Why 2019 is the Year to Start Using Analytics to Retain Your Best Talent
As we approach the start of a new calendar year, some of the best people in Asian companies are already preparing to embark on a new adventure with a different company.
Their current employers just don’t know it yet. The talent exodus after a large annual bonus payout, typically around the lunar new year, is a common phenomenon.
Besides the emotional toll of losing good people, there are significant financial costs. The US Department of Labour estimates for junior positions, this can be a third of annual salary. So to lose someone earning $42,000 a year, it would cost the company $14,000 in direct training expenses and lost productivity.
This figure can be up to 150-200 percent for more senior positions, according to estimates by the Society for Human Resource Management (SHRM).
People join companies but leave managers
Can your company mitigate the upcoming talent drain? Possibly. And you might have the best chance yet in 2019. Research from Gallup finds that one in two people has left their job to get away from a manager.
This suggests that to plug the leak, managers need to get better at actively engaging their teams. Company HR policy, senior leadership communication and direction all play a part, for sure, but they cannot explain the large variance in attrition rates (the rate of people quitting) across teams.
This is because all teams are equally exposed to the same senior leaders, employee benefits and HR policies. They do not, however, all have the same direct manager. But how can companies help all their managers, at all levels, get better at managing? In the past, the answer used to be the annual employee engagement survey and some mix of general leadership training.
While such efforts are far better than no effort, the software available in 2019 can help to supercharge the results. Josh Bersin writes that “people analytics (is) here with a vengeance” - the ability to use the power of data to drive decision-support at the managerial level is higher than it has ever been. In fact, Deloitte has found that People Data was the top human capital trend globally.
This unlocks two main capabilities to help managers: specificity and timeliness.
A problem with using data to support managers in the past was that there were too many of them. There were practical constraints around how detailed that data could be, and how many managers could receive personalized results.
With analytical capabilities today, managers at all levels can get detailed reports on how their team has been responding to their leadership style. In some applications, they can even get tailored suggestions on what actions they should take to reduce the risk of their people quitting.
This simple approach to using people analytics is why such surveys are still the best way of measuring and improving employee engagement, even in a cutting-edge technology company like Facebook.
The other challenge was that while we think and act in real-time, the people data that companies collected had significant time lags. Sometimes even as long as every two or three years.
The key to mitigating attrition is prevention, rather than cure. That means getting early warning signals of unhappiness, instead of trying to read patterns from exit interviews.
Automation and analytics allow for real-time sentiment monitoring of employees today. Organization network analysis draws data from employee communication: who they talk to (via email or chat), when and how long each communication happens, how many others they frequently contact and so on.
You can then observe patterns and act on them. For example, managers can learn to identify employees who are burning out and rebalance their workload.
Another means of getting timely data is through pulse surveys - short surveys sent frequently to employees on specific topics, with results and analysis delivered in real-time. Managers can then access what their people are thinking, and take immediate action on any red flags before the resignation letter appears on their desk.
Managing across the full employee experience
Talent retention is an ongoing process and needs to be applied across the six milestones of the employee experience: Onboarding, Engagement, Development, Performance, Transition, and Separation.
This also needs to be cross-referenced against the employee’s stage of life: fresh into the workforce, having young children, caring for older parents or relatives, approaching retirement and others.
In 2019, companies now have the software available to do this. Having a single source of truth for analysing the employee experience would be ideal, but with some effort bridging data across silos is possible. The average company has more than seven systems of record for people-related data after all.
So make 2019 the year that your company starts its people analytics journey, and enjoy being much less nervous about your best people leaving you this time next year.