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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.

#WorkTrends: The Power of People Data

“People analytics” is a term that gets a lot of people (myself included!) very excited. But the idea of people analytics isn’t exactly new anymore. So the question now is, how are we using people data to uncover important insights and then actually act on them?

This week on #WorkTrends, we’re talking to a people-analytics pro, Kate Hastings, senior director of insights at LinkedIn, about how HR is using people data to eliminate bias, close the gender gap and drive better outcomes.

You can listen to the full episode below, or keep reading for this week’s topic. Share your thoughts with us using the hashtag #WorkTrends.

 

Welcoming the Age of People Analytics

Hastings says that just seeing job descriptions about people analytics is exciting. Her background is in management consulting, and she remembers the first time she saw the term, in a job description at Gartner. “Not many people get inspired by job descriptions, but it talked about using an organization’s data to make better people decisions and how important that was to the overall corporate strategy and bottom line,” she says.

“I was so inspired, because I felt like this was an underused opportunity for analytics.” She knew she could bring her analytical mindset to make an impact on issues she cared about — making work a great experience, helping people be more productive and making organizations more successful through people.

But she admits that she hadn’t often thought about “data” and “HR” in the same sentence: “When I had worked with HR in the past, that hadn’t been the most data-driven part of the organization, and I felt like there was really an opportunity to bring that data mindset and make better decisions for everyone.”

The real draw of people analytics is making more fair, consistent decisions about people at work, she says: “It feels like we’re all on the same page.” In other words, math evens the playing field.

Using Data to Address Big Challenges

Big challenges like diversity, the gender gap and bias in hiring are on leaders’ minds, and Hastings says people analytics can help. “In a recent LinkedIn survey, we asked recruiting leaders about the trends they’re most interested in, and diversity was number one. People are really thinking about how we can make our organizations stronger.”

She says the first step is quantifying the problem. For example, she says, “we’ve always known there was an issue in terms of the gender gap in leadership, and the big step forward is that we’re able to quantify it. That’s allowing us to do all kinds of things toward solving it. We’re nowhere near solving it yet, but we have a sense of how large the problem is and we understand some of the opportunities.” She points to metrics about what happens when an organization has more gender balance and diversity: There’s a positive correlation to better performance. Once we can quantify both the problem and the potential outcome of making major change, we can start to build programs to get us there.

The Next Phase: Breaking Down Silos

Hastings has seen a change happening in HR over the past 15 years. HR has followed the lead of other functions, like marketing, to pay closer attention to collecting and studying data and making more informed decisions.

But we still have a long way to go. She points to a recent Deloitte study that shows only 8 percent of companies feel like they have usable data about talent.

“I think the next frontier is breaking down silos,” she says. Instead of thinking about a very compartmentalized set of activities (“First we recruit you, then we onboard you, then we make sure your rewards are what they should be and then we train you”), she hopes HR can think about the entire end-to-end journey.

Part of breaking down those silos is working across functions. “McKinsey has been talking about how the CHRO and the CFO and the CEO need to work together as a group of three to really think about how to implement change in their organizations, and I love the idea of people-first organizations working in that way,” she says.

Continue the conversation. Join us on Twitter (#WorkTrends) for our weekly chat on Wednesdays at 1:30 p.m. Eastern, 10:30 a.m. Pacific or anywhere in the world you are joining from to discuss this topic and more.

3 HR Tech Trends to Watch

If you work in HR, you know that the HR tech marketplace is absolutely exploding. Your inbox is probably overflowing with marketing emails from vendors that want to help you improve every part of the talent lifecycle, from sourcing to hiring to onboarding to engagement. With all of the (very exciting!) noise and activity in HR tech, which trends are worth watching? We flagged three HR tech developments we’re keeping an eye on.

Better People Analytics

“The continued evolution of HR technology is introducing more granular access to data that shapes decision-making in real time,” says Tom Hammond, vice president of corporate strategy and product management for Paychex. He cites a recent Paychex Pulse of HR Survey that found 86 percent of HR leaders said analytics allow them to be more informed and objective.

“Those who are using analytics are doing so to target HR communications more effectively (64 percent), but analytics are also often used to identify high-potential employees (61 percent) and what they’d like more of from their employer.”

When HR is integrated with technology and analytics, Hammond says, there’s also less room for manual errors and siloed data.

