By Stephanie Walden, Contributor
For previous generations of workers, it wasn’t uncommon to spend decades at a single company, climbing the corporate ladder from entry-level employee to C-suite executive.
But the median length of time an employee spends at a company today? Just four years. Factors including a competitive talent market, the perception of low employer loyalty, and rigid raise/reward structures have led to unprecedented rates of turnover.
“One in every four people in the United States are employed in environments that are considered high turnover—often in which the entire labor force is replaced each year,” says Vivek Kumar, the founder and CEO of Qlicket, an enterprise software as a service (SaaS) company that uses data systems to improve talent retention.
This churn has detrimental business implications for companies who spend significant resources each year on recruiting—and then quickly replacing—talent. Gallup, which has dubbed millennials the “job-hopping generation,” predicts the trend costs the U.S. economy more than $30 billion a year in turnover-related expenses. These expenditures include direct costs such as paying recruiters to find suitable candidates, as well as human resources (HR) costs related to onboarding, training, and benefits enrollment. In August of 2019, roughly 3 percent of the non-farming U.S. workforce left jobs, resulting in the highest “quit rate” ever recorded by the Bureau of Labor Statistics.
To combat the job-hopping phenomenon, HR teams are turning to technology in the form of “people analytics.” The field is generating a great deal of interest among large corporations and seedling startups alike that are eager to halt the revolving door of top-tier talent.
What Do People Analytics Measure?
People analytics is an umbrella term for tech-infused, data-driven HR initiatives that help managers and executives make decisions about their workforce. And while using data to improve employee satisfaction and retention is far from a radical new idea—employee engagement surveys have been a staple of HR departments for decades—new and more powerful data systems, artificial intelligence (AI), machine learning (ML), and advanced computing have enabled companies to take these efforts to the next level.
To fully realize the potential of people analytics, organizations often rely upon in-house, hybrid data-analysts-turned-HR-professionals, as well as third-party consulting services that help collect, interpret, and distill actionable insights from employee data.
Qlicket, for example, provides companies with kiosks equipped with tablets that employees use to anonymously submit feedback on everything from the daily commute to co-worker dynamics. The kiosks are displayed in “high-traffic areas,” such as near the time clock, in break rooms, or close to restrooms. This physical, tangible prompt for feedback entices workers to voice concerns or express appreciation in real-time, while a complaint or point of praise is still top of mind. “There might be questions, a video, or a fun poll question that workers interact with on screen,” says Kumar, who notes that, on average, Qlicket sees up to 30 percent of a given client’s workforce engaging daily with the platform.
Qlicket’s account managers—data analysts that work with a point person on the client side to interpret survey results—assist with kiosk content and campaign creation. After initial data collection, which may last a few days or weeks and tends to be more generalized, the Qlicket team adjusts feedback campaigns to get granular about the precise factors workers find problematic in their work environments. The final phase is to perform a “deep dive” into how to alleviate employees’ concerns, which often range from the physical demands of the job (heavy lifting, working overtime, difficult commutes) to more nebulous elements of workplace satisfaction (co-worker/manager relationships, work/life balance, perks and rewards structures). Enterprises are given access to a dashboard where they can view the data and resulting analysis.
The Evolved Employee Engagement Survey
Rob Dees, director of data science at Dell Technologies, points out that employee retention isn’t cut and dry—it’s a tangential benefit resulting from a confluence of factors, including employee perceptions of company culture, support, and growth trajectory. “At Dell Technologies, we’re really focused on culture, engagement, and environment to result in an employee experience that will benefit retention,” he says. “[Beyond the notion of job-hopping], our focus is on providing opportunities for career movement: measuring it, understanding how it’s happening, performing analytics. This way, we truly understand the movement in, within, and out of our organization.”
“[Beyond the notion of job-hopping], our focus is on providing opportunities for career movement: measuring it, understanding how it’s happening, performing analytics. This way, we truly understand the movement in, within, and out of our organization.”
—Rob Dees, director of data science, Dell Technologies
One facet of these measurements is the annual Tell Dell employee survey. The digital tool measures employee engagement and satisfaction scores in categories like culture, leadership, etc. Employees can provide feedback on processes and systems they find either useful or cumbersome. The survey also lets users customize feedback via a “choose your own journey” format that adapts based upon what employees most want to address. Previous years’ surveys have led to streamlined onboarding processes, including an instant online chat feature to help new employees learn the ropes and ensure they’ve submitted all required documents.
“We’re trying to make sure that we have great experiences for our team members, which hopefully will aid in our retention and our engagement scores.”
