How To Use People Analytics To Impact Company Culture

Data doesn’t lie.

Within the last year, Deloitte found that 56% more companies are correlating people data to business performance, and 50% more are using people data to predict business performance. Clearly, using people analytics to impact company culture seems like a no-brainer.

If data is the key, then what data do you need as a people professional, to be effective at shaping the culture at your organization? That’s what this post is all about.

We’ll take you through the people metrics you can analyze, interpret and action to make a real difference. Let’s get started.

Metric #1: Employee Turnover Rates

As you’d know, employee turnover refers to the number of employees you need to replace or re-hire due to people resigning or being separated from your company.

The ‘formula’ to calculate the ‘employee turnover rate’ is to divide the number of people who’ve been separated from your company by the ‘average’ number of employees during a specific measurement period.

So for example, if there were 20 employees at the start of your measurement period, and 30 at the end, your average number of employees is 25. If 5 employees quit their jobs during this period, your total employee turnover is 5/25 = 0.2 or 20%. Expressing this metric as a percentage provides a more insightful perspective.

How Do You Use It To Improve Culture?

The higher your employee turnover rate is, the more employees you need to re-hire. This means higher recruitment costs, which can eat into your profitability.

You can use this data to figure out what’s causing your turnover rates to be high. Is it a lack of training and support given to your employees? Or perhaps dirty politics that are ruining your work culture? The numbers need to be followed up by an in-depth investigation into the facts that lead up to it!

If you discover the real cause of the issue, you can keep recruitment costs in check, improve overall profitability, and maybe even improve your chances of being nominated for a ‘best place to work’ award!

Metric #2: Interviews Per Hire Ratio

This metric, as the name suggests, is the number of interviews you conduct to employ 1 person at your company. So for example, if you conduct 10 interviews to hire 1 person at your company, the ‘Interviews Per Hire Ratio’ is 10.

How Do You Use It To Improve Culture?

The interview to hire ratio is an important one to measure the return on your recruitment marketing investment. If the ratio starts to increase beyond the industry average, you need to ask your hiring team the following questions:

What’s causing the delay in hiring the right candidates?
Which roles are taking longer/more interviews to fill and why?
At what stage of the recruitment process are the number of interviews rising?
Do you have a process in place to determine ‘culture fit’ during these interviews?

Answering these questions will provide you deeper insights on how you can get the number of interviews you conduct in check. The goal is to make your hiring as efficient as possible, in a way that you make absolutely no compromises on ‘hiring for culture’.

As Todd Raphael, editor in chief at ERE.net says “Hiring for cultural fit above skills is a great idea because you never know how much an employee will be developing, growing and changing over time — they could be in a completely different role by next year.”

Use this data to make the best hiring decisions that are in line with your culture, because you can always train employees for developing their skill sets in the future. You’ll never go wrong with this approach!

Metric #3: Number Of ‘Recognitions’ Given

In the context of employee recognition and using a platform like Redii, measuring the number, and quality of appreciations/recognition given to employees is key to improving your company culture. Measuring the number of ‘thank you notes’ sent, or ‘high fives’ given, or ‘appreciation notes/compliments’ given are things you should monitor as a culture change evangelist.

Within the Redii platform, we have something we call the ‘recognition wall’ which allows employees to openly appreciate one another online. Have a look below at what a ‘thank you’ recognition looks like:

And here’s what a ‘compliment recognition looks like:

How Do You Use It To Improve Culture?

Using this information, you can begin to see employee recognition as a ‘trend’ at your workplace. If engagement on the platform is rising, that’s a clear indicator that your culture is being positively transformed.

Analyse the folks that are using the platform regularly and the ones who are not, and why. Organize one-on-ones with these employees to understand their point of view and take action on the insights you gather to boost overall happiness for your employees.

At the end of the day, it’s all on you.

Data is your friend that doesn’t lie. But how you use it to shape your organisational culture depends on how you interpret it, and what you do about it. Your employees need to know that your culture is a top priority. Empower your decisions with people analytics so your employees understand you’re serious about culture and creating lasting change.

How to Sell Employee Recognition to a Sceptic

The increasing commercial pressures that come with running good businesses often mean that priorities change regularly, with financial and operational issues always demanding the lion’s share of time and energy. When looking to implement an employee reward and recognition program, your challenges are two-fold.

1) to get it on the agenda with senior executives and

2) to make a compelling case in order to engage those stakeholders who are more sceptical about its value.

Your sceptics are often rightly focused on financial & operational goals and are sceptical about the value of employee recognition programs to company goals because they draws their focus away from what they believe are the right priorities. They also often don’t have confidence that such programs will have a real impact on profitability.

On the other hand, 88% of employees working at a company with a values-based employee recognition program report their work experience as positive.

But how do you convince a sceptical HR Director, CEO or metric driven executive at your company that recognition programs can make a real difference to company goals? This post will address some of the doubts sitting in the minds of a sceptic, and how you can address them to get them on board to create a culture that truly drives your business strategy.

Let’s get into it!

Scepticism #1: Employee Recognition and Reward Programs (ERRP’s) Don’t Translate To Profits

Executives are under high pressure to pursue activities that get them runs on the board. Given that employee recognition is about praising employees, recognising good work and being supportive, sceptical executives often view ERRP’s as the ‘softer side’ of people management, having no direct impact on results. It’s not the equivalent of rising sales, or reducing costs, which is the ultimate goal.

How To Address It

You need to educate executives that profits should be the byproduct of a healthy ‘people strategy’, rather than making it the goal itself.

In a recent survey where workers were asked why they stay at their company, more than 32% responded that they stay because they ‘find the work meaningful’. In a global workforce where nearly 50% of employees are millennials, it would be a blunder to ignore this statistic in the context of controlling employee turnover rates. Executives need to be shown just how much money they could save on hiring costs, simply by giving recognition and making work more meaningful for their employees.

Another research study has shown that companies with the most engaged employees show revenue growth that’s 2.5X faster than their competitors with the lowest levels of engagement.
Clearly, having an ERRP in place is key to not only building a great culture but also with strong financial results.

Scepticism #2: Employees Don’t Want Recognition, They Want Higher Salaries

Some executives are of the opinion that good performance should be rewarded with higher salaries and bonuses because that’s what employees really want. So why would an ERRP make any difference to their goals?

How To Address It

You need to understand the questions and concerns your sceptics have. Without understanding what their concerns are in relation to non-financial incentives, how will you address them?
Ask the sceptics, what do they think about non-financial incentives like ERRP’s and why. Then go to your company at large, and ask your employees if they feel the same way?

A survey conducted in 2016 among a 1000 employees revealed that 30% of employees would rather be recognised in a company-wide email than receive a bonus of $500. And within this 30%, over three quarters would only choose the bonus over the recognition if it was greater than $2000. That’s the ‘unspoken’ value of recognition!

Non-financial incentives like employee recognition can provide the much needed intrinsic motivation your employees need to come to work with an upbeat attitude every day. According to Maslow’s hierarchy of needs, esteem is one of our basic needs. Saying a simple ‘thank you’ to your employees when they do great work, giving a pat on the back, sending an email expressing gratitude are all small gestures that cost nothing and make a world of a difference.
Show to your sceptics that there are countless cases of employees quitting their jobs despite having massive compensation packages, all pointing to the importance of the non-financial elements of their work experience.

Scepticism #3: Employees Just Need To Be Directed, Not Appreciated

Some sceptical executives view leadership as directing employees on what they should do and how they should do it. They believe they know what they want, and use employees as ‘resources’ to achieve their vision of the future.

For dictatorial leaders, showing appreciation only makes them look ‘weak’ rather than people who need to be ‘feared’. They have a preset agenda, and a vision, and don’t have the time for social courtesies like saying ‘thank you’. For them, an ERRP is a waste of time and money!

How To Address It

Gone are the days when top executives were ‘tyrants’ running an organization like they knew exactly how things must be done. Today’s modern workplace has a flatter management structure, with employees at all levels bringing in a fresh pair of eyes and new perspectives.
If such ideas are not valued, executives will end up crushing the spirit of innovation that’s needed for growth.

Executives need to be explained that they need to encourage employees to speak up, share their ideas and contribute because the modern day workplace is not about power, it’s about ideas, and anyone can have ideas. This can only happen when executives appreciate their employees.

Giving executives information about how organizations are no longer hierarchical and top-down, and more collaborative and bottom-up and why this is so will hopefully open their eyes to new possibilities.

Wrapping It Up

Using a combination of persuasive communication, and data, you have the power to influence sceptical executives about just how beneficial ERRP’s can be for your company. Don’t forget that employee recognition is a need, and not a want, and ignoring the importance of an ERRP will defeat the very purpose of why we come to work. By driving employee engagement through recognition, you become more attractive to today’s modern workforce than companies who just don’t care about their people.

Strategic Employee Recognition

At Redii we help to create extraordinary work cultures using employee recognition. We believe employee recognition is one of the fastest ways to increase employee engagement and impact your attrition rate.

As an example, one of our clients CHOICE, had an attrition rate of 16% at 2014 FY end, today it’s around 7%. When you translate this into dollars saved, you realise the potential growth that your business is missing without a proper employee recognition program.

Strategic employee recognition is a game changer for organisations, let me explain to you why:

When you create awards to set specific goals in your organisation and reward your employees for achieving them you move employee recognition to the next level.

Our client Melbourne Real Estate is a great example. It encouraged all its business development managers to ask all clients they were dealing with, to leave a Google review, of course, stating their name on it and describing the client experience.

Melbourne Real Estate’s objective was to increase awareness and penetration in the market and having a strong presence online was key to make it happen.

They created the Google Review Award and for every review published on Google, the employee received points. What gets recognised gets repeated, so, after a couple of months, they had extraordinary results.

Due to a large number of reviews, now over 400+ their organic presence online drives a lot of leads to the business.
Employees are engaged and motivated to work hard to get that review! Because they get points for each review and they can use the points at the Redii shop and exchange them for holidays, experiences, the latest gadgets or e-cards.
PwC revealed on a survey that innovation (developing new products and services) is the top priority from CEOs across industries and around the world, therefore encouraging innovation through a reward and using strategic recognition helps in three ways:

1. Everyone is clear about the meaning of innovation. There is no misunderstanding about what it means for the company and how the company wants everyone to understand the concept.
2. Rewarding innovation helps organisations to be clear on how important innovative behaviours are for the company.
3. It helps employees to repeat behaviours that show innovation.

Strategic recognition has many benefits when applied the right way. As you can see it can be an interesting avenue for business growth. Redii is here to give you a hand to set up awards to support your employees to behave in a desired way. Let us show you how.