Predictive HR to Speak at HRTech Tank Boston

 

To close out the month, PredictiveHR’s VP of Business Development,

Scott Santoro, will speak at HRTech Tank, an event that brings together leaders in the Human Resource Management and Recruitment software space.

 

Being held November 30 in Boston’s Financial District, HRTech Tank is a global series of demo day events for HR executives, investors and startups. The idea is to facilitate intros between those groups where practical discussions about expectations that buyers have towards HR tech products, best sales channels and growth tactics, customer success and sales excellence are on the agenda.

 

A valuable opportunity to network and share ideas with experts in the HR industry, the top-of-mind panel sessions highlight the industry’s evolving market landscape and growing technical challenges.  Art Papas, CEO of Bullhorn will keynote the event and panel sessions include:

 

·         Home-Grown Solutions vs Market-Ready HR Tech

·         Avoiding Unconscious Bias in Developing/Implementing HR Tech

·         HR Tech Partnerships and Integrations

 

Scott will be speaking at 10:00 a.m. on the Home Grown Solutions vs Market-Ready HR Tech panel alongside executives from Wayfair and Nextwave.  Are you attending? Let us know and follow @TalentData for updates #HRTECHTANK

 

 

###

US Labor Shortages will Affect Businesses for Decades

Entire industries are in crisis mode already and it is going to get worse.

David Pollard – CEO, PredictiveHR

We tend to deal with Labor Shortages on a very tactical level.  We look at weekly unemployment applications, monthly employment rates, current job opening and workers to fill them and so on.  That view has bred a certain myopia to what will be a very long term business challenge that is only going to get more extreme and impactful.

 

Part of the reason for the short-term view is our own history.  Every time we think we are in The War for Talent, as in the late 90s, we have experienced a course correction in the form of a recession.   Recession has led to massive disruption in the workforce and relief on the labor shortage side for employers.  This cycle, it may be assumed, will happen again and again and keep us from accepting and dealing with the new reality that labor shortages have only begun to be really felt.

 

The data analysis tells me that will not happen this time.

Today we are SOLD OUT.   Let’s start there.

5-6% unemployment is considered “Full Employment”.  We are at 3.9%.

 

According to the Bureau of Labor Stats, we have nearly 7 million open jobs and a maximum total of 6 million available workers (I believe this is high).  We have more jobs than people.  By a lot and growing.

 

Some industries are already feeling the heat.  Just to name a few:

 

backlit-clouds-dawn-162568.jpg
  • Oil fields are not being fully exploited in petroleum rich sites due to a lack of workers to do the extraction.  

  • According to the National Association of Homebuilders, 82% of all construction companies are experiencing labor shortages, up from 13% in 2011.  Houses aren’t getting built.

  • Trucking Industry is already 51,000 drivers short and that will climb to 150,000 by 2026

 

And it only gets worse.

 Now, add in the unavoidable looming macro employment and population changes that are upon us.

 

  • The Manufacturing Institute reports that its sector will lose 25% of its current workforce by 2026, due to retirement.  The Baby Boomers are done and there is no workforce to replace them.

  • Worker productivity has flattened since the 1990s, when we realized a huge boost that has really not been sustained.  We are working as hard as we can and have maxed out the current technology designed to improve productivity.   We already carry our iPhone everywhere we go, 7 days a week.

  • Declining birth rates are not replacing workers fast enough.  The US peaked in 1960 with a 3.6% birth rate and we are now settling into 1.8%, a reduction of 50% since the peak.

 

We have a problem.  A business problem.  And it is going to get worse.

black-and-white-community-crowd-9816.jpg

 

Smart businesses are at least recognizing that this labor shortage may actually last a while and is so severe as to hamper the flow of goods and services to market.  The entire economy hangs in the balance.  At least the fate of the company does.

 

Progressive organizations are doing a much deeper dive into this problem, leveraging new technologies and Big Data Analytics as one part of the solution.

 

One of our smartest clients is diagnosing the causal relationship between numerous business factors and higher than acceptable employee turnover.  They have actually quantified the business impact of each % point of turnover in terms of Revenue and Earnings.  That has gotten the CEO’s attention and serious remedy actions are being taken and then measured through Predictive Analytics to gauge the result as measured by turnover.   That, in turn, is allowing for better predictive view of the overall financial health and future earnings of the company.

