How would you like to improve your company performance by 26%? Well if you put in place the right strategies to employ and manage the workforce then recent research has shown that this is likely. The success of an organisation’s workforce on company value starts right at the top with the CEO. According to Forbes, 60% of a company’s market valuation is based on its reputation and that nearly half (49%) of a company’s reputation is attributable to the reputation of the CEO.
If you don’t believe us, ask the shareholders of Microsoft. When Steve Ballmer announced at the end of August that he will be stepping down as CEO, the Microsoft share price rose by 6 – 7%, adding approximately $18 billion in value for Microsoft shareholders.
So, with having the right workforce so influential on a company valuation, the recruiting, developing and retaining of talent should be a critical activity for organisations. We in Figure it Out believe that utilising analytics can improve these activities and give companies the boost that they need.
Using analytics to help with recruiting the right talent
So, how do you recruit someone who will be successful in your organisation? Assessing the success of new hires is in itself a difficult question, and therefore recruitment tends to ultimately be done on gut feel, personal experience and corporate beliefs (for example, that candidates with good grades from reputable education establishments are likely to stand the best chance of succeeding). A more successful and auditable approach involves including analytics of the data that an organisation intrinsically collects as part of the application process and combining it with key factors of success of the workforce in that organisation, i.e. looking at recent new hires, defining measures of success for those new hires and analysing the traits in their application.
One such study that has used this approach (in a sales environment) found some surprising results. What might otherwise be considered important in the recruitment process such as where an applicant was educated, what grades they got and the strength of their references were not important indicators of success within the organisation. However what was important was a fully comprehensive and grammatically correct application / CV, the type of previous employment and if education was completed from beginning to end of the system. Would these be the first things that you look for when recruiting?
Using analytics to develop talent
There may be many questions and objectives that an organisation is trying to address through talent development and analytics can help with a number of these, for example:
- What promotion criteria do I need to put in place to ensure that we have the right talent in managerial roles? Analytics can help by comparing the qualities of high potential individuals with those actually getting promoted, to drive new promotion criteria and ensure that talent is being progressed through the organisation.
- What competencies do I need at different levels of the organisation? Analytics can be utilised to compare the competency needs and current level of competency at different organisation levels. This will allow talent development processes and initiatives to be more targeted and by using a more analytical approach, the success and outcome of employee development initiatives tracked.
- What makes a successful manager? Analysing the performance of the most successful leaders in your organisation and what factors makes them good leaders to drive more successful managerial development programmes.
Using analytics to retain talent
To improve talent and employee retention levels, organisations need to understand what are the drivers that create high levels of engagement, motivation and retention in their organisation? Unfortunately organisations collect little data on underlying factors, and mostly in the form of survey or exit interview. These approaches can often produce biased or misleading results, as they tend to be highly dependent on the working environment and how the survey / interview is conducted. They may also be intimidating to interviewees / respondents and quality of data collected tends to be qualitative and based on an interpretation of a response, thus making them difficult for meaningful analytics.
More powerful analytics on employee retention can help to identify trends within engagement, motivation and retention by consolidating data from corporate surveys, and combining it with data from performance reviews, social-media, and other internal sources such as job history, length of time in position and salary history etc. Such analytics can provide organisations with a more comprehensive picture of the ‘health’ of their workforce and by giving individuals a probability of leaving, the likelihood of individuals to resign over given time periods. The output of this analytics can be used by organisations to target retention activities at more specific groups, model the impact of the loss of critical individuals and skills and understand which actions are most effective for retaining talent.
So, returning to Microsoft, if they want to maintain their higher share price, we hope that they are adopting an analytical approach when appointing a new CEO, by understanding how individuals drive value in their organisation to inform their recruitment, talent development and employee retention strategies!