IBM Software Business Analytics

Human Capital Management for Government

Strategic workforce management using predictive analytics

How government agencies can reduce costs, increase productivity and improve services
People are the most important asset in almost any public agency. But finding the right people and keeping them is challenging. By some estimates, the cost of personnel turnover can be up to 150 percent of the employees remuneration package. And workforce costs represent on average 75 percent of an agencys budget!

Predictive analytics empowers government agencies in:

Recruitment of new talent Managing personnel turnover Managing career planning and succession planning

Finding and retaining the right people

Whether its a large city with complex staffing needs, or state agency having to quickly staff a newly approved program, finding people with the right skill sets has become a critical issue for most agencies. Adding to the challenge is the fact that large numbers of federal, state and local employees are reaching retirement age. These retiring baby boomers are leaving behind a labor shortage and creating a higher demand for programs such as Social Security, Medicare and other social services. In an IBM survey of more than 400 human resource executives from 40 countries, 40 percent of public sector respondents indicate that attracting key employees is a significant challenge (see Figure 1). One HR leader at a government agency remarks, Staff turnover is increasing largely driven by an aging workforce [retirements] and increasing skill scarcity in the market. Agencies encounter many obstacles in evaluating potential or current employees. Some of these have to do with internal information systems, which are often siloed and sometimes incompatible with each other. Other obstacles have to do with mindset. For instance, human resource analysts are typically called upon to justify past actions to provide metrics showing that past hiring decisions were a good value for the organizations budget. Sometimes this makes offices reluctant to take a more forward-looking approach to analysis.

Predictive analytics can make a powerful contribution to an agencys commitment to better serve citizens.

IBM Software Business Analytics

Human Capital Management for Government

Financial services Public Industrial Distribution Communications 0 10 20 30 40 50

(Percent)

Figure 1: Inability to attract qualified candidates by sector. Source: IBM Global Human Capital Study 2008

Taking the predictive approach to human capital management

In spite of this inclination toward relying on a backward-looking use of analysis, many agencies are now taking a predictive approach to human capital management. Taking this proactive, predictive approach can help an agency mitigate the risk of losing valuable skills as more experienced people retire. It can also help agencies acquire new people with different skills to support the next generation of government.

Using data analysis for workforce decisions

Another key shift is the move from a more qualitative approach to a more analytical approach, with human resource practitioners using a data-driven, fact-based approach to problem identification and resolution. But many times agencies cannot easily pull data together from across the organization to provide meaningful analysis. The IBM Global Human Capital Study (see Figure 2) concluded that organizations with poorly integrated HR systems are significantly less likely to effectively use data to make workforce decisions. If agencies dont feel the data they have at their disposal is complete or accurate, they cannot use it to make human capital decisions. At the same time, if the data exists but is too difficult to access or integrate, it will not be used. This is reflected in the sobering comments of one postal executive who states, We currently have 42 different HR systems in place, making it hard for managers to readily access aggregated data across business silos.

IBM Software Business Analytics

Human Capital Management for Government

Human capital systems are poorly integrated Human capital systems are not well integrated with other organizational systems (e.g., nancial, sales) Metrics are not well dened Inability to extract information from our HR systems HR personnel have lack of experience analyzing data in order to make decisions Quality level of human capital data is suspect Managers unwilling to access information HR personnel not oriented toward using data in decision making Lack of executive level support 0 10 20 30 40 50 (Percent)

Figure 2: Which barriers are most likely to prevent your organization from using human capital data and information to make workforce
decisions? Source: IBM Global Human Capital Study 2008

Predictive analytics: the new way to approach human capital management

An important technology accelerating these trends is predictive analytics. Predictive analytics allows human resource analysts to easily tap into a wealth of data, regardless of where that data sits or what form it is in. It also provides capabilities to augment operational data with employee attitudes and opinions, captured through surveys. And by applying modeling and statistical techniques, human resources staff can start uncovering the factors and the inter-relationships between factors and improve outcomes in areas such as employee recruiting and retention, career and succession planning and many more.

