Predicting Employee Attrition Using Big Data

 

2 weeks ago, the HR Head asked me a question – I want to know which employee is going to put in his papers – and when.

 

It was one of those rare moments when i was completely, totally stumped.

 

Here is a partial answer- How to use Big(and small) data together to predict employee turnover.

 

Factors that impact turnover

Lets start at the very beginning. What makes an employee quit?

 

When I conducted Exit interviews at our small 700 people IT organisation, i wouldnt ask them, “why are you leaving?” I would ask, “Why did you start looking?” I wanted to understand where the distance began, and why. The resignation is not what we are investigating. That action is the result of a disengagement that began weeks, months, even years before the actual resignation.

 

We are investing that disengagement. And the probability of its resulting in a separation. Two different things.

 

How do we measure something as intangible as disengagement?

 

I believe we may have some ideas here.

 

Pointers to Disengagement

 

• Employee Satisfaction Scores

This one is apparently a no brainer. Yet I am suprised to see that most ERP packages dont have a place to store the employee’s engagement score and compare that year on year. Then check for its correlation with their performance ratings and other behavioral actions. There are pointers there.

 

• Social Media Activity

This is where big data comes in. Have an internal IM program and an internal social media platform like yammer or internal discussion boards? Let your Big Data analysts do quick calculations on how often and with how many colleagues the IM was used. And how often the social media platform and discussion boards were used. Engaged employees will use more “connection points” to connect with the organisation and its people.

Notable Exception: Introverts. Introverts are people too. And they wont use Social Media. The end of this post says “Its the pattern, not the static data.” Read that section to know more.

 

• Meet the Parents

This is one of my favorite metaphors. When they bring the family, they are engaged. No exceptions. This also can be automated. Attendance at the family events is automated and can be fed into the giant supercomputer for automatic analysis. If you know when they stopped bringing the family, you know when they started thinking out.

 

• Access Card Patterns

Another big data beauty which needs individualised reading to make sense. How often was the access card used to go in and out? Whats the pattern? Has it changed lately?

 

Which access cards are used together? Are the breaks in groups, with one or two friends, or alone?

 

• Use of development resources on the learning portal

What kind of courses are being accessed? What was it earlier? Is it consistent with the expectations of the current role? What is the usage pattern?

 

• Correlate with Performance Ratings and the moneys

The higest risk categories are employees who have recently witnessed a fall in the rating, or whose difference from their maximum potential earning is very high. Let me explain. Suppose Mr. Alpha is paid INR 100 at the highest paying company. You are at the 60th percentile as an organisation, so you pay INR 60 for the same profile. But suppose the actual salary of Mr. Alpha is not INR 60, but INR 55, because of your internal compa ratio adjustments. Which means that Mr. Alpha is at a 45% discount from his maximum earning potential. That kind of gap is not sustainable.

 

And lastly, remember, its the pattern, not the static data. Big data will, over a period of time, establish patterns of behavior for each employee. When this pattern of behavior changes in a perceptible way, and for a consistent period, you know you should care enough to investigate more.

 

Does disengagement always result in attrition? Is it worth bothering with if it doesnt lead to attrition? What are some of the other pointers that can be used to arrive at behavioral disengagement? Anything we have missed out in the article above?

The Monetisation of Social Capital

 

As we write, Twitter is likely to be valued at 11 billion. Facebook’s current market cap, according to this article, is at 100 billion.

If you were an old grandmother somewhere in (any part of the world), who was a nosy Parker and knew something about everyone’s affairs, obviously you could guide a traveling salesman to the house that is most likely to buy the stuff he peddles. But the question is, how much would that traveling salesman be willing to pay you for that information?

 

And the answer is – 100 billion? 11 billion? 340 billion?

 

What is the point? Bear with me while we explain this.

 

The economic value of social capital is a very new phenomenon for the human civilisation. Social capital has always existed, and has helped society immensely – as traditional medicine, gossip (and what would we be without gossip?) , product recommendations from friends (remember Amway and Avon?) .. et al.

 

For the first time, we see a price – a very substantial, tangible price, being put on the notional value of this information.

 

Is this information, inherently, worth the price we put on it? How much more do companies sell on targeted advertising vs generic advertising?

