MCBASSI & COMPANY

An Analytics-Enhanced Employee Survey

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Welcome back (at least to those of you in the northern hemisphere) to the new, even-more-frenzied, post-summer work reality!

For those of you beginning to be immersed in 2015 planning and budgeting, we’d like to offer some thoughts on how to get more bang for your buck from your next employee engagement survey.  In one sentence: you should use it as cornerstone for a strategic, analytics-enhanced HR measurement strategy.

When employee engagement data is properly designed and cleverly analyzed, it is an enormously powerful foundation for creating actionable, fact-based insights to drive better business results.  It is the single most important source of data enabling you to move beyond “descriptive” HR metrics to “predictive” human capital analytics.  By identifying the human drivers (and impediments) of business results, these analytics insights provide a strong evidence base both for guiding HR investments and documenting their impact.

Through linkage analysis – the mapping of employee engagement to important business outcomes­ – it is possible to develop insights into the HR strategies that will have the greatest positive impact on your organization’s greatest challenges, such as the following:

  • Revenues
  • Cost containment
  • Profitability
  • Customer service issues
  • Productivity
  • Safety
  • Managerial effectiveness
  • Training effectiveness
  • Employee engagement
  • Absenteeism
  • Regretted turnover

The bottom line – an analytics-enhanced employee survey is a far better investment than the traditional, HR check-the-box employee engagement survey!

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Where Does Human Capital Fit in the Sustainability Agenda?

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My new article in the May 2014 issue of the Cornerstone Journal of Sustainable Finance and Banking explores new research (with David Creelman and Andrew Lambert) on the progress some companies are making in reporting human capital metrics in their integrated reports.

While encouraging that a growing number of firms are beginning to disclose more information on elements of human capital, it’s clear that most of the disclosures still fall short of providing a comprehensive look at what’s creating or destroying value on the people side of the business.  Indeed, many key human capital measures known to predict future performance (employee engagement, training investments, internal promotion rates) are being reported by less than half of even those companies integrating financial and human capital reporting.

I propose a framework that CEOs and Boards of Directors can use for two purposes:

  • To measure and manage six key elements of human capital risk
  • To serve as a foundation for communicating more effectively with investors

Curious?  Check out the article for full details.

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A Smarter Annual Report webinar

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Join us on May 29, 2014, at 12:00 noon EDT for a webinar on “A Smarter Annual Report — how companies are integrating financial and human capital reporting.”

To register for the webinar, simply click here.

We hope to see you there!

Drum Roll, Please

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Finally: the moment you’ve all been anxiously awaiting.

The winner of the 2014 HR Analytics Haiku Contest is Evan Sinar!! (Cue wild applause and confetti.)

Evan’s winning haiku captures something of the very essence of analytics:

The perilous route
From raw data to actions
Analytics guides

As the winner, Evan will receive copies of two must-reads: the HR Analytics Handbook and Haiku U.

Congratulations, Evan, and thanks to everyone for all the clever, funny submissions we received.  We enjoyed reading them, interpreting them, debating them, and, of course, counting their syllables.

Six Human Capital Risks Your Board Needs to Know About

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Boards of directors have a fiduciary responsibility to manage risk.  Although there is no shortage of risk on the “people side” of most businesses, it is rare for boards of directors to have the right information to prudently manage these risks.

Part of the problem is that boards tend to focus too heavily on executive talent and too little on employees below the executive level.  But another part of the problem is that HR often fails to provide a coherent view of what creates, limits, or destroys value on the people side of the business.

The figure below, originally proposed by Jim Marchiori (Executive Director, University of Colorado Global Energy Management Program), presents a risk-based “people management framework.”  It can be used both for helping boards to ask better “human capital questions” and for improving HR reporting to the board.

  

Some questions to bring this perspective to life include:

1.  Capability Risk:  Do our people have the knowledge, skills, resources, and business processes that will enable them to perform effectively?
2.  Alignment Risk:  Do our people really understand our business strategy and goals?  Do they perform their day-to-day jobs in alignment with those goals?
3.  Availability Risk:  Are we finding and acquiring the right people?
4.  Turnover/Demographic Risk:  Are we retaining key people?  Do we have a pipeline sufficient to replace departing employees?
5.  Engagement Risk:  Do our people go the extra mile?  Does this show through to our customers?
6.  Leadership Risk:  What is the risk that any initiative will fail because we don’t have the leadership depth or quality needed?

These are the sorts of questions you should be building into your organization’s HR analytics strategy, including a process for regularly updating your board of directors on high-level metrics, trends, and predictive analytics.

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