 

Over the next 10 years, many companies and industries will do the same.  This has gone from an HR challenge to a business problem.  It is on the CEO radar right now.

 

analyzing-brainstorming-business-1124062.jpg

There will be many approaches to handling the looming labor shortage crisis but the common thread will be Data Analysis.  We now have the historical data that can inform future remedy.  We just need to go mine it effectively and then deliver it to the CEO’s desktop so that they may take appropriate action in concert with HR.

 

It is time for HR Leadership to flex your muscles, fully leverage the data you have collected, and drive real business value that may actually be the difference between success or failure of your company.

 

What’s Time to Hire, And Why Does it Matter

It’s no longer news that today’s job market is very tight. Finding good candidates for almost every role is harder than ever. Job boards, staffing agencies, company websites, social media, and referral programs are all flooded with open positions.

bad-metrics.jpg

 

What this means is that job candidates have their choice of roles and are able to consider multiple new positions simultaneously. It’s not enough to attract candidates and get them in the door, you’ve got to make a decision and make the offer before your competitors do. The alternatives are open positions or compromising on new hires’ qualifications and experience.

To be clear, it’s not just about being the first to hire. After all, candidates will find ways to stall and pause in order to have multiple offers to weigh. However, it’s important that the hiring process not send a message to new hires that your businesses is disorganized and/or incapable of making timely decisions.

The hiring process is the first real interaction your potential hire has with your organization. You want the experience to send an accurate message about your company culture and to comfort new hires that they’ll enjoy being part of the team.

Taking a step back, “time to hire” is the time elapsed between engaging a candidate and their acceptance of an offer. There are three major factors impacting your efficiency here:

  1. How long does it take you to spot the right candidate from your pool of applicants?
  2. How fast do you get started once you find the right person?
  3. Where are there potential bottlenecks in your hiring process that make the process take longer?

Note that this is not about sourcing. What channels work for attracting candidates is important, but it’s only part of the picture. There are any number of external factors that impact your organization’s ability to attract candidates.

Likewise, there are any number of factors that might impact the time between a candidate accepts an offer and the time they actually begin working. Things like personal commitments or obligations to a current employer may lead to a delay in starting work.

But Time to Hire is all about the efficiency of your internal process, which means it impacts your ability to compete. Understanding and improving your time to hire lets you directly impact the overall performance of your business.

Of course, you’ll need internal benchmarks to begin your improvement process. You can find industry averages to get a ballpark figure on your organization is doing relative to those averages.

There are likely to be variances between your organization due to the peculiarities of your location or the types of roles you’ve been filling. However, if your performance is completely out of touch with those averages, you should quickly look at three areas of your process to get a jump start on improvement.

Break down your hiring pipeline by stage. Generate reports that tell you how long each stage takes. If candidates are being sourced well but get hung up during the screening process, you might need to consider adding resources to that stage or evaluating priorities.

Break down the time to hire by role or department. If there’s a lag for a particular function or within a specific department, have a chat with the hiring manager to find out what’s going on. Make sure they understand the importance of making quick decisions in the hiring process.

Finally, take a look at the length of your interview process. How long does the process take? How many people are involved? What challenges exist around scheduling interviews?

Once you know your time to hire metrics, you can quickly take action to make rapid changes and then focus on continuous improvements to your process. Injecting efficiencies into your hiring process will send the right message to job candidates, and to your peers on the management team.

Don’t Let Sloppy HR Budgeting Kill Business Growth

For most businesses budgets aren’t suggestions or wish lists, they are real guidelines with an absolute upper limit on how much can be spent. On the other hand, even though nobody wants to go over budget, they also don’t want to be too far under budget. Being under budget by too much usually means that opportunities for growth or improvement have been missed. Missing such opportunities can make CEOs and lines of business execs crazy.

growthmsn.jpg

 

Human resources budgets are notoriously inaccurate, through no fault of the HR team. HR budgets typically include annual headcount, however companies don’t accurately predict exactly when hiring will take place. Too many factors inside and outside of the organization impact hiring timing. Things take longer than planned, and in today’s tight labor market, the problem of underdelivering on hiring is only likely to get worse.

This is often exacerbated when companies underestimate the amount of employee attrition that will take place over the course of a year. Often, budgets are assigned to staff who don’t remain with the organization for the entire year.