 

I do not have an answer. Given the size of global commerce, the numbers could be too low, or too high, depending on that crucial factor – IS the grandmother’s knowledge of which house to go to, leading to a sale?

 

And i really think we should pause and ponder.

Social capital also has a social cost.

The second factor in the monetisation of social capital

 

The second factor, quite simply, was that we had the computing power and the algorigthms needed to get the juice out of those digital social conversations.

This mass of data could not possible have been analysed in this way 20 years ago. Even if someone had, at that point, created a facebook, it is unlikely that we would have seen the value of this social capital in 1993.

The critical thing is, that with the advent of big data, came also the ability to handle it productively. (or, at the very least, as productively as we are handling it now).

Together, the digitised social interactions and the algorithms, create a notional value which has a definite financial worth attached to it.

Concluding question: Who owns these social interactions? The generators of content, or the aggregators who provide a free space, and then aggregate that content for their profits?

Using the Talent Pool without having to hire them

 

Suppose there was a way by which you could assess the technical competence of a candidate even without putting them in an interview?

 

Suppose further, that by this method, you could also get the person to contribute to projects in your organisation without getting paid – on their own time?

 

Suppose that this tool also allowed you to actively stay in touch with your alumni, with the possibility of rewarding them for continuing to be associated with your brand?

 

You are most likely to say that is impossible. And for the most part, it is. Which is what makes this tool so awesome.

 

The Magic..

The tool is a discussion board, open to internal and external folks, enrolment purely voluntary, and all participation rewarded with points.

The points can be converted to monetary and non monetary rewards. Monetary rewards are gift cards from selected vendors. Non monetary rewards are invitations to employee only events (for non employees), membership to industry bodies sponsored by the organisation, and so on.  

 

When you face a business or technical challenge, put it up. Let people respond. All participation rewarded, and all productive answers rewarded extra.

 

Let it be everyone’s playground – from the junior to the senior most person, let everyone talk about strategy to maintenance, from diversity to facility management.

 

The Numbers

Crowdsourcing of ideas is not new. But here is what this model has in addition to ideas:

1. Rewarding Engagement – internal and external, in tangible ways.

2. Pre selecting talent on the basis of their actual contribution and not just on the basis of their interview performance.

3. An opportunity to notice skills/ideas of employees that they are not able to demonstrate in course of their normal work.

 

On the cost side of the equation is the cost of building and running such a platform. Or buying one. On the benefit side are intangible benefits that quite simply are not available elsewhere.

 

The maths makes the most sense for a mid – large sized company in niche skill areas like audit, acturial, IT, Energy, Infra, Manufacturing, community building, city planning, e governance.  

 

The maths does not make sense for generic skill organisations or organisations that depend largely on cottage industry inputs for sustenance. It also does not make sense for talent communities with low penetration of computers.

The Whack a Mole Model of Innovation and the Innovation Cubbyhole

 

Children have a game called Whack A Mole. In this game, a random mole comes out of a random hole and you have to push it back in.

 

Most organisations do the same to their internal innovators.

 

Playing Whack a Mole with your innovators

When an employee gets an idea, they have to take it to their manager for approval. Usually, the manager stands to gain little if the idea works, and lose much if the idea fails. Or perhaps,  its simple fear of change and they discard the idea (or promise to work on it but never get around to that).

 

Then, a few days later, another employee in another department comes up with an idea. Again, it is taken to the manager, and then his manager, until, at some level, it is properly evaluated and put down. Nothing personal, of course.  

 

And that is how organisations play whack a mole with their innovators. What happens is that the organisation ends up not seeing any noticeable innovation for years. And we all know the result of that.

 

There are 2 ways to stop playing Whack a Mole.

The first, and the more difficult, is to create a culture of innovation. That will take time.

 

So you can take a short cut. The beauty of this short cut is that its proven, and it will help  you get to a culture of innovation too.

 

The Innovation Cubbyhole

There is nothing new about the idea. The only point of this post is that you can use the Innovation Cubbyhole to circumvent the Whack a Mole culture while you are fighting it.

 

1. All employees can take a certain percetage of their time in the Innovation cubbyhole. No questions asked.

 

2. All employees have access to some company resources. Whatever is available in the cubbyhole is yours to use. If you need anything extra, read Rule 3.

