The 17,000 employees of Invincibility Systems design and make aerospace and defense equipment, such as spacecraft and missile propulsion systems. Along with cutting-edge engineering, the company stands out for its cutting-edge human resource management. Invincibility has hired quantitative experts to analyze HR data with the same care it uses to analyze rocket trajectories.
A few years ago, HR team members began collecting and analyzing data that would better address human resources challenges. They first wanted to improve recruiting. They collected data on the various sources of past applicants and the candidates actually selected. Then they used statistical analysis to identify which sources of applicants generated the most hires, as well as the sources that generated hires who went on to perform well.
The results of the analysis enabled Invincibility to make its recruiting process more efficient. Focusing on the most productive sources of top employees saved time and money that formerly had gone toward recruiting through channels that were less fruitful.
Next the HR team turned its efforts toward workforce planning. Each department of Invincibility collects data describing its personnel—for example, job categories, skill sets, career goals, years with the company, and performance reviews. It runs statistical analyses to predict the likelihood that employees will leave the company in the coming year. The results, coupled with sales forecasts, enable the company to predict how many new employees will need to be hired in each department.
The variety of factors that the HR team considers is key to making informed decisions that will benefit the company.
For example, regressions are used to determine whether turnover is related to changes in employee benefits and even the month of the year. If the analysis shows that a factor has been significant in the past, the HR team accounts for it in the forecasts. In one situation, the team found that retirements in a department rose after the company announced that it would be phasing out health insurance benefits for retirees. More experienced workers left before the phaseout took effect. When the company prepared to phase out similar benefits in another division, the planners knew they would need to step up recruiting efforts in preparation for an uptick in retirements.
Some of the data Invincibility uses for planning are unsuitable for other kinds of HR decisions. For example, the company has found that employees’ ages and marital status are relevant for predicting whether they are likely to leave the company. Turnover rates are higher among unmarried employees and recently hired employees (who tend to be younger). Thus the company plans greater recruiting efforts in departments where it has higher levels of young and unmarried employees. It also may consider stepping up its efforts to mentor and train employees in these departments for greater retention. However, it does not make employment decisions such as hiring and promotion based on these factors.
DISCUSSION QUESTIONS 1. Besides those identified, what other factors should Invincibility Systems take into account in its HR planning?
2. What legal concerns does the data analysis at Invincibility raise? How should the company address those issues?
3. Besides its use for HR planning and recruiting, how might Invincibility’s data analysis be applied to improving the company’s training programs?