CDI Corporation

People Analytics in the Employment World

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What if high tech companies knew why top engineers quit and how to build work environments that would get people to stay? What if product companies could analyze the demographic and experiential factors that correlate with high-performing sales people? What if employers who depend upon their contingent work force could determine how quickly candidates get up to speed? Today these outcomes are being achieved through the use of people analytics, augmenting the value that recruiters bring, by providing leaders with keen insight into employee behavior that is needed to make critical workforce decisions.

“People analytics work by gathering workforce data – experience, education, work history, etc. – and feeding this information into advanced computer models, says Bill Hyman, vice president of human resources for CDI Corporation’s Talent and Technology Solutions business. “This information can be leveraged to help gauge, predict and make decisions about everything from the retention probability of permanent staff to what will motivate long-term contract employees to stay with an organization.”

Matching data elements to human capital needs in a way that impacts decision making yields a number of key benefits:

  • Retention of high performers. Factors such as engagement, learning agility and passion for work, along with pay scale and personality type can be fed into an analytics system to pinpoint staff who are most likely to exit. From here managers can spark conversations with direct reports about how to evolve their roles, increasing the odds of preserving the best people in the company.
  • Anticipating performance. Impressive credentials cannot truly predict an applicant’s on-the-job performance. People analytics addresses this gap by helping to identify candidates who are unlikely to mesh with a company’s corporate culture. Hiring managers can then decide on additional line of questioning that will provide more insight as to whether applicants will be a good fit.
  • Enhancing employee morale. Analytics leveraged though simple employee surveys can gauge levels of satisfaction, and point to opportunities such as career-development planning and connecting high performers with training programs that will boost employee morale and willingness to stay on board. This type of data can be especially helpful in uncovering company-wide issues that employees may be reluctant to share face-to-face with leadership.

According to Deloitte’s Global Human Capital Trends 2016 report, 77 percent of all organizations believe people analytics are important; successful implementation, however, depends on getting the process right. Hyman recommends the following for applying people analytics to your company:

  • Stay focused on business priorities. Start with challenges that management cares about, such as sales productivity, ability to attract top permanent and contingent employees or customer retention. Spend time where the company makes money, and people analytics projects will pay for themselves.
  • Build a people analytics team. Building an analytics model alone will not solve business obstacles. Companies must recruit the right talent and integrate analytics efforts, involving various business partners and consultants on employee engagement, recruitment analytics, learning analytics, compensation analytics, and workforce planning. A successful analytics team will engage directly with the business and help apply the findings to real interventions or management changes.
  • Explore new technologies. Nearly every talent management provider now offers off-the-shelf analytics. Teams need to find the right mix of technologies to look at their data in an integrated way that represents the various domains of the analytics team members.
  • Invest in cleaning data. The highest value in analytics comes after the company is running a reliable database. Out-of-date employee records, for example, can provide analysts with less-than-accurate information. Only by establishing best practices for scrubbing, migrating, collecting and analyzing data can valuable business insights be extracted.
  • Focus on security, privacy, and anonymity. Leading organizations define security policies as part of their people analytics governance early in the process. They realize the importance of understanding the complex issues surrounding data security, privacy and identity protection up front.

The strategic goals of any organization are enabled by the successful performance of its blended workforce. “Rich data sources, coupled with analytics capabilities and tools, reveal how people are contributing to the desired outcomes, defining ways to maximize business performance,” adds Hyman. “Analytics are no longer an abstract concept; when you combine them with the human aspect of assessing a candidate or employee’s experience, skills, cultural fit and potential within the organization, you are left with a more well-rounded approach to building and engaging strong teams.”

Recent CDI Analysis

“People analytics work by gathering workforce data – experience, education, work history, etc. – and feeding this information into advanced computer models. This information can be leveraged to help gauge, predict and make decisions about everything from the retention probability of permanent staff to what will motivate long-term contract employees to stay with an organization.”

Bill Hyman
Vice President of Human Resources,
Talent and Technology Solutions
CDI Corporation

Employment Situation (U.S.)

