By Dr. Gilberto Olavarrieta Treviño* and Mtro. Carlos Rodriguez Maillard**
In today’s complex and dynamic environment, one of the great challenges – and pending task – for organizations is the Talent management. Human Resources (HR) departments face the growing demand for hiring and retaining highly qualified people, with extensive experience and the right attitude to face the challenges of global markets. But the models and theories of principles of the s. XX worked in the factories of that time, in which, although the processes and machinery could be sophisticated, the tasks of the workers were simplified until they had a very short training time.
Today this type of work (repetitive and unsophisticated) continues to exist, but at the same time other positions have significantly increased their complexity to the extent that there is no clarity on the functions or the ideal profiles. For many companies, Employee knowledge can represent a true competitive advantagesince the best talent generates the best product and customer service.
Additionally, most companies seek to better measure the performance of their employees, with the additional challenge of achieving their satisfaction through initiatives that motivate them to develop their potential within the organization. This demands a multidimensional analysis in talent management.
Added to this complexity, there is a generational phenomenon: employee profiles are now very diverse, each group seeks different incentives and communicates differently. There are several dimensions to this phenomenon: one of labor competencies, another of business performance, another of generational culture, and another of employee satisfaction. To achieve a complete analysis we can apply the concept of employee journey (EJ), that is, the trajectory that a person travels from the first contact with the company until his retirement from it. But how to identify the correlations between performance, measurement of the classic HR KPIs and wellbeing of the employees? How can management help us? EJ to create business value?
Before designing and managing the EJit is important that the organization builds the foundations that will allow the collection and analysis of the necessary information. Few HR departments have a comprehensive process management strategy and methodologies and instruments that enable better decision-making. In general, the processes within HR are isolated, little digitized and focused on history and not prospecting. The recommendation is to first develop the fundamentals to later start connecting all the elements with more advanced analysis:
- Definition of positions and functions, as well as required profiles: The positions that are well defined are usually the simplest and most repetitive, probably the unionized ones and those regulated by regulations. The most complex and most responsible positions are not clearly defined.
- Design of an adequate organizational culture: All organizations have their culture, but in most cases it is not the right one for the strategy. This happens because there is no clarity on the course and how to manage and encourage change.
- Design of the organizational structure: As a result of points 1 and 2, few structures are optimal. In most cases, there is a lack of talent and there are no proper management, coordination or communication channels. There is also no clarity in the selection of leaderships.
- Selection and recruitment process: Also as a result of points 1, 2 and 3, the selection processes are not assertive, they usually opt for the “quick solution”, looking for talent outside and not within the organization. On many occasions, salaries and incentives are no longer competitive.
- Life and career plan: As a cumulative result of the previous points, there is no life and career plan within the organization. By hiring senior managers from external organizations, you send the signal that there is no career plan within the company, something that irreparably affects the culture. Because there is no clarity in leadership, there is no way to make a job growth plan explicit.
- Employee well-being management: In general, the experience of employees is very stressful: highly competitive environment, many changes, need to learn and unlearn, lack of clarity in personal development and job uncertainty. This has generated a growth of the phenomenon of “burnout” and, in response, HR departments now seek to promote the integral well-being of their collaborators.
To face all these great challenges, it arises people analytics (PA): the set of methodologies, tools and good practices focused on the collection and advanced analysis of data related to all the processes of the collaborators of an organization. PA seeks to guide the decisions of the HR areas with more information, to make better decisions and with less uncertainty. PA is extremely useful in the early detection of problems and in the design of solutions to each and every one of the aforementioned challenges.
The companies that lead the way in PA have discovered that the correct collection of data and its adequate analysis generates advantages for both the company and the collaborator. These perks can be triggered in the following ways:
- Knowledge of all employee profiles, as well as a better understanding of their strengths and weaknesses
- Optimal design of the organizational structure, based on evidence of individual and team performance
- Performance prediction to support decision making in the selection of new personnel
- Evaluation of training programs, analyzing the multidimensional impact on the organization
- Talent loss prediction (attrition) to act accordingly and make the appropriate adjustments
Additionally, PA allows you to have control panels that seek to improve the way you make decisions about HR processes. It also helps make decisions about talent and workforce processes and create strategies to optimize organizational performance.
Companies must ensure access, quality and consistency of data and improve the employee journey to drive retention and engagement for the benefit of companies and employees. In addition to supporting the HR department, the PA can be used for self-service analysis for managers and employees of companies, offering data availability at any time, on any device and in any place.
As an application of these concepts, a practical study reviewed why there was a high turnover in a business unit of a company nationwide. Instead of attacking the problem in a traditional way, a new analysis approach using PA was proposed:
- Review of historical data of the organizational climate:
A database was fed with the results of organizational climate surveys.
2. Review of Competitiveness of the area (direct and indirect industries)
External data was collected from all areas in which the business operates within Mexico.
3. Economic census data
The indicators generated by the statistical authorities of Mexico were fed.
4. Schemes of production cycles in the area.
The trends and seasonality of labor supply and demand in the various areas of Mexico were analyzed.
5. Length of stay in the company
The times spent in the companies for each type of function and job were analyzed.
Migration flows within the country and with neighboring countries were analyzed.
A data set was fed with the age ranges of the workers to carry out an age and generational analysis.
8. Population growth
The indicators generated by the statistical authorities of Mexico were fed.
9. % Graduates from local schools
The trained population with work, without work and in search of work was analyzed.
The different indicators of performance, effectiveness, productivity and assistance were analyzed.
With this, it was possible to identify that the rotation was caused by production cycles of other industries that generated constant seasonal movements of personnel that caused a shortage of collaborators in the area, which could not be covered with the natural growth of the city, coupled with migratory effects of possible candidates. With this information, it was possible to generate retention strategies, as well as capture prospects in an accelerated manner, including being able to move candidates from other nearby cities temporarily or permanently.
There is still a long way to go in the design and implementation of PA, but more and more companies are turning to data, as data-based decision-making in commercial and financial issues was standardized at the time. We are still in the descriptive phases, but with more and more access and knowledge in a few years this will be a common practice in all organizations.
*Gilberto Olavarrieta is a professor of Business Intelligence at EGADE Business School
**Carlos Rodríguez is a professor at EGADE Business School
Editor’s Note: This text belongs to our Opinion section and reflects only the author’s vision, not necessarily the High Level point of view.