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Amazon and analytics in the Cloud

The New York Times just had an interesting article on if Amazon is going to offer analytics in the Cloud.

I think the question is not if, but when.  The value created by analytics is far greater than that of putting computing power in the cloud.  Analytics can be used to find powerful correlations and give a much deeper level of insight to business managers as they try to make better decisions. That sounds great, right?

But it’s so vague, so squishy, so cloud-like.  Perhaps what I’m concerned about is best evinced in the quote by Kyle McNabb, a vice president at research firm Forrester. “They could . . . possibly offer to match your data to other large data sets and find something useful.”

Possibly find something useful?  That’s not the kind of thing you take to your boss with a purchase order.

I’ve seen this before. I went to a presentation by a leading analytics firm a few months ago, and the presenter/salesman said they often found “amazing things” when they looked at data.  A question from the audience was if he could give an example of a business outcome tied back to these amazing things.  He couldn’t. He said they were working at the “strategic” level, and removed from operations.

At Evolv, our focus is on finding things that are both amazing and useful.  We support data driven workforce selection: using performance data to determine which candidates will make the best hires. We’re delivering 10% to 15% improvements to productivity combined with reductions in attrition of 30% or more.

All employers know that the top performers are radically more productive than the bottom performers. Evolv employers also know who is more likely to fall into that top rank before they hire them.

A challenge I see with analytics and big data is that it’s very expensive.  It can be hard to build the business case for amazing things.

At Evolv, we know recruiting analytics and hourly hiring intimately.  We have deep expertise on the business of our clients, and know what drives their profitability.  We use that expertise to drive better outcomes.  Our focus allows us to do so in a cost effective manner.  The amazement we deliver is when we quantify the savings we deliver and show the quality improvements our process allows.

I’m very optimistic about the future of Analytics in the Cloud.  I think the driving force for it will be focused, vertical solutions by providers that can optimize specific business functions where the impact is very valuable.  Evolv is one of those.

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Screening out people who are too smart?

There’s been a lot of snark about the recent court decision that says being too smart is a reason to NOT hire someone.  Apparently, Robert Jordan is too smart to be a policeman.  (Read about it here.)

On the  one hand, there’s nothing surprising here.  The idea of being overqualified for a job is old hat.  The logic is that the person will get bored, start bucking for a promotion, or quit as soon as something better comes along.  When a hiring manager extends an offer, they’ll want to know that the person is going to stick around and do the job happily.  Turnover is expensive and disruptive. Our analysis is that for call center workers, the cost of someone leaving is easily thousands of dollars.

Additionally, using assessments to predict performance has been shown again and again, by Evolv and others, to be far more accurate than interviews. You want the best workforce, don’t you?

So, as someone who has seen how effective these tests can be at building a better workforce, I’d normally be all in favor of this.

But I’m not.

The problem is that for most jobs, there are different paths for management and the rank and file.  It’s highly unlikely that someone working the phones in the call center or doing the night shift at a gas station is actually on a career path to become the CEO.

In police work, it’s the opposite.  Even the Police Commissioner of New York started as a beat cop.  Same with the Chiefs of Police in San Francisco, Los Angeles, Chicago, Dallas . . . . You get the picture.  By capping the IQ of the people at the bottom, “because they’ll get bored,” they’re deciding to cap the IQ of the people at the top, because you have to have experience to get there.   I don’t know much about police work and managing police forces.  But I’d guess that being smarter would be better for managing a department.

The solution might be to do what a lot of large employers do to attract the best and the brightest: have management rotation programs.  Tell would be cops that if they want to be on a management track, they need to do rotations around the department for several years. This way, you’ll get smart, motivated people looking at all different aspects of police work.  And you’ll be able to hire people who score high on IQ tests.

In the meantime, hopefully those managing police screening will think about the implications of screening out smart people.   That is, if they’re smart enough.

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More on Acquisitions: SuccessFactors and Jobs2Web

With all the coverage of SuccessFactors being bought by SAP, some people may have missed the news that SuccessFactors bought Jobs2Web.  Spending $110 million for a company that did about $10 million in revenue in 2010, SuccessFactors was making a pretty big bet on analytics.

