In an exclusive conversation with People Matters, Brett Morris, President & Co-Founder, Perception Recruitment Systems, shares his take on People Analytics as a science and discipline, and how organizations can adopt it to focus on identifying and selecting the “vital few”, the star performers that are proven to have an out-sized contribution to firm performance. Brett brings over 30 years of experience in business and salesforce development, and people analytics.

Q: What is your take on People Analytics and its current adoption in organizations?

A: The Economist released a study in 2016 in which they interviewed 174 Senior UK Managers and asked them – “if you are presented with evidence about something that is counter intuitive to your gut feeling about what action to take to address a particular problem, what would you do?” Only 10% said they will take the action recommended by the data. Humans are incredibly attached to their intuition, and even in the face of compelling evidence, humans will invariably favor their intuition. This is one of the major reasons why People Analytics has more heat than action. 

While some organizations across the globe are doing great work in this field, too many are still not clear on the practical problems they are trying to solve using the ‘art and science’ of people analytics, and hence end up investing resources and energy without making a tangible business impact. Consequently, it is vital to identify what practical business issues you are trying to resolve and what outcomes you want to achieve, and then focus effort on that. Spray and pray without purpose and focus will not cut it.

Evidence from across the world demonstrates that the average failure rate, within 18 months of hire, for all job roles from CEO to blue collar, is 50%.

Q: What is one of the biggest practical challenges that you see organizations facing today that can be solved by people analytics?

A: Evidence from across the world demonstrates that the average failure rate, within 18 months of hire, for all job roles from CEO to blue collar, is 50%. That means 1 out of every 2 hires is a failure! How many corporate processes are out there those consistently fail one out of every two times within 18 months, but that don’t get serious attention and remedial action from boards and senior management? None. Depending upon the job role, the cost of bad hires is huge, running into thousands and millions of dollars, yet organizations remain incapable of focusing on this issue because it’s not measured. The result is a vast and globally pervasive gap between hiring and performance. I’m yet to see a P&L, in any business, anywhere, that includes a granular analysis of the soft, hard and opportunity costs of poor hiring.

The challenge lies in the current inefficiency and inaccuracy of the recruitment process, globally. Hiring is a broken process, and it’s broken across every job level from hourly employees to the executive suite. Whilst recruiters have the right intention, they are forced to be incredibly transaction-driven due to the dynamics of the talent market, high requisition volumes and other pressures. Using this prevailing model, focusing on candidate ‘quality’ and assessing each and every candidate accurately becomes impractical. And yet this is, I think, one of the biggest practical challenges plaguing organizations today: quality-of-hire. In fact, surveys consistently rate quality-of-hire at the top of the ‘most wanted list’ but management practices make it hard to attain.

Q: How is Perception People Analytics trying to solve this challenge?

A: Six years ago, when we started applying talent science to the discipline of solving specific business problems, we identified the hiring/performance gap and subsequent lack of quality-of-hire  intelligence as our most critical use case to focus on. All current recruiting processes rely on assessing skills, experience and fit using, essentially, intuition-based human judgment. And it fails 50% of the time. So, we decided to up-end the process and built a massively scalable ‘attributes-first’ technology platform. The system works through the pre- and post-hire lifecycle to identify those vital few who will have an out-sized contribution to performance in specific job roles. These “vital few” need to be selected, rewarded, engaged, developed and retained differently compared to all other employees. Our system analyses and understands the granular make-up of the “vital few” that drive superior performance; and using reliable and predictive talent science, many different measures assess the likely on-job success of candidates through an intelligent employability index. It’s kind of equivalent to doing 100+ psychometric assessments simultaneously, and then matching that data with on-job performance data to correlate the traits driving role-specific performance, all at scale and instantaneously! 

Our customers are not only HR leaders but also business leaders and line managers whose costs, revenues and customer experiences are directly impacted by the wrong hires. Hence, the critical questions they want answers to from Perception’s application of people analytics are - “Who will perform?”, “Who is going to stick around?”, “Am I hiring the right person for this role?”, “Do I have the right people today in these job roles?”, “Am I investing in developing the right people?”, and “Am I promoting the right person?” These are the practical questions that our analytics answers.

It is critical to identify the “vital” few who are going to have an outsized contribution to performance.

Q: Based on your conversations with leaders across the world, what would your advice be to organizations that are starting or are in the nascent stages of their talent analytics journey?

A: My best advice would be to first find a tough, intractable problem that’s significantly impacting business performance directly; and focus on business performance outcomes and metrics, not HR metrics. Once there’s consensus (important) around the problem and desired outcome, figure out how to solve it using people analytics as a discipline and a process with data, not intuition and opinion, at its core. Clearly, we’re not able to dive into how-to’s here; however, your objective must be to show practical results, and that means using data to find the ‘story’ that’s hidden within the problem and its solution.  Use your success as the foundation to expand the influence of what can be done using the science and disciplines of talent analytics.

Many organizations have invested heavily, and unnecessarily, in tools, systems and people resources before they have real clarity about why they’re doing it. Without a clear reason and problem definition or thinking “we have all this data, there must be something we should be doing with it” is management by hope. Yes, it’s true, data will deliver the answer but do not end up in a scenario where the impact to the business, and the ROI of your project, is a question mark.

In closing, W. Edwards Deming’s quote about the competitive tension between intuition and data is instructive. He said: “In God we trust. The rest of us need to bring data”. Deming, the father of modern quality management, developed the idea that process variation creates inconsistent quality and leads to waste, inefficiency, inaccuracy and excessive costs. These same consequences in global recruitment practices are producing 50% failure rates that need to be addressed with new thinking and different solutions.