Employee Self-Service (ESS)

The Paychex survey also revealed that 73 percent of employees expect a high level of self-service so they can complete an assortment of HR tasks on their own, and 80 percent would prefer to use a desktop or mobile device instead of paper. However, Hammond says nearly half of business owners don’t offer a paperless self-service option for basic HR-related functions like updating an address or filling out a tax form, even though it would reduce HR’s workload and allow departments to focus on more strategic responsibilities.

“Current trends and consumer behaviors show we’re in the beginning stages of a mobile-strategy shift,” says Kevin Andrews, chief technology officer at benefits-tech company Hodges-Mace. “HR understands that, in order to keep up with employees’ fast-paced, easy-access lifestyles, employers must connect via their mobile devices.” Andrews predicts that more companies will look for mobile-accessible HR solutions as they hear increased demand from employees.

Social Collaboration Tools

Research from Gallup reveals that companies with an engaged workforce perform better, and companies with highly engaged workforces outperform their peers by 147 percent. Hammond believes that integrating social collaboration tools such as chat rooms, instant messaging and video communication can help companies promote employee engagement.

“Similar to ESS mobile apps, social collaboration tools in the workplace offer a level of familiarity and resemblance to personal apps that helps engage employees from the start,” Hammond says. In private conversations or wider collaboration, social collaboration can improve internal connectivity. “For example, social collaboration allows for streamlined, personalized onboarding, offering employees access to the forms, information and people they need to start on the right foot.”

Realizing the importance of an engaged workforce, Thomas Bradbury, CEO of WorkplaceUX, also believes there will be in increase in solutions and platforms that are designed to increase employee engagement. “Businesses today want and need to keep employees connected so that the workplace is one that is mutually beneficial both to the organization (and its bottom line) as well as to employees, so that they feel valued, experience growth and have a sense of community.”

One element of employee engagement is self-determination, and HR tech will help workers take more control over their own success. “Employees feel more invested in their work and their company’s future when they have a greater sense of ownership in their success, and they see that their performance has a direct impact on the company’s overall goals and objectives,” says Rajeev Behera, founder of Reflektive. “Growth-minded companies are empowering their people with new tools to solicit and provide real-time feedback, build success recognition into the fabric of the culture and ensure that both managers and employees have the resources they need to innovate, grow and perform at their best,” Behera says.

#WorkTrends: Avoid the Company Culture Comparison Trap

Who’s at the top of this year’s Best Place to Work list?

According to Charlie Judy, it doesn’t matter — and you’d be better served taking a hard look at your own culture instead of everyone else’s.

This week on #WorkTrends, we’re talking to Charlie about how to understand your own unique culture, avoid the comparison trap and start building a better place to work.

You can listen to the full episode below, or keep reading for this week’s topic. Share your thoughts with us using the hashtag #WorkTrends.

What Does ‘Best Place to Work’ Really Mean?

We have a core problem in the conversation about company culture, Charlie says. “We’ve been a little brainwashed to think that we can really define what a ‘best workplace’ is all about. What’s best for me is not necessarily what’s best for you. Yet, we say companies are a ‘best place to work.’ Best for who?”

He says he’s worked with plenty of organizations that made those lists, but they weren’t actually “best” for him.

That’s because culture isn’t actually about things you can see — perks like snacks or cool offices. Culture is about the way work gets done.

How to Define a Culture

So, even if we move past the binary idea of “good” and “bad” places to work, it’s still incredibly hard to describe a company’s culture in a few words. We use words like “fun” or “innovative” or “collaborative,” Charlie says, but those words mean something different to every single person.

“How can you help somebody understand what innovation really looks, feels and sounds like in your organization?” That kind of “cultural clarity” is the first step in really helping others envision how the culture plays out.

Charlie says the answer to defining a culture is all about data. “We have to stop making assumptions about who we are and how we work.” And instead of just measuring outcomes, like someone’s overall engagement score this year versus last year, we have to measure and understand the drivers that led to the outcome.

We also need to break down buzzwords like “collaboration,” Charlie says. “Collaboration can mean a lot of different things, but you have to be able to describe it at a behavioral level. Go out and measure the behaviors. What are the building blocks of collaboration?” For example, you’d want to understand whether “collaboration” means that you all sit in a room and stay there until you make a decision, or that you make sure that you transfer information quickly to the people who need it, or that you remove barriers so that anyone can work with whomever they need to, at any time.”

There’s No Right Answer

Once you start to define what your culture really includes at a behavioral level, you’ll start to see that there’s no one right answer to building culture or engaging employees. “There is no formula,” Charlie says. “It’s about understanding what your business needs to be successful and then creating the culture that reinforces and clarifies that at every turn.”

