If you work in human resources or have ever managed a team, then this scenario has probably happened to you. You have just received an email from one of your top-performing team members, notifying you of her resignation. The note contains no insight into why your valued employee is leaving, and it probably left you wondering: “Could I have spotted any warning signs? And could I have done anything to prevent her departure?”
You are not alone. This scene plays out daily among line of business managers and HR leaders around the world. In fact, just about every organization today struggles with the challenges of better understanding and managing their workforce to improve business performance.
The real cost of employee attritionEmployee turnover is a costly problem for all businesses. Estimates vary, but professional organizations such as the Society of Human Resource Managers estimate that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. This takes into account multiple factors, including:
The cost of hiring a new employee, including the advertising, interviewing, screening, and hiring. On-boarding a new worker, including training and management time. Lost productivity, because it may take a new employee 1-2 years to reach the productivity of an existing one. Lost engagement as other employees who see high turnover tend to disengage and lose productivity. Training costs, which can add up to as 10-20 percent of an employee's salary or more in training for the first several years. Cultural impact, as whenever someone leaves other employees will ask "Why?"
Obviously, there is a strong incentive for you to be able to retain your top talent. But if you’re like most companies, you don't have technology in place to help you do so. In fact, a
2014 IBM study of CHROs reveals that fewer than 16 percent of companies reported the ability to use data to make predictions and take action on future workforce issues.
Predict turnover before it happensThe solution to your employee retention challenges can be discovered using
predictive analytics. Advanced analytics techniques such as modeling, forecasting, classification and segmentation enable organizations to use their wealth of business data to make better decisions about their workforces and improve performance. From attracting top talent, to accurately forecasting future staffing needs or improving employee satisfaction and engagement, a powerful, scalable predictive analytics platform can empower organizations to align HR metrics with strategic business goals.
Your data can tell you a lot about your workforce. For example, at the end of the year you may see that you lost 12 employees. But what does that really mean for your company? Which 12 employees did you lose? Were they top performers? Or are you actually better off without them because they weren't the right fit? If you lose three top performers, that may be a bigger loss to your business than nine low-performing workers. If you can find out why they left, you can actually use that insight to make adjustments to your HR strategies and policies to keep your best workers longer. Once you find out who is staying longer and why, you can even look for people with similar characteristics when hiring for future positions.
With predictive analytics, you can
optimize your human capital by:
Prioritizing and targeting applicants who are most qualified for a specific position and fit your organization’s culture. Forecasting workforce requirements and determining how to best fill open positions. Identifying the factors that lead to greater employee satisfaction and productivity. Discovering the underlying reasons for employee attrition and identifying patterns that might indicate high-value employees at risk of leaving. Establishing effective training, benefits and career development initiatives.Make better HR decisions with IBM SPSS ModelerView “The right employees in the right roles: Retaining your best employees with predictive analytics.” This 30-minute on-demand webcast includes a live demo of how you can use IBM predictive analytics software to find patterns and trends in your employee data--and use that insight to predict attrition before it occurs so you can develop more effective strategies for recruiting and retaining top talent.
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