Instrumented Interconnecteds Intelligent

Eric Lesser, Research Director and North America Leader, Institute for Business Value, IBM

Eric Lesser, Research Director and North America Leader, Institute for Business Value, IBM

By Eric Lesser

You might think that the key to selling popcorn at a movie theater concession stand is adeptness at operating the cash register. And since the vast majority of concession stand workers are high school and college students, you might think that high employee turnover would be part of the normal cost of doing business.

More on this in a bit, but beliefs such as these highlight the difference between managing talent and employee engagement through intuition versus analytics.

A soon-to-be-released IBM study based on interviews with 342 chief human resource officers (CHROs) across six continents finds that many businesses are not taking full advantage of the insights delivered by workforce analytics.  As a result, companies are missing out on an opportunity to manage talent and enhance customer value.

The study, part of IBM’s most recent Global C-suite Study, found that just over half of organizations are actively using workforce analytics, with far fewer applying predictive analytics in areas such as workforce productivity (16 percent), talent retention (13 percent), employee engagement and commitment (9 percent) and sourcing and recruiting (7 percent) .  However, those with greater analytic capabilities indicated they were much more likely to be effective in addressing these and other important workforce challenges.

The study goes on to report that the most significant barriers to the use of workforce analytics is a lack of integration among HR systems (55 percent) and between HR systems and other organizational systems (59 percent).  Without the ability to bring together workforce information with other sources of data, such as sales metrics or customer satisfaction, it is difficult to develop insights that connect workforce actions to outcomes

Getting back to the popcorn example, AMC Entertainment used workforce analytics to identify traits such as social sophistication, initiative and integrity as the best predictors for good concession workers.

This was a big surprise – and very important, as the concession stand drives a big chunk of a movie theater chain’s profit.  AMC factored the findings into its hiring process, looking for the desired traits through an online behavioral assessment.

The results have been dramatic. Despite the fact that concessions are staffed mostly high school and college students, employee turnover is down almost 50 percent.  AMC had 1.2 million applicants, compared to a just quarter of that four years earlier. Top-performing managers delivered an additional six figures in concession revenue to the bottom line.

Taking an analytic approach to managing the workforce can make a difference to the bottom line across a wide range of organizations.  We look forward to sharing more insights in our forthcoming report.

The complete study will be issued on February 20th.  To see it, go to http://www.ibm.com/csuitestudy
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[…] to an upcoming IBM C-Suite study that surveyed 342 CHROs representing 18 industries, many businesses are not taking full advantage […]


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