Friday, November 05, 2010

How a customer uses HR Data to predict who will stay with the company

I visited a utilities customer yesterday. They are very concerned about the fact that more than 40 percent of their employees are becoming eligible to retire in the next two years. I asked them what they are doing about it. Among other things they shared some interesting insight.

They have information about the person's age, the age of an employee's dependents, their pension balance, the retirement saving balance and vacation balance. From this data they said that the are able to predict with remarkable accuracy, the year in which a person retires.

They did not talk much about similar data for their younger population. So I pointed out a few research findings to them.
  • A younger employee who has signed up for a retirement plan, such as the 401K plan in the US, indicates a willingness to stay longer with the company. If you are a manager, encouraging your team members to signup for 401K may make them more likely to stay.
  • Cognizant Technologies found out that an employee who blogs about his work inside or outside the company is more engaged, satisfied and hence is likely to stay longer with the company. Encourage your employees to blog about their work and expertise.
  • An employee who is connected with more colleagues and collaborates with many people is more likely to stay with the company for a longer time. Research shows that people who collaborate also make more money than those who do not. Encourage your employees to develop weak connections outside the team. Track them using enterprise social networking software if you can.
  • Google found out that talent employees quickly become unhappy if under-utilized. An employee who is involved in multiple activities within the company keeps herself busy and hence is less likely to feel under- utilized. You may need a tool to track people's activities. If there is no specialized tool, employees can at least provide simple short updates in your current collaboration tool. Such information, if  included in your employee performance management system, will give empirical evidence of activities or the lack of it. You should not wait until the annual performance review to find this out. It may be too late.
There is an interesting article in HBR on Talent Analytics if you are interested.
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