Despite early predictions that the May labor market would hold steady to support the Fed’s outlook for a mid-summer interest rate hike, the employment situation report released by the U.S. Bureau of Labor Statistics reported nonfarm payroll employment changed little last month, adding just 38,000 jobs. Economists had forecast the economy to add 160,000 jobs in May, according to NPR. The actual number of 38,000 added positions was the smallest gain since 2010, considered “shockingly low,” by Marilyn Geewax, NPR business editor.

Economists surveyed by Reuters believe the impact of the Verizon strike contributed to a large dent in job growth, reported the source. Close to 36,000 employees of the national telecommunications company went on strike for six weeks. As the workers on strike did not receive salaries during the payrolls survey week, they were considered unemployed.

The unemployment rate fell to 4.7 percent, a 0.3 percent drop from the month previous, according to the report. The number of long-term unemployed – those looking for jobs for more than 27 weeks – also fell, down 178,000 people.

Numbers from the last three months bring the average monthly job growth to 116,000, which is generally seen as a very low rate by economists. Even the expected gain of 160,000 jobs would have been relatively dim. That would have kept in line with population growth and would have been adequate, reported the source.

The drop among information employment was due largely to the Verizon strike, but the mining and manufacturing sectors continued to show job losses as well. Mining employment for May dropped by 10,000, bringing the total number of jobs lost in the industry since September 2014 to 207,000. Employment in durable goods in the manufacturing sector fell by 18,000.

Following a 9-cent increase in April, average hourly earnings for all employees on private nonfarm payrolls advanced 5 cents to $25.59.

Hopes that May’s report would indicate when the Fed would raise short-term interest rates – an initiative to bring rates back to normal – have largely diminished. The low job growth means the Fed, which meets again in mid-June, will now likely wait to make a decision.

However, the Verizon workers who returned to work June 1 are expected to boost job growth for the coming month. Requesting higher wages and better working conditions, employees finally reached an agreement with the company after the U.S. Department of Labor intervened.

The full Bureau of Labor Statistics report can be downloaded by
clicking here.

Employment Situation (Canada)

Canada gained 13,800 jobs in May, far surpassing economist expectations of 3,800 jobs gained, noted Reuters Canada. Unemployment rate dropped 0.2 points, falling from 7.1 per cent in April to 6.9 per cent in May, the lowest rate since July of last year. Full-time positions grew by 61,000 during the month. Over the year, employment grew by 0.6 per cent, or 109,000 positions, while hours were also up 0.8 per cent in the 12 months to May.

Many industries posted job gains in May. The "other services" sector, which is associated with civic and professional organizations, posted the most new jobs, adding 24,000 positions during the month. Public administration employment grew by 19,000, and has seen the most over-the-year growth of any industry, adding 44,000 jobs in the 12 months to May, a 5 per cent increase. Educational services also increased by 14,000 jobs during the month.

Manufacturing and construction both added jobs in May, which industry analysts had been hoping for to counter the effects of cheaper oil prices, Reuters Canada explained. Construction added 19,000 jobs during the month, with 3.1 per cent growth over the year. Manufacturing gained 12,000 positions in May, though over-the-year employment figures were down 1.4 per cent.

Job losses were reported in wholesale and retail trade, which shed 41,000 jobs during the month, and in natural resources, which lost 16,000 jobs, continuing a slide that started in 2014.

Statistics Canada included a special note in its May labour report about the impact of the recent Fort McMurray wildfires on the jobs figures. The agency was not able to collect economic and jobs data for the area, which makes up 2 percent of the population of Alberta. The province lost 24,000 jobs in May.

"While StatsCan doesn’t explicitly chalk it up to the impact of the wildfire (they in fact claim to have substituted respondents from surrounding areas into the sample), one has to figure that it caused a significant chunk of these reported job losses in May," said BMO economist Robert Kavcic, according to CBC News.

Canadian ES Report:
Labour Force Survey, May 2016

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