REVA University research group formulates a framework for Employee Life Time Value

Talent Analytics is an important function of an enterprise. Davenport argues that companies using talent analytics are likely to be performing better than others. According to his article, Talent Value Management form the backbone of a long term engagement with high-performance employees, which can yield multifold benefits.

Moneyball is a player selection/retention analytics framework, which has been successfully used to profile players and build a successful team with average but consistent players [2]. Many such studies have defined talent analytics metrics required for this analysis in HR.  One such metric is Employee Life Time Value (ELTV). Articles written by Hire and Maia Josebachvili depicts it as a graph, where the value measurement is expected to increase over time, decreasing only when the employee leaves the organization [3,4]. Maia Josebachvili observes that the benefits of applying Moneyball can lead to 2X to 6X compared to no analytics .

Researchers at REVA University RACE Labs have extended this area of research into a P3 Model; profit, performance and propensity to understand the hidden segments in the employee base to understand potential gains and risks with human resources.

The evidence-based research has analyzed HR data from multiple companies and developed a framework which segments the employees on multiple parameters into distinct groups such as high value/high cost to low value/low-cost groups and in between. The scoring of the employees based on the P3 variables has been used to segment the customer as high risk/high profit to the other end of the spectrum, low risk/low profit. They are also suggesting strategies for each of the segment based on global best practices.

It is interesting to see how this work helps organizations to reap benefits from data as elucidated by Google. Implementing this model leads to the below proactive measures,

• Identify the strategies for getting best out of employees evidenced by data
• Understand the career path and improve retention
• Improve the recruitment quality over a time frame
• Build a consistently high performing team at optimal cost and