An Eye on Talent:

Linking People Analyticsto Retail Outcomes An Overview for Innovative HR Leaders

Table of Contents

An Eye on Talent: Linking People Analyticsto Retail Outcomes

2. Competing for Talent with the Customer in Mind

3. Getting a Handle on Turnover

4. Establishing a Talent Baseline

5. Deciding on a Build or Buy Strategy

6. Enabling Operational Excellence

7. What Defines People Analytics Maturity?

8. Identifying What Great Analytics Looks Like

9. The Effects of Consumer Fragmentation on Retail

10. Career Development and HR Data Literacy

11. Utopia is a Data-Informed Culture

1.

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An Eye on Talent:Linking People Analyticsto Retail Outcomes Retailers today face an evolving and highly competitive market—all in the face of a global talent crunch.i With rapidly changing consumer preferences and increased fragmentation, your people are the key to elevating the customer and brand experience to a level that drives loyalty. But how effective is your HR team at putting the right people analytics in place to understand how associates, ecommerce managers, and other employees impact the customer experience?

Not surprisingly, many HR teams often struggle with this type of workforce intelligence. Data is more accessible than ever, but without the right framework in place, it is hard to get a clear picture from the data and integrate it into decision-making. This directly impacts agility—giving companies further along the analytics maturity curve a competitive advantage in how they hire and manage their retail talent. In this ebook, we review foundational people analytics concepts to help you keep pace.

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Competing for Talent with the Customer in Mind Every month around 3.4 Million people change jobs.ii It has been 49 years since we have seen unemployment at 3.7% or below, and Bloomberg recently reported that for the first time, the number of jobs available outnumbered the number of available people to fill them.iii

As a result, the first issue for many retailers is getting enough of the right people to work in stores and customer service, so that you have the best-fit associates handling the customer relationship. While it’s not any one customer touchpoint that has the most resonance, each interaction with your employees, and by extension your brand, comprises the holistic customer experience.

Whether you are a Bricks and mortar or digital retailer, you need to think of people issues from your customer’s point of view. And in the current competitive job market, retail recruiters are competing for leaders and associates who have an affinity for their brand, are dependable, motivated, and have the right qualities to thrive in customer service and sales. That’s why AI and predictive analytics are so powerful in your people analytics toolbox—they recommend best-fit and high potential candidates.

“By 2030 there is projected to be a global talent shortage of 85 million workers creating an unrealized value of over $8.5 trillion dollars.”iv

—Korn Ferry, The Global Talent Crunch, 2018

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Getting a Handleon Turnover Without the right people, you can’t win in the marketplace. That’s why getting a handle on your talent pipeline and turnover is imperative to fuel your growth, brand, and customer experience. As unemployment goes down, the number of people taking advantage of new job opportunities goes up. It’s up to HR to lead the business in asking the right questions to predict and prevent turnover—measuring areas such as culture, employee experience, and effectiveness of high potential strategies. When there are a lot of job opportunities in the market, and a smaller pool of candidates to fill those jobs, talented candidates negotiate better deals—leading organizations to look more closely at the cost of turnover. The more openings you have on a continuing basis, the more productivity is lost, which can create a negative customer experience that has a far-reaching effect on the brand. Even a small improvement in turnover and productivity can have a significant impact on cost savings and customer satisfaction for your business.

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Direct Cost to Replace an Employee

Average Cost by Hire $3,976

$3,000

Total Direct Costs $6,976

Average First-year Orientation andTraining Costs Per Hire

Total Cost of Voluntary TurnoverPer Lost Employee

Direct Costs $6,976

-$18,200

+$120,900

Total Cost of Voluntary Turnover $109,676 Per Lost Employee

Interim Reduction in Labor Costs

Lost Productivity

Source: Bersin by Deloitte, 2016 v

Establishing aTalent Baseline With recruiting and retention in mind, let’s review a framework for talent and analytics success. It starts with one overarching question: how will we deliver on our business plans and goals through people? Look at the chart on the next page and think through some of these questions for your retail business. First, consider what HR needs to deliver to produce results—in other words—what has the business set out to do and what capabilities are needed to execute on the strategy? Are you accelerating your digital strategy over the next year? Creating an in-store experience? Once you have agreement on what you need, it’s helpful to establish a talent baseline. Ask key questions like: what is our bench strength, do we have skill gaps, and what are our current leadership capabilities? Then, evaluate your recruiting and retention/attrition metrics and trends to see how you’re performing today.

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Step

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Step

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10 Step Talent Strategy Frameworkvi

Begin with the strategy of your function or business...Think about what you need to deliver to produce results and win in the marketplace

What is the business committed to delivering?What business capabilities do we need to build to deliver on the business strategy?