 

3. All employees have a limited, preapproved budget in the cubbyhole. Once you sign into the cubbyhole, you get pocket moneys (aka the preapproved budget) to spend on your project. Its not a lot, but its theirs.

 

4. If a project fails, all you have to submit is the failed equipment, and a detailed lessons learnt document, incl. what you did, how you think it can be done better etc. Its all squared. No blame game, no questions asked.

 

5. Got a bright idea but lost interest / got transferred / dont have time? no problem. Sign into the cubbyhole, put the idea up, and leave. Someone can come to the “Wall of Abandoned Babies” and pick up an idea. Just like that. Leave all literature of work done so far in the Cubbyhole, neatly archived and all that, so that your colleagues can take it up from where you left.

 

6. Once you are ready, make a more formal presentation to the people who might benefit from the project. Explain and sell the idea to them. If they agree, it will be taken for mainstream adoption.

 

7. If you save your pocket money, you can either return it, or carry it forward to another, bigger project of yours. In short, you are rewarded for being frugal in your success.

 

The advantage of this approach is that small innovators can work to create a pilot proof of concept. it is much easier to convince people with a working model in hand.

 

The second, and the bigger advantage is that, if no approvals are necessary, it becomes a little more difficult to whack the mole. The “approval” is the hammer in the hands of the player. You cant play whack a mole without the hammer.

 

There is one key requirement, however. One must hire an absolutely insane person to head the cubby hole. Someone who truly believes that anything can be done. ANYTHING. And the person doing the hiring should have the same insane belief.

 

Endnote:

Look around you. When was the last time you saw a real employee led innovation in your organisation? Was it in the last 12 months?

Steps for creating an ERP PMO

 1. Scope : At what level do you define “Project” – at the module level, submodule level, or the entire implementation is one project? A lot of people use module, but it’s really a function of what a PM should be able to handle. Before you create what will be handled by a PMO, you have to be clear about what the PMO will NOT handle and should be handled by the individual PMs at their own level.

2. Span of Operations: Remember that a PMO is only ONE step above the PM. If you need program management, create a Program Management Office. If you are working on something even bigger, don’t hesitate to create a portfolio management team. Determine the complexity and the experience of a team, and then arrive at a considered decision.

3. Workflows: Determine workflows for decisions, escalations and status updates. At the very least.

4. Information Sharing: Determine what information will be shared with the PMO, by whom and at what frequency.

5. Rules and Authority to Decide: Who has the authority to decide? What is the quorum? For instance, can a decision about a module be taken if the module lead was not in the meeting? Can a release be approved without the change manager?

These should cover the fundamental setup of a PMO.

Lifecycle of the Innovating Organisation

 

We have all heard that story before – a brilliant idea, led to the creation and growth of a market leader. Then, something went wrong, and within a century, or less, the pathbreaking organisation was on its way out.

Usually, the meteor that hits the organisation is , ironically, flab and lack of innovation.

 

We all know, also, about the innovation life cycle.

 

Image Courtesy: http://www.jplcreative.com/blog/index.php/2010/01/26/marketing-strategies-for-innovation/

 

But here, I am talking about the Lifecycle of the Innovative Organisation.

 

An innovative organisation is an organisation that continues to innovate – not for business success, not to get more territory, not to do things better, but just as a matter of course. As a way of BEING. Its in their DNA. All of the business benefits – quality improvement, newer products, better markets, are side effects of that way of BEING. As are product failures, millions of lost dollars, some lawsuits et al.  

 

This distinction is important – In an innovating organisation, innovation is not a means to an end – nor an end in itself. It is, quite simply, be who they are.

 

3M is the obvious example that pops up when we talk about innovative organisations. There are, of course, others. General Electric. I will not put Apple in the list. Because honestly, we have no idea what the culture is INSIDE Apple.

 

What makes these organisations Innovative Organisations? What can other organisations do to remain (or become) innovative?

 

This article here has some very sound models for organisations asking “What can we do to become innovative?” (Blackberry and Nokia come to mind) . My post is about what MAKES these organisations innovative? What keeps innovation in their DNA?

 

And the hypothesis is this: Leadership does.