Recruitment of new talent

Traditionally, recruiting has relied heavily on the experience of the individual recruiter in determining the viability and likely success of a potential recruit. Increasingly, though, the volume of potential recruits or the intricacies of a specific job requirement can overwhelm the efforts of even the best individual recruiter. Through the use of statistical analysis and predictive analytics, an agency can successfully apply the experience and intuition of expert recruiters in creating a model that helps an organization to prioritize and target the individuals most qualified for a specific position. Recruiting then becomes a less costly process that gives higher returns. For example, one of the branches of the U.S. military is responsible for getting more than 100,000 new recruits every year under contract. In order to achieve this goal, the recruiting command must target the right group of people through a variety of marketing campaigns, public speaking engagements and personal interviews. These efforts deliver approximately 600,000 leads that must then be prioritized and sent to individual recruiters. Using predictive models, the branch can prioritize
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IBM Software Business Analytics

Human Capital Management for Government

which leads to follow up on resulting in more enlistments. Previously, without a system to prioritize recruitment leads, only four leads contracted out of every 100 replies received. Using these predictive models, the recruiters were able to target 20 leads to get two to three to contract significantly increasing their conversion rate. Predictive analytics can also help an agency recruitment operation determine which type of employment offer will be the most successful based on a number of factors, including the prospective employees expressed values and attitudes. The process can help human resource managers target benefits packages, recruitment bonuses, travel-to-firstduty compensation and/or above-minimum starting salary.

Managing personnel turnover

When considering the price of voluntary attrition, especially in high value jobs, lost talent can have far-reaching consequences. By employing predictive analytics, organizations can proactively identify high value personnel who are at risk of leaving. They can also predict staff shortfalls and resource gaps and proactively plan for any shortages. Predictive analytics can also help prevent the loss of good people by analyzing whats most important to them and how their career growth and development can be improved. Managers can better understand what incentives and work environment issues are most important for workforce retention. Using predictive analytics, managers can create models that predict attrition based on employee survey and interview analyses. They can also discover what types of incentives will persuade employees to stay and which of these are the most economical for the agency to offer. For instance, one government agency was interested in uncovering the factors that lead to attrition in its personnel. In examining the data using predictive models, the agency was able to uncover which combination of factors was most predictive of attrition. With this information, management could not only intelligently target those individuals that were most likely to attrite, but could also work towards addressing the conditions that might cause dissatisfaction among its staff. The data fed into predictive models does not have to be confined to structured data, such as demographic information, test scores or multiple choice surveys. Predictive analytic solutions enable you to include unstructured data, such as open-ended employee satisfaction surveys. Text analytics extracts usable knowledge from unstructured text data through identification of core concepts and sentiments.Users can quickly understand the relationships between concepts and the sentiment around concepts ultimately creating a structure for unstructured text data that can be integrated with the larger analysis.

IBM Software Business Analytics

Human Capital Management for Government

How agencies use predictive analytics

In its recruiting, one branch of the U.S. military builds predictive models to predict who is most likely to enlist. The branch can then prioritize which leads to follow up on more quickly. Previously, only four leads contracted out of every 100 replies received. Using predictive models, the recruiters were able to target 20 leads to get two to three to contract significantly increasing their conversion rate.

Managing career planning and succession planning

Once someone has joined your organization, employee growth and development can also be improved through predictive analytics. With a closer look at the data, human resource practitioners can begin to understand what drives employee growth. An agency can use what it learns to develop the right training and development initiatives and to make sure they match the right employee with the program that will be most helpful to them. An agency can use predictive analytics to model best practices and create knowledge centers ensuring that everyone on its staff has the best chance possible at a successful career. It allows human resource managers to develop strategic retention strategies that include meaningful work assignments maximizing unique skills and knowledge and opportunities for increased responsibility. Managers can also advise and prepare employees for the career path for which they are best suited. This is because the process allows leaders to look at employee characteristics in combination with demonstrated skills, aptitudes and expressed goals. For instance, one U.S. military command center is employing predictive analytics for career planning as it prepares recruits for the Armed Forces. The center uses predictive models to determine sets of predictor variables that are likely to be the best indicators of success. Using information gathered from physical tests, standardized aptitude tests and medical tests also helps the center to better place applicants in the type of career path best suited for their skills and interests.