What are the most critical capabilities needed to drive the achievement of business goals?

How will we deliver on our business plans and goalsthrough people?Given the capabilities we need to build,

What kind of people do we need?

How many?

What are our critical roles?

What are our critical behaviors?

What kind of leadership will drive our success?

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Now that we understand our talent baseline, what’sthe next step?

What’s our plan to close skill and performance gaps?

What do we need to do to drive change?

How will our talent strategy help us deliver onbusiness strategy?

If this is what we need, where are we starting from?

Assessing our current talent landscape...Look at:

Bench strength for key jobs

Recruiting, retention, attrition, metrics, and trends

Skill gaps

Performance gaps

Leadership capability

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Step

7

Step

8

When these are important and/or available go forthe build strategy.

Time

Resources/cost

Legacy knowledge

Moving people through your bench

Retention/stability

Closing gaps in capability, skills, and performance.Option 1: Build strategy

Development planning

Succession management

Designing roles for development assignments

Assessment

L&D interventions

Coaching and mentoring

Performance management

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Closing gaps in capability, skills, and performance.Option 2: Buy strategy

What are the most critical capabilities I need to build quickly with an external infusion of talent?

Where will I find strategic hires?

How will I onboard external talent to shorten the learning curve?

When these are important and/or needed go forthe buy strategy

Speed

Unique skills/talent

Filing in a thin bench or an empty bench

Fresh perspective

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Deciding on a Build orBuy Strategy Now that you understand your talent baseline, the next step depends on your needs and strategy. As you look to close talent gaps in capabilities, skills, and performance—and ultimately drive changes needed to meet business goals—you have the option to either build or buy. Retailers may look at a talent build strategy when: time, resources, cost, legacy knowledge, and stability are critical. A build strategy focuses on developing your people and preparing them for higher-level jobs, which ultimately improves retention. On the other hand, a buy strategy comes into play when you are looking to hire quickly, need unique skills or talents not already in place, want a fresh perspective, or simply have a thin bench. If you decide to acquire talent, make sure new associates have personalized onboarding that makes it clear what is expected on day one and how it connects to performance metrics.vii

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Enabling Operational Excellence Al Adamsen, a key thought leader in the people analytics movement and head of the Talent Strategy Institute, categorizes workforce intelligence services into four key areas:

1. Workforce analytics2. Workforce planning3. HR metrics and reporting4. Workforce management

Areas like workforce planning, which is more focused on the supply and demand relationship in the future, and workforce analytics, which focuses on topics like research, predicting turnover, and linking the employee and customer experience, can and should work together.viii

Using HR metrics and reporting to aggregate and visualize the data is easier as more companies adopt a unified cloud that brings all employee data together with intelligent dashboards that can be used across business teams and roles.

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Workforce AnalyticsPredictive Analytics and Linkage

Big Data and Machine Learning

Social Network Analytics

Experimentation

Workforce PlanningForecasting Labor Demand and Supply

Gap Analysis

Modeling and Scenario Planning

Talent Strategy Optimization

HR Metrics and ReportingDescriptive Statistics

Cluster and Basic Analysis

Compliance Reporting

Dashboards and Scorecards

Workforce ManagementPayroll Allocation

Labor Scheduling

Modeling and Scenario Planning

Productivity and Optimization

The Talent Strategy Institute’s Model of Workforce Intelligence,Showing Enablers of Operational Excellenceix

Source: Talent Strategy Institute

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What Defines People Analytics Maturity? While people analytics is certainly not a new concept, the editors from Human Resources Management have noted that the new trend is understanding not just HR activities (such as cost per hire), but tying productive business outcomes back to the workforce.x Bersin by Deloitte also found this focus on aligning analytics with the business stating that, “Mature people analytics organizations are three times more likely to embed people analytics in business decisions.” The same research went on to identify other key traits of mature people analytics functions some of which include: consistent access to accurate and secure data, data from multiple listening channels, data-literate HR practitioners, diverse expertise, and strategic alignment with the business.xi For retailers, collecting data from multiple listening channels stands out as an important factor as you look to harness data from consumers, store locations, and online reviews to augment employee insights.

“High-maturity organizations, or those using people analytics in a sophisticated and insightful way, report 82 percent higher three-year average profit than theirlow-maturity counterparts.”xii

—Bersin by Deloitte

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Identifying What Great Analytics Look Like What do great analytics look like within your retail organization, and how do you disseminate meaningful information? Start by understanding what changes will result from the insight that you gather. Guenole, Ferrar, and Feinzig, authors of the book The Power of People, have crafted an eight-step model for purposeful analytics that starts with framing business questions—essentially understanding the reason for the analysis and how it ties back to the business.xiii When planning for the considerations that are going into yourtechnology, focus on the “why” so that the outputs tell a story that is easy to communicate across the employee lifecycle. In retail, many of these questions will start with how employees impact the customer experience through leading indicators of customer satisfaction or NPS like store cleanliness and wait times. The more effective you are at conveying the insights, the more likely they will be used, and HR will be seen as bringing new value to the business.

