Data-Driven Harakari: Are You Making People Decisions Based On Incomplete Data?
Making decisions based on incomplete data is dangerous- more so when it’s decisions about your people because the majority of your organisation isn’t about the WHATs but the WHOs.
Are you hiring, promoting or firing the right people?Are you measuring diversity purely on headcount numbers?What is the ripple effect of an employee leaving the company?Are your employees at risk of burning out?
All the people data you store in different HR systems from recruitment to exit interviews is an interconnected web and must be analysed as such to get a true picture of your organisation, and here are a few fictional examples to show how not doing so can lead to disastrous results.
V-2 Schneider’s Recruitment Sourcing Dilemma
The average cost per new hire in 2018 was upwards of $4,000- Glassdoor
V-2 Schneider’s recruiting team had an enviable Q1 2018, hitting most of their headcount targets. They identified Agency Hires as their most successful source and hence decided to devote most of their sourcing budget to Agency Hires.
However, the celebrations didn’t last long. By Q3 2018, V-2 Schneider faced a problem that a lot of employees hired through Agency Hires were either leaving the company or found to be under-performing during performance reviews, but the recruitment team couldn’t identify this issue because the recruitment system wasn’t linked to the core HRIS, performance and engagement systems.
If V-2 Schneider had an end-to-end people analytics solution in place, they would have realised that Employee Referrals were actually a better recruitment source — though the headcount numbers were lower, employees hired through referrals constantly performed better, were a better cultural fit with the company, and less likely to leave as compared to Agency Hires.
V-2 Schneider could have directed their budget to building a solid employee referral program and saved lots of money and time spent on replacing underperforming hires and exits.
TVC 15’s Diversity Delusion
TVC 15 prided itself on its organisational diversity, making diversity a key focus of their recruitment efforts and achieving a near-perfect gender balance as a result, along with hiring employees of different nationalities, races, and sexual orientations.
However, a major problem was brewing under the surface which TVC 15 couldn’t identify because their diversity reporting was based purely on headcount numbers and not leveraging advanced analytics.
As a result, TVC 15 was unable to identify that they were promoting fewer women as a percentage of the total women in each stage compared to men and that women were spending much longer in a job grade compared to men because this was masked by the recruitment team’s focus on diversity.
What’s more troubling was that TVC 15 was unable to realise that while they had a very diverse organisation, different groups were forming cliques instead of intermingling with other groups in the organisation. This could have easily been realised had TVC 15 used Organisational Network Analysis to identify communication patterns within the organisation and identified the right people to act as diversity evangelists and bridge different groups together.
TVC 15 was unable to point the finger on why their female and minority groups frequently report lower engagement scores, and as a result, had to spend a lot of money to engage an external consulting firm to look into the same.
These companies may be fictional entities, but these are real problems being faced by organisations globally on a daily basis.
People teams should be able to leverage the same depth of analytics that an operations team has access to and be able to test and confirm their hypotheses as easily as a marketing team A/B tests an idea.
This is why we built Panalyt. Learn more at www.panalyt.com