I think this is good news for HR.

Described as the Marketo of recruiting by Brian Sommers, Jobs2Web is a jobs distribution platform that pushes jobs to dozens or hundreds of job boards and other sites, and helps recruiters build “talent communities.”  But a lot of companies do that.  When I saw Jobs2Web at HRTech last year, the thing that impressed me most was their analytics: the ability to show exactly where candidates are coming from, how much they cost and how many get hired.

Recruiting analytics is a critical function that many companies skip altogether, or do so poorly that they might as well skip it. The challenge is getting good data into the platform, and then knowing how to turn that data into real insight.  The fact that Lars saw recruiting analytics as an investment worth $110 million shows something we at Evolv see as well: there is an increasing awareness from HR leaders that data driven HR is the goal they need to be moving towards.  I believe data driven workforce selection is the most important aspect of that because quality of hire drives pretty much everything else a company does over the long term.

Evolv’s customers are already seeing the benefits of deep recruiting analytics. By tying analytics not just to the advertising spend, but the assessment, hiring process, and post hire performance, we’re giving them outsized returns on their entire recruiting process.  We’re also showing them, in real time, how the quality of their workforce selectivity ties directly to the productivity of their workforce.

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Salesforce, SuccessForce, SuccessFactors and What’s Changing with HCM

SAP’s acquisition of SuccessFactors certainly reminded a lot of people up about the strategic value in human capital management.  SuccessFactors went out for more than 10 times expected revenue for this year.   (And if you haven’t seen the hilarious video of Lars telling Bloomberg TV about “frying the shorts,” check him out at minute 1:30.)

Getting less press, but more interesting to me, is Salesforce buying Rypple.  Called “bold” by the Wall Street Journal, this purchase apparently “gives it an edge on rivals such as Taleo and SuccessFactors.”

Hold the horses!  Salesforce.com is a rival with Taleo and SuccessFactors?  You probably didn’t see that coming.  After all, even though Salesforce made a lot of noise about their ATS at Dreamforce in 2006, they haven’t really taken off in that space.

Still, it raises the question of why Salesforce wants to be in performance management. One possible answer ties into a trend we’re seeing at Evolv.

Here’s the trend Salesforce might be betting on:

Historically, performance management tools have been owned and managed by the HR organization.  Everyone else sees them once a year as part of annual reviews.

HR says performance management is everyone’s responsibility.  But people outside HR have other priorities, like managing their teams.  If there wasn’t a system built to enforce performance management, it wouldn’t get done.  In fact, compliance and enforcement have been a big part of the pitch on these tools.

But if performance management tools actually delivered on the promise of improving performance, then wouldn’t people want to use them?  Think about it. You’re a sales manager. Your income is determined by the performance of the people working for you.  They sell more, you make more. If someone actually had a tool that would make you more money, you’d be all in.

Evidently Salesforce believes a performance management tool like Rypple can deliver.  They’ll do very well if they can convince sales leaders of that.

Back to the trend we’re seeing. Evolv is seeing a similar thing with recruiting.

Historically, recruiting has been owned by HR.  The key metric for high volume hiring has been fill rates.  Quality of hire would be an important metric if it could just me measured.  In call centers, quality of hire has tremendous implications.  Hitting the fill rate with bad people is disastrous. Bad hires cause high attrition, poor customer service and low productivity. They cost thousands of dollars apiece.

Operational managers’ bonuses are based on quality and productivity targets, which are in turn extremely dependent on quality of hire. If only they could measure it, they’d be all over it.

Lately, we’ve noticed operational managers getting more and more interested in recruiting. Why the change? Because with the new analytics technology, like Evolv, they can actually see quality of hire and measure the recruiting process as an operational input.  In other words, they can track the direct connection between recruiting and their bonuses.  And just like that, recruiting has become as important to them as any other initiative they may be running.