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The Effects of Consumer Fragmentation on Retail One of the major trends impacting the future of retail is increasing consumer fragmentation. According to Michael Dart’s book Retail’s Seismic Shifts, when attitudes and tastes diverge across communities, it causes distinctive consumer behaviors that can reduce demand when there is no big trend to drive spending.xiv This is a big business challenge and could be an interesting one to form some business questions aligned to people analytics. For example, you can try to understand whether staff are influencing what people buy in certain communities. Tackling these types of questions becomes increasingly possible as retailers bring their back and front-office systems together, connecting CRM, HCM, and ERP in the cloud.

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“Competence in workforceanalytics must be cultivated:It won’t appear on its own.”xvi

—Mark Huselid, Human Resources Management Journal

Career Development and HR Data Literacy Learning and development opportunities for HR practitioners are a necessity as you look to create analytics competencies and skills needed to support a culture of people analytics. In larger organizations, there may be dedicated people analytics teams, while in smaller departments the task may get added onto existing roles and responsibilities. Regardless of the approach, improving HR data literacy is an opportunity to elevate the status of human resources and align to the business. It’s also most successful in organizations with top-down buy-in—inspirational leaders and CHROs who are involved help companies excel.xv

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Utopia is aData-Informed Culture What are you good at; what are your career aspirations; what are your goals? For one well-known retailer, every employee has this touch point at least every quarter. In turn, managers are empowered to make decisions based on that data. Stores that did had 50% less turnover, were in the top quartile of customer satisfaction, and were $100K more profitable.xvii It became part of their culture to make decisions based on data. When your organizational culture starts from your employees’ and customers’ experiences and aspirations, and then uses data to better understand how to improve, your HR team will be empowered to have high value conversations with the business. And in an ideal world, cloud technology and culture intersect to create new ways for HR to innovate and mature their people analytics strategy.

Video: Oracle Talent Management—Engage and Retain Your Superstars

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Step

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Step

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Action Steps: Understanding the Talent Pipeline and Turnover

Consider AI and predictive analytics for your people analytics toolbox—they recommend best-fit and high potential candidates.

Create a talent-strategy framework.

Use HR metrics and reporting to aggregate and visualize the data with a unified cloud that brings all employee data together.

Collect data from multiple listening channels to augmentemployee insights.

When planning for the considerations that are going into your technology, focus on the “why” so that the outputs tell a story that is easy to communicate across the employee lifecycle.

Add learning and development opportunities for HR practitionersin analytics.

Ask the right questions to predict and prevent turnover—measuring areas such as culture, employee experience, and effectiveness of high potential strategies.

To connect with Oracle, visitgo.oracle.com/hcm

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xiii Ferrar, Jonathan, The Power of People (article 3 of 7), May 2017,https://www.linkedin.com/pulse/power-people-article-3-7-jonathan-ferrar/

xiv Retail Touchpoints, 2018 Will Be a Retail Tipping Point, March 2018

xv Green, David, Top 40 HR & People Analytics Articles of 2017,https://www.linkedin.com/pulse/top-40-hr-people-analytics-articles-2017-david-green/

xvi Huselid, Mark A. Human Resources Management, The science and practice of workforce analytics: Introduction to HRM special issue, May 2018

xvii Oracle People Analytics in Retail Webcast, 2017

ContributorsPamela Stroko, Vice President HCM Transformation, Oracle

Melissa Morgan, HCM Content Strategy, Oracle

Citationsi Korn Ferry, The Global Talent Crunch, 2018

ii CNBC, How job-hopping in this tight labor market can help you snare a fatter paycheck, Sept 2018

iii Bloomberg, U.S. Job Openings Rise to Record, Exceeding Number of Unemployed,June 2018

iv Korn Ferry, The Global Talent Crunch, 2018

v Bersin by Deloitte, High-Impact People Analytics: The Recalculated Route toMaturity, 2017

vi Stroko, Pamela, The Chemistry of High Performance, Chapter 6, 2018

vii ibid

viii Ademsen, Al, Talent Strategy Institute, Oracle People Analytics in Retail Webcast, 2017

ix Stroko, Pamela, The Chemistry of High Performance, Chapter 5, 2018

x Huselid, Mark A. Human Resources Management, The science and practice of workforce analytics: Introduction to HRM special issue, May 2018

xi Bersin by Deloitte, High-Impact People Analytics: The Recalculated Route toMaturity, 2017

xii ibid

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