He says that successful organizations are dedicated to working on culture as a continuous project. “It’s an indefinite project. You have to say, ‘We will continually do this forever, because it is part of managing our business.’”

The Future of People Analytics

Charlie is bullish on the power of people analytics, but he says we have to think differently about what we measure. “People analytics doesn’t mean your human-capital-management system. It doesn’t mean your HRIS. It’s about understanding how people work. That’s behavioral stuff, it’s deep, it’s emotional, it’s psychological. We’re talking about complex individuals.”

“We need to get better at anticipating what this organization needs three years from now, not yesterday,” he says. “We have to go deeper than what shows up on a dashboard.”

Continue the conversation. Join us on Twitter (#WorkTrends) for our weekly chat on Wednesdays at 1:30 p.m. Eastern, 10:30 a.m. Pacific or anywhere in the world you are joining from to discuss this topic and more.

Five HR Analytics Terms You Need to Know

I love big data. I love it for many reasons, but, as I’ve said before, one of the main reasons is the way it’s “raised the profile” of HR and its importance. The sheer volume of information HR analytics can bring to the table has moved HR practitioners from an “out of sight out of mind” back room business function, to a major player when it comes to company goal setting and overall planning. Today we use HR analytics for everything from determining passive and active candidates; assisting with onboarding, training, and engagement; and predicting retention, attrition, and performance rates.

That said, the sheer volume of data available today for HR professionals to work with can feel overwhelming, and at times, paralyzing. Not only do we have mountains of data to interpret, but the data is constantly evolving, shifting, forming, and reforming as we learn about the newest technologies, which actively measure even more employment-related functions.

The key to getting your arms around big data and analytics is to do your research and start to understand it. And to do that you must become familiar with its “lingo”.

Five HR Analytics Terms You Need to Know

Before 2011, if you Googled “data scientists jobs” you would be lucky to find more than a handful of listings. That has changed, dramatically. In fact, by 2015 the demand for data scientists had surpassed the demand for statisticians. But if you’re not lucky enough to have a data scientist on your team, fear not. Knowing the following five terms will lead you one step closer toward all the benefits big data and analytics has to offer.

Data mining. Try and wrap your head around this number: Around 2.5 quintillion bytes of data are created every day. Clearly, it can’t all be analyzed. There’s not enough manpower on earth to get that job done. And that’s where data mining comes in. Akin to “panning for gold,” data mining involves sifting through raw data, and finding where patterns emerge. Analysts convert those patterns into tangible information, which then allows for relatively accurate prediction making about real life behaviors or events.

Machine learning piggybacks nicely off of data mining, as it’s often used to make that mining job just a little easier. Just as it sounds, computers can “learn” from the data ingested, helping to translate the data into recognizable patterns. You will sometimes see the term Artificial Intelligence used instead of “machine learning,” as AI is what provides computers with the tools they need to absorb and sift through new information.

Hiring channel mix modeling. There are myriad channels available today for talent managers looking to recruit, including—but not limited to—advertising, employee references, recruitment consultants, and social media. Hiring channel mix modeling allows HR pros to make use of previous data on all of the hiring channels employed in the past, and clearly map out which ones were most useful, allowing for more efficient, streamlined human resources departments and optimized hiring expenditures.

Cost modeling. Cost modeling helps those in the C-Suite understand many HR-driven costs. These include hiring and onboarding costs, the time estimated for an employee to reach full productivity, salary and productivity ratios, overall productivity, and employee turnover costs.  Cost Modeling can provide a rich “dollar value” picture of hiring and retention plans for a given year, and allow you to quantify costs associated with certain activities and processes (like mistakes made in hiring, voluntary turnover, etc.) 

People analytics. Simply put, people analytics involves combining all of the employee data in your organization—and using that data to understand and help predict potential business problems, issues like sales productivity, retention, fraud, customer satisfaction, and more. It effectively helps measure the success of both human resources practices and learning and development programs, and eventually (as new apps are developed) will begin measuring the value of different roles, leaders, and other business investments.

While “gut instinct” is always a good thing to have, long gone are the days when that and a fancy resume were the only things helping HR practitioners make hiring and other decisions. Now, big data and analytics can help HR teams run in tandem with those from other key departments, as well as play a significant part in helping their organization achieve success when it comes to business goals and strategies.

What do you think? Are there other HR analytics terms that you’ve encountered? Has your company delved into big data and all its potential? I’d love to hear your thoughts.

A version of this post was first published on Converge.xyz

Photo Credit: hocmba@gmail.com via Compfight cc