An Eye on Talent: Linking People Analytics to Retail Outcomes An Overview for Innovative HR Leaders
An Eye on Talent: Linking People Analytics to 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.
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.
Getting a Handle on 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.
Establishing a Talent 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.
10 Step Talent Strategy Frameworkvi
Deciding on a Build or Buy 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
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:
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.
The Talent Strategy Institute’s Model of Workforce Intelligence, Showing Enablers of Operational Excellenceix
Workforce Analytics
Predictive Analytics and Linkage Big Data and Machine Learning Social Network Analytics ExperimentationHR Metrics and Reporting
Descriptive Statistics Cluster and Basic Analysis Compliance Reporting Dashboards and ScorecardsWorkforce Planning
Forecasting Labor Demand and Supply Gap Analysis Modeling and Scenario Planning Talent Strategy OptimizationWorkforce Management
Payroll Allocation Labor Scheduling Modeling and Scenario Planning Productivity and OptimizationWhat 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.
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 your technology, 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.
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.
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
Utopia is a Data-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.