A revolution in human capital management

The application of predictive technologies can revolutionize how human capital is managed. By using predictive analytics to examine the wealth of data that is typically available to human resource departments, organizations can find those hidden patterns and relationships within the data and provide a view into the future. Predictive analytics can make a powerful contribution to an agencys commitment to better serve citizens. And it can help mitigate the risk of losing valuable skills as more experienced personnel retire. Research has shown that workforce measurement and analytics can substantially improve the effectiveness of program delivery ultimately improving efforts to serve citizens. To learn more about how predictive analytics can help your agency, contact your IBM SPSS account representative or your local office.

IBM Software Business Analytics

Human Capital Management for Government

IBM SPSS products for human capital management

IBM offers a broad range of IBM SPSS products that can assist your agency in understanding peoples views, opinions and aspirations and then predicting their likelihood to exhibit certain behaviors. IBM SPSS predictive analytics solutions for human capital management are based on the following technologies: IBM SPSS Data Collection helps agencies to quickly develop surveys (e.g., exit interviews, employee satisfaction surveys, training assessments) and analyze results in a secure environment. Surveys can be conducted online, by paper, in person or using multiple methods, giving employees better opportunities to provide feedback. Data, surveys and access to the survey platform are centralized and secure. This centralized approach enables human resource managers to enforce standards for data collection, establish benchmarks and track changes using a single system for multiple feedback programs. IBM SPSS Statistics helps you drive confidence in your results and decisions. Gut feeling and instinct are only as good as the experiences brought to the table. Statistics will make you confident in the results and final outcomes of decisions you make. Using IBM SPSS Statistics, a human resources analyst can, for example, look at how employee performance differs between departments and assess any statistical deviations. Or an analyst can examine how different groups reacted to a program and by applying the wealth of statistical tests that IBM SPSS Statistics contains get an accurate, fact-based view into those differences. IBM SPSS Statistics helps arm the human resource practitioners with the fact-based results that the organization demands. IBM SPSS Modeler enables human resource managers to combine collected data with existing employee information from sources across the agency, including flat files, databases and all formats of text and open source web data (such as blogs, emails and open-ended response questions on surveys). This unique capability enables human resource managers to identify patterns, trends and anomalies in order to forecast the need for skill sets, identify ideal applicants, retain employees who are likely to leave and optimize career and succession planning. IBM SPSS Decision Management lets you integrate predictive power into your agency processes and systems, helping you acquire, grow and retain talent by leveraging the predictive intelligence in real time. IBM SPSS Decision Management offers agencies the ability to move beyond reactive decisions to anticipate which actions are most likely to create successful outcomes in the future. As a closed-loop system that continually incorporates valuable feedback into the decision-making process, its an ideal approach for organizations that wish to react instantly to changing conditions and maximize the benefit of every decision.

IBM Software Business Analytics

Human Capital Management for Government

About IBM Business Analytics

IBM Business Analytics software delivers complete, consistent and accurate information that decision-makers trust to improve business performance. A comprehensive portfolio of business intelligence, predictive analytics, financial performance and strategy management, and analytic applications provides clear, immediate and actionable insights into current performance and the ability to predict future outcomes. Combined with rich industry solutions, proven practices and professional services, organizations of every size can drive the highest productivity, confidently automate decisions and deliver better results. As part of this portfolio, IBM SPSS Predictive Analytics software helps organizations predict future events and proactively act upon that insight to drive better business outcomes. Commercial, government and academic customers worldwide rely on IBM SPSS technology as a competitive advantage in attracting, retaining and growing customers, while reducing fraud and mitigating risk. By incorporating IBM SPSS software into their daily operations, organizations become predictive enterprises able to direct and automate decisions to meet business goals and achieve measurable competitive advantage. For further information or to reach a representative visit www.ibm.com/spss.

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