Another issue injecting uncertainty into HR budgeting occurs when companies lose track of employees that are transferred from one business unit to another. When these different BU’s have different accounting systems, it takes way too long for budgets to keep up and resolve on the organizational level.

For these reasons, it’s common to pad HR budgets to ensure that workforce needs aren’t in jeopardy of being underfunded. Between the padding and poor timing, the likelihood of being close to reality diminishes.

All of this is made even worse by the fact that companies don’t have an accurate way to understand exactly what impact headcount has on cash and profits. Companies typically use averages based on backward-looking data (lagging indicators) to determine average commissions, average bonuses, average pay increases, average costs of benefits, etc. But since we do know that the past doesn’t necessarily match the future, HR managers add budget variances based on even less precise criteria.

Of course, healthy and conservative budgeting is not a bad thing. Every dollar saved does go straight to the bottom line. But companies don’t save their way to growth. For companies with a top line growth goal, knowing funds were available for new initiatives or accelerated marketing but were tied up as padding in the HR budget can make executives question the business savvy of their HR peers.

So what can HR executives do to gain credibility and trust with their peers, particularly those in the finance department who typically look after budgeting? Using advanced workforce planning tools, such as the PredictiveHR platform, will enable HR to gather critical HR data from across business units and use that data to develop predictive models. These models can be tested against past actual data, which will prove its accuracy to executives in finance, operations, and sales - increasing those executives’ trust in their HR colleagues.

With better numbers and more accurate timing, HR can fine tune their budgets – budgets that often represent the largest share of expenses for most organizations – freeing up capital for other mission critical initiatives inside the organization.

What is People Analytics?

For hundreds of years – possibly longer – organizations have made critical HR decisions based largely on instinct and intuition. Where should we find talent for our business? What’s the best way to attract those people? What kinds of benefits and perks should we offer to keep them? What kind of training and develop should we use, who should we offer it to, and what are the results? All of these critical questions, and many more, were often answered based on gut feelings and anecdotal experience.

Over the last couple of decades, human resources departments have increasingly accessed internal data and analyzed HR performance. It’s true that businesses should know how much they are spending on human resources and learning and development programs. We should also know what kind of value we’re delivering from that spend. This information is useful to gauge the performance of HR departments, and is interesting to senior HR managers and their managers. However, it doesn’t provide much value to sales, marketing, and operations managers.

people-analytics2.jpg

By definition, this information is comprised solely of lagging indicators. It tells us about the past – it offers no information for the future. The executive suite is highly interested in leading indicators – information that can help predict the future and help shape strategy.

Nowadays, organizations have access to troves of data surrounding the people they’ve hired and the performance they’ve delivered. We know where people are from, where they went to school, where they’ve worked in the past, and for how long. We know details about people’s work environments – what office they sit in and who manages them. We have information from exit interviews on why people have quit.

We also have tons of data on the performance of individuals and teams. Who are the organization’s top sales people? Where have there been the most operational failures? How does the performance of employees who have been trained differ from their colleagues who haven’t?

By accessing and analyzing all of this data, HR departments can both report on results, and help predict what should be done to improve performance – increase revenues, decrease costs, reduce the time to market, etc. People analytics enable HR departments to provide this critical information, thereby elevating the value of the entire HR function in the organization.

People analytics tools are increasingly being adopted to help human resources access and analyze both internal and external data and provide strategic insights to the executive suite. These tools combine multiple technologies like Big Data analytics and Artificial Intelligence to slice and dice data, and present real-time representations of the information that is most interesting to the organization.

For example, you can set up dashboards to better understand attrition, employee cost, and employee engagement by business unit or geography. You can generate up-to-the-minute reports to see patterns around operational outcomes (time to market, patient outcomes, etc.) and how management issues influenced results. Or you might better pinpoint sales training solutions and improve sales hiring quality based on analysis of sales performance by demographics, territory, and education.

You can also use People Analytics tools to protect your business from fraud or ensure regulatory compliance. By analyzing internal data, HR can find patterns of fraud, and ensure that hiring, training, and management practices can significantly reduce the initiation and impact of fraudulent activity. You can also analyze employee demographic and salary information to ensure that you comply with equal pay regulations.

Like contemporary CRM and Business Intelligence tools, many People Analytics tools have become simple to learn and use. Deploying such a tool enables HR departments to immediately provide strategically valuable information to the executive suite, and consistently roll-out additional value to the organization as executives come to rely on the HR function.