—Barbara Raxter, senior vice president, HR Shared Services, Dell Technologies
“We build all of our analytics and a lot of what we do around our culture code and people philosophy,” says Barbara Raxter, senior vice president of HR Shared Services at Dell Technologies. “We’re trying to make sure that we have great experiences for our team members, which hopefully will aid in our retention and our engagement scores.”
At Unilever, another multinational organization with a massive workforce, HR leaders use data to address niche elements of employee satisfaction, including how happy employees are with their pay structure and benefits.
“We’ve created a digital database of how we actually pay people,” explains Peter Newhouse, Unilever’s global head of reward. “About nine years ago, we started on a journey of setting up a reward management system that actually records all the rules we use to calculate pay. We use it to package employees’ rewards statements, but also to solicit feedback and record how people feel about them. This ‘Rate My Reward’ feature lets us improve the quality of the reward, and also, if we’re giving employees something they don’t value, it lets us know how to evolve our offerings.”
“The more we can offer personalization [in the rewards program], the more engaging it’s going to be for everybody…that can only be served by better technology, analytics, and feedback.”
—Peter Newhouse, global head of reward, Unilever
There are many factors—such as generational differences—that dictate how Unilever doles out workplace perks, salary increases, and healthcare plans. “Everybody values rewards in different ways,” says Newhouse. “It’s important to offer flexibility of rewards including different healthcare benefits, raise structures, etc., on a personalized basis, versus a typical, one-size-fits-all arrangement. The more we can offer personalization, the more engaging it’s going to be for everybody. The dialogue improves. And that can only be served by better technology, analytics, and feedback.”
Combating Turnover Among Hourly Workers
In industries that employ hourly versus salaried workers, employee retention is especially difficult. Jobs at distribution centers, call centers, retail stores, fast food franchises, and in certain healthcare industries often suffer from exceptionally high turnover rates.
“People often leave these roles for factors that could be considered avoidable turnover: management, co-workers, lack of a sense of pride in their work, limited promotional or learning opportunities.”
—Vivek Kumar, founder and CEO, Qlicket
“The assumption’s always been that somebody who’s making $10-15 an hour can easily be replaced,” says Kumar. “But the average all-in cost to replace an employee making $10-15 an hour might be up to $7,000, and [our data has found] the average cost is $3,328.” That number, which Qlicket arrived at by distilling data from sources like the Center for American Progress and the Institute for Research on Labor and Employment, factors in lost productivity. At a distribution center, it might mean employees working overtime, late shipments, and transportation cost increases.
What’s most fascinating, says Kumar, is that Qlicket’s data shows low wages aren’t the primary reason why people quit. “People often leave these roles for factors that could be considered avoidable turnover: management, co-workers, lack of a sense of pride in their work, limited promotional or learning opportunities. … But most of those factors can actually be improved upon without touching the benefit component, so long as wages are at least competitive.”
In one instance, Qlicket dug into findings that suggested warehouse workers were experiencing fatigue from standing on their feet all day. The kiosks posited a few solutions—padded shoe insoles, massage chairs in the break room, lunch-and-learn yoga sessions, or occasional company-sponsored rides to work—and found that employees gravitated toward the idea of Dr. Scholl’s shoe inserts. After introducing the insoles, which cost the company about $10 per worker, employee retention rates jumped from 8 to 25 percent.
Kumar says that there’s often disconnect between what employers believe will make frontline workers happy, and what they actually want. “We’ve found that opportunities for growth and development are one of the most requested things by this segment of worker,” he says. “It doesn’t have to be promotions into supervisor-type roles or increased compensation. Maybe it’s tuition reimbursement for going to community college or trade school. Maybe it’s cross-training within their environment. Or maybe it’s something as simple as wanting to see their manager walk the floor more, shake their hand, and give them recognition for good work.”
Kumar admits that the idea of collecting on-site feedback from employees isn’t exactly revolutionary, but he believes that the data the Qlicket kiosks generate in real-time has significant ROI. And although AI and ML already help Qlicket digest data, uncover patterns, set benchmarks, run regression analyses, and conduct predictive analytics on the back-end, Kumar believes the technologies will play an even more critical role in this feedback loop in the near future, particularly as Qlicket’s data set becomes more robust.
“The real value is to be able to benchmark both internally, as well as across other organizations, and to regress all that data among the key variables from turnover to productivity,” he says. “It’s important to ask the questions, get the user engagement, and relay that all back. But, ultimately, you have to have the ability to do meaningful things with that data.”