) Who are my highly engaged and high performing? (keep these people, pay close attention to them, and make sure they are rewarded and compensated appropriately)

2) Who are my non-engaged and high performing? (most at risk for leaving, find out why they are non-engaged and do something about it)

3) Who are my non-engaged and non performing? (fire them, assuming all the correct performance management stuff has been done)

4) Who are my highly engaged and non-performing? (either coach them into performance or see above)

Come on get out your crystal balls....be a HR Rockstar!


Anonymous said...

This presumes that you have engagement data available at the individual employee level. Do most companies have this, or are engagement surveys typically anonymous with some organizational structure attached for aggregate reporting?

Unknown said...

Most survey companies can make this available and MOST engagement data is NOT anonymous but is confidential. When we use this data in analytics we are not :revealing" what a person said or their personal score to anyone, we are using it to contract a model and be predictive. We have to get over the "anonymous" issue as with technology today nothing is anonymous. We can promise confidentiality in reporting and in our analytics. The insight we gain is too valuable not to do this.

Thanks for reading and posting

Anonymous said...

Thanks, Cathy. Your blogs are insightful, compelling, and always make me think and rethink and re/adjust my perspectives on all things HR.

I'm trying to connect this to our organization currently implementing layoffs. In the process, we are losing our best people as well as losing people faster than we can mitigate the loss as work continues to pile up. Our people are finding other employments or choosing to retire earlier than originally planned.

The latest engagement survey results scream for better leadership and shows morale at an all-time low. These are low or not a priority as cost-cutting measures prevail. Our people are running out of reasons to stay. Those who choose to stay are simply buying some time.

For me, morale is a major concern and a high priority. As an HR/Organizational Development Consultant, what do I do?

Unknown said...

WOW, thanks for the kind words, I appreciate that.

If you organization is so focused on cost cutting, you may want to create a business case that shows just how much this turnover, early retirements and reduced productivity is costing them.

Maybe if they see it in black and white that will compel them to look at the organizational culture and pay attention to the engagement data.

Also, if you have some top talent that you know is at risk for leaving, wouldn't leadership want to know that. It sounds you don't need too much data to make that case. ASk them how much would it cost them if they lost the rest of their talent.

Hope this helps-

Jeny said...

Nice post.........employees performance management system