When it came time for The Results Companies to select a workforce analytics application to help identify talent for its worldwide contact centers, the business process outsourcing firm was faced with one of two choices: either select a robust, on-premise talent measurement offering from an 800-pound gorilla or deploy a SaaS-based tool from a relatively unknown player.
In the end, after giving careful consideration to an offering from industry veteran of talent assessments SHL (which also had a Web-based version), The Results Companies opted for workforce management newcomer Evolv.
The decision to adopt a workforce analytics system enabled The Results Companies to identify top-notch candidates, slash attrition rates, update its business processes and cut recruitment costs, according to Daniel Dougherty, vice president of delivery solutions at the firm, based in Dania Beach, Fla.
That was in 2008. Today, the workforce analytics landscape is bustling with niche players, industry titans, consolidation deals and acquisition mania. There’s IBM’s acquisition of talent management software provider Kenexa for $1.3 billion, as well as SAP and Oracle’s purchases of SuccessFactors and Taleo, respectively. In the meantime, smaller players like Visier, Talent Analytics and Evolv are jostling for a bigger slice of today’s $4-billion talent management industry which is expected to grow another 15 percent this year according to research firm Bersin by Deloitte. And in May, as part of its Smarter Workforce initiative, IBM rolled out two new analytics software offerings: IBM Survey Analytics and Retention Analytics.
As vendors big and small inject new life into the workforce management field with powerful analytics capabilities, companies’ expectations grow. From trade magazine headlines to slick marketing collateral, there’s no escaping the buzz surrounding workforce analytics’ promises of identifying talent and predicting workforce trends. All of which has added to the challenges companies face when finding just the right provider. Fortunately, there are steps HR professionals can take to make sense of today’s crowded marketplace.
1. Determine your goals.
According to Mary Ann Downey, “The first question people need to ask themselves is, what problem are they trying to solve?”
Downey would know. She’s co-founder of HR Metrics Coach, an Atlanta-based HR consultancy. She says many companies begin the search for a workforce analytics tool when they’re experiencing problems such as high turnover or low employee morale. In this case, Downey says, getting to the root cause of an HR headache is best accomplished with tools from “niche players” like Evolv and Visier. “Their tools are usually more customizable; when you’re trying to diagnose problems it’s all about the customization.” For instance, a workforce analytics tool can be customized to hone in on a single area of concern such as attrition rates or particular skill sets.
On the flip side, if the goal is to “put information in managers’ hands so that they can manage their workforce better, then that’s where the larger tools come in handy,” says Downey. “They’re more geared towards scorecards and creating tools like dashboards, management reporting and management analytics that can help managers understand and make decisions about the workforce.”
2. Seek out a partnership with your vendor.
Key features and functions aren’t the only considerations when selecting a workforce analytics package. A strong partnership is also key, says Dougherty.
“We were looking for a good strategic partnership,” says Dougherty. For example, Dougherty says that The Results Companies has willingly worked with Evolv to refine its products, and that the two have even shared datasets for research and development purposes. “If we had a relationship with SHL or Oracle, I’m not sure we would have reaped those same benefits,” he says.
“SHL is more of a very large predictive analytics for hiring provider that has been in the space for a long time,” says Dougherty. “The main thing that drove our decision wasn’t features and functionalities. We were looking for a good strategic partnership with strong client relations and excellent tech support.”
Nels Wroe, product director for SHL, says that it is a common misconception by companies exploring workforce analytics “to put a primary focus on the system for workforce performance and planning, and overlook where the actual data may come from.” SHL’s assessments produce data that customers can enter into an HR information management system or an advanced technology services system such as Taleo. (In 2012, SHL was acquired by the Corporate Executive Board.)
“The type of analytics data that SHL provides is actually highly complementary to, not competitive with, companies that offer workforce management systems that aggregate a broad spectrum of analytics data,” Wroe adds.
As for SHL’s approach to customer partnerships in general, Wroe says that in addition to offering “round the clock support, maintenance and monitoring services,” SHL “works with clients very closely should they require their talent assessments be customized to reflect required brand experience.”
With the rising number of options, Downey says that having to choose between a large workforce analytics vendor and a smaller player is a common conundrum for companies today. She offers this rule of thumb: “In general, smaller firms are more flexible and creative while the larger firms have access to more resources and approach problems in a more traditional fashion.”
3. Head to the Cloud.
Years ago, selecting a software tool often came down to whether you wanted to purchase the servers and hardware necessary to support an on-premise system or to turn to a third-party provider for a hosted and managed tool. Nowadays, however, “Everything is considered SaaS,” says Downey.
Dougherty agrees. “It’s not even a question anymore,” he says, adding, “Cloud-based solutions are the way to go for turn-key implementation and a phased approach to deployment.”
4. Insist on performance and service quality.
For all the cost savings and convenience they promise, cloud-based analytics packages can encounter performance glitches and users need to make sure their vendors are ready.
In the event of unanticipated downtime, Dougherty says it’s critical that a vendor be able “to respond quickly. We don’t want a partner with a lot of rules, policies, red tape and bureaucracy.”
Dougherty says a vendor must be able to respond to outages in minutes – not hours. For this reason, Dougherty says companies should ensure that a vendor can provide a single point of contact for customer service. And don’t be afraid to vet a vendor’s data center for Tier 3 security, encryption capabilities and disaster recovery protocols – variables that should be negotiated ahead of time in a service level agreement with a vendor.
5. Keep expectations realistic.
With all the hype surrounding workforce analytics, it’s no wonder companies often have unrealistic expectations of what they can accomplish using these tools, and how quickly they’ll see results.
The reality is different. “Many think they’ll get the solution and just flip the switch,” says Downey. “But there’s work and effort required. There are some folks that are looking for a silver bullet and I don’t think it exists.”
Downey says determining how much data you have to work with, and what type of insights can be gleaned within a certain timeframe, can help set realistic goals and avoid disappointment. For example, Downey says that a small company with a limited amount of data to mine and a tiny “statistical sample” shouldn’t expect to unearth course-altering insights. Similarly, HR divisions that don’t have the support of senior-level management will have a tough time convincing line-of-business managers to listen to the data.
Cindy Waxer, a contributing editor who covers workforce analytics and other topics for Data Informed, is a Toronto-based freelance journalist and a contributor to publications including The Economist and MIT Technology Review. She can be reached at firstname.lastname@example.org or via Twitter: @Cwaxer.
Correction, August 7, 2013: This story has been updated to reflect a correction. The original version of this story referred to the Results Companies choosing Evolv over SHL’s Talent Analytics in 2008. However, that SHL offering was not available until the fall of 2011. It also notes that SHL in 2008 offered both on-premise and Web-based talent measurement services. And it adds the fact that SHL is a unit of the Corporate Executive Board.
Clarification, August 7, 2013: The original version of this story has been updated to include comments by SHL that are a direct response to a critique that it did not present itself as a suitable strategic partner.