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ADP to offer predictive analytics tool for flight risk of workers

ADP will compete with Workday and Ultimate Software when it provides cloud software in the fall to help organizations determine if top performers are at risk of leaving their jobs.

Equipped with a large store of comparative data it believes will give it an edge over rivals, ADP plans to release...

a predictive analytics tool that can detect if top employees are at risk of leaving their jobs.

Marc Rind, chief data scientist and vice president of product development at ADP, based in Roseland, N.J., said in order to determine flight risk, the cloud-based tool will draw on aggregated and anonymous data from employees at 75,000 U.S. businesses. For example, one out of every six workers in the U.S. receives a payroll check from ADP.

"That is our great differentiator," he said.

He also cited ADP's longtime expertise in providing a suite of human capital management (HCM) software and its ability to work with HR professionals to assure they can use what the vendor is building.

ADP used the data to build accurate machine learning algorithms in the predictive analytics tool, he said.

Workday and the Ultimate Software each offer a predictive analytics tool for determining risk of someone quitting their job. Cornerstone OnDemand also plans to release software that can predict flight risk as part of Cornerstone Insights. Oracle said it has analytics software that can identify workers who are flight risks, and SAP touts the function as part of SuccessFactors Workforce Analytics.

Hewlett Packard Enterprise and Accenture pioneers in flight risk

Such software has been around for years, according to Hyoun Park, chief research officer at Blue Hill Research in Boston.

Systems integrators and consultant firms, such as Hewlett Packard Enterprise and Accenture, started the trend of building custom-built predictive analytics to calculate talent flight risk, he said. Another pioneer for this area of predictive analytics was Talent Analytics Corp., in Cambridge, Mass., which has partnered with SAP. But, in general, the larger HR software companies have only turned their attention to predictive flight risk over the last three to four years, he said.

One Workday predictive analytics tool can flag whether top performers are at risk of leaving and also provide prescriptive actions similar to the way Netflix would recommend a movie. The software can identify patterns of success with promotions and might recommend a promotion for a valued worker.

In an update this year, Workday also provided a predictive analytics tool to help in collection of outstanding receivables. The software assigns a risk score to invoices to help forecast whether they will be paid on time, helping collections personnel to prioritize their time, because they know which invoices are most at risk.

"Workday has done a very good job of providing predictive analytics that go across HR and finance to provide greater visibility into what is happening in your organization," Park said. "Predictive analytics tend to provide greater business value overall when used correctly and across departments as Workday is doing."

ADP data will help in catch-up

ADP's predictive analytics tool for flight risk may be a little late to market in some ways, but its software still will be significant because of the vendor's data, Park said.

Because its data will allow ADP to dig deeply into more workforce metrics and specific categories of companies based on sales and head count or geography, ADP's predictive analytics tool may be more effective than competitors with more general models, Park said.

Park said ADP's tool could be particularly valuable for highly paid people with rare skills, such as data scientists, highly paid developers, business strategists with specific expertise and C-level executives.

Salary or other standard reasons, such as distance from work, may not be so important when those people are at risk of quitting, he said. ADP's tool may be able to root out other possible reasons, such as the company's mission, the type of work or the individual's colleagues, Park said.

"ADP is different in that it is probably taking into account specific data that only ADP has or has in greater capacity than others with predictive analytics," Park said.

Software set for fall release

The ADP software is being released in the U.S. this fall as part of the ADP DataCloud analytics platform in ADP Vantage HCM for large enterprises, which includes 1,000 or more employees, ADP Workforce Now for midsize organizations of 50 to 999 employees and ADP Enterprise clients. The software is being piloted now among these users.

The DataCloud also includes a benchmarking platform that allows HR professionals to compare their company data with industry averages in areas such as compensation, turnover and workforce metrics.

Some factors that could influence flight risk include salary compared to others doing the same job,  commute distance, tenure in the organization and time in role, raises and bonuses compared to peers and the keeping up with the Joneses effect, or pay relative to where someone lives.

"Those are the some of the big factors currently," Rind said. "We just see this growing and continuing to evolve going forward."

There are a lot of predictive functions in the pipeline, and ADP is just beginning to scratch the surface on which ones will be most helpful to users in HR, he said.

ADP has been working on the flight risk software for more than a year and discovered it is no small feat to identify those who are likely to quit their jobs, Rind said.

ADP wants to help HR leaders discover if they have a problem, where and why it exists, and what could potentially be done about it.

The software will look at a manager's team and use color coding to separate employees with low and high flight risk. Supporting information from the HCM suite will include people who have left, people who are high performers and their tenure in their roles.

"All this information will be on one page and will help HR professionals and managers make decisions and changes to keep the folks they need," Rind said.

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What does your organization use to predict flight risk?
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When I think of employee turnover, I look at it in two ways: Individual Employee and Company Employees. Some companies are notorious for high turnover and some employees cannot seem to keep a job. Since the companies with a high attrition rate know it themselves, I do not see a value in this for them. They know they have a problem and refuse to fix it.

From an HR standpoint when I see a resume with what seems like job hopping, I can see a log of benefit of flight risk analysis. Is it the potential employee or has he/she just been hitting those companies that do not retain staff.

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Past experience is a huge indicator, of course, both for employees fearful of quick turnover and companies hoping to stem the exodus from their ranks. When employees ankle our company (in the jargon of Variety), whatever the reason, we view it as our problem and work to prevent it from happening again. Sometimes we fail but we succeed more often than that. Instead of trying to "predict" how employees might act, we communicate directly with them and we listen far more than we talk. We work hard to make every job as involving and enticing and creative as possible. When the work is good, when the workers are respected, there's little reason for anyone to leave.
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CharlieBrowne - Good points. I think this software is mostly for big organizations. Workday sounds like it has an interesting tool for top managers.
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ncberns - There you go again. Just talking common sense.
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Ultimate Software and Workday offer not only Predictive Analytics but Prescriptive - offering managers with recommended remedial actions. ADP is way behind the 8-ball here and trying to catch leveling their repository of shared-client data as a differentiation.   However, the HCM vendors are making a lot more of this than it needs to be. Big data and special algorithms aren't really needed here.

It's all about three things:
1. Some basic reporting
2. Real employee engagement
3. Companies taking ownership of their Talent as a corporate asset - not leaving the rise and fall of careers up to the safeguard of individual managers and departments.

For a best practice suggestion, create a report that tracks when the last time employees got promotion, their last pay raise and bonus, their last role and responsibility change, and compare those to averages.

Then, ensure managers have a regular conversation with employees to understand how engaged they are, when they think they are ready for their need role change, and to ensure they are being challenged or if they need to find a new role internally.

And lastly, corporate HR or Talent needs to oversee the process. You cannot let an individual department or manager solely control the career pathing of individuals that might have broader value to the organization.

It needs to start with the people and processes, commitment to those processes, and only then, it's nice to have some metrics to support that. Predictive Analytics by themselves won't solve that for you.

(To be noted: ADP as a company has a history of miserably managing their own internal Talent -
so its interesting to see them trying to advise their clients on how to do!)

 

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AlanBNJ - Thanks for the comment and the analysis. It will be interesting to see how these predictive tools play out in the years ahead.
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