So, we see operational managers getting interested in recruiting.  Salesforce sees sales managers getting interested in performance management.

This is could be great news for HR. HR Executives claimed that HR really is strategic, and that HR should “have a seat at the table.” Now, we’re seeing our clients and prospects agreeing with this view. And Salesforce even wants to be a performance management company.  The good news is that HR might finally get their seat at the table.

The bad news is that if HR leaders don’t take that seat and deliver, functions like performance management and recruiting may actually get moved into other departments.  It will be interesting to see if Salesforce starts calling on HR managers to sell SuccessForce, or if they position the value to their current customers in the Sales, Marketing, and Customer Support functions.

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With 10 ways to improve Call Centers, Better Hiring is Job #1

Leonard Klie wrote a great article about how contact centers can improve.  The first thing on his list: fix the hiring process.  He makes a strong case that the call centers need to focus on hiring the right person for the job.

He doesn’t mention Evolv specifically, but he does say “. . .the (hiring) system should be paired with performance management tools to track the success of the people who are ultimately hired, identify common traits among them, and recycle those characteristics back into the hiring solution to seek them in the next round of hiring.”

That’s exactly what we say!

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The Israeli Army, Predicting Performance, and Confidence vs. Data

You might think that the Psychology Branch of the Israeli Army would have developed some pretty good tests for evaluating officer material.

After all, these are trained psychologists, with tons of money and time. Who becomes an officer is a matter of life or death. How to select officers has likely been studied in the military since prehistory. And this is the Israeli Army.

But if you thought that expert psychologists would spot the best candidates, you’d be wrong.

It turns out that human biases, using the wrong criteria, and asking the wrong questions leads to results that were “were better than blind guesses, but not by much.” You can read the article here.

We see the same thing in recruiting all the time.  People believe they’re good at interviewing and that they can determine who will shine and who will fail. They believe they have a scientific approach that will eliminate error and produce optimal results.  And often, they’re wrong.

People have a natural bias towards confidence. They believe in themselves, and what they can see and understand. Sometimes they’re confident for absolutely no reason, or even confident despite all the evidence against them.

Data is incredibly powerful because it can cut through biases, hunches, and incorrect reasoning.  Data driven processes can deliver results that opinion based processes simply cannot.

Evolv’s vision is to provide employers with confidence rooted in data. We want employers to know there is a meaningful correlation between the outcomes they want from their workforce, and the decision criteria they use when hiring.

We’re delivering on that vision with data driven workforce selection.  And the great news is that we have the data to show that our approach is delivering tremendous value, with higher performing workforces and significantly lower attrition.

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A Dozen Things the HR Technology Market Needs in 2011

Article

What #1 for HR technology in 2011? Data, data, data…but what good is it if you don’t have the right measurement and analysis to drive actionable results? Better HR technology means providing the insight into workforces that enables leaders to identify key skills and make changes to hire and retain top talent.

Read the full post from Bersin

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Predicting Retention

Article

What can you do with technology in HR?

Quite a lot as Laszlo Bock, VP of HR at Google, has proven. By applying science and analytics to the talent management process, Bock has created a streamlined system that not only identifies the best talent to hire, but is able to predict retention.

Read the full article from Human Resource Executive Online

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Managing Talent Should Work Like Pandora

Article

Managing talent should be more like Pandora? We couldn’t agree more!

Through the use of increasingly sophisticated measurements and analytics, executives are gaining actionable insight regarding key trends and opportunities amongst their workforces and are able to implement meaningful changes within their organizations. The key industry leaders will continue to be those that make the investment in understanding what constitutes success within their workforce, and thus their overall business, through the use of talent analytics.

Read the full post from Fistful of Talent

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Building a New Breed

Article

New Evolv On-Demand board member and HR Executive of the Year, Laszlo Bock, introduced game changing metrics and analysis to Google’s talent management. His achievements at Google have landed the company on numerous Best Places to Work lists and opened the industry’s eyes to a new and more effective way of recruiting, hiring and retaining the best talent.

Read the full article from Human Resources Executive

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