people analytics Microsoft

Microsoft Reveals the Secret Sauce in the Digital Transformation of HR

people analytics MicrosoftWith unemployment at a historic low, companies are grappling for ways to attract and manage workers, and HR’s role has never been more important. People analytics could revolutionize the way HR thinks about talent and overcomes those people challenges. We asked someone who knows a lot about talent and technology how she’s using people analytics to drive better business outcomes. Dawn Klinghoffer is general manager of HR business insights at Microsoft, and she shared why data is so important to the HR function.

How Microsoft Uses People Data to Answer Questions

Klinghoffer has been working in people analytics at Microsoft for 15 years — she actually helped build the first people analytics function at the company — and she says using data to make decisions about employees can change the way HR works. “Making data-based decisions versus decisions based on your prior experience or your gut — that’s the secret sauce to the HR digital transformation,” she says. HR spends a lot of money on employee programs, but if it has better insights into the impact of every decision, leaders will know where to direct those funds for maximum impact.

“When I started in data analytics 15 years ago, there were very few companies collecting data about their employees, but now companies have data warehouses,” Klinghoffer says. She says Microsoft uses its people data to answer several questions:

  • What are the most engaged teams doing differently?
  • How can we create a more positive onboarding experience for new employees?
  • How is information flowing across the company?
  • How do people communicate with each other and get work done?
  • How successful are our diversity and inclusion efforts, and how does that influence our day-to-day work environment?

“Data plays a crucial role in the cultural transformation that we’ve been driving, and provides insights into different behaviors that are driving the positive outcomes that we’re looking for,” Klinghoffer says.

Rethinking Recruitment Decisions

At Microsoft, HR uses data and insights to drive recruiting decisions. “We’re screening in people, as opposed to screening out people, and that means we’re really taking a broader look at the talent that’s out there in the talent pool instead of having a preconceived notion about what we need,” Klinghoffer says.

For example, the company has a “quality of hire” definition that includes different talent pools and hiring strategies. Microsoft has been able to look at different universities to see how their graduates compare with each other. “For instance, over a two-year period, we’ll look at employees who have stayed with the company and been successful or left.”

“For example, our data has debunked the assumption that the best candidates only come from top ranked universities. In some cases, retention is even higher for employees who attended other universities. We’ve been able to use that data to drive different recruiting strategies,” Klinghoffer says.

Improving the Employee Experience

Microsoft wants its employees to feel connected and productive on day one, and this led to the creation of an onboarding survey that asks employees for their perceptions about the onboarding process during the first week, plus a follow-up that includes questions about support they’ve received from their manager during the first 90 days. “The queries revealed it is the little things that matter most – like simply having a computer on day one or having 1:1 time your manager the first week,” she says.

Microsoft also used Workplace Analytics to understand how employees connect with one another — for example, through email or calendar tools. “We were taking all of that data in the Office graph and turning it into insights by validating some of the new workers’ perceptions.”

The data was also used to show how meeting with a manager the first week produced positive results. “New employees want to feel like they’re part of the team, they belong there and can grow their network — and there’s so much goodness that comes out of having a large network at the company that you work for — but it’s the manager that facilitates the process of growing that network,” Klinghoffer says.

Customizing People Analytics for Your Organization

It’s tempting to mimic what you see successful companies doing, but Klinghoffer notes that every organization needs to find its own path. “While I can tell you what works at Microsoft, every company is unique and has a unique culture that it’s trying to drive,” Klinghoffer says. She suggests using your own data and analytics to identify what will work at your company.

For organizations that aren’t sure where to start, she recommends starting small. “You don’t have to do everything all at once. Look at your priorities, whether they’re the priorities for the HR function or business priorities,” she says. “Start with the strategy of your organization — choose one business problem that you think you have sufficient data for.”

Klinghoffer says she can offer suggestions, like perhaps starting with attrition, but that might not be what’s really important for your company. “I think now is the perfect time for people to embrace people analytics and figure out what is it and what business challenge can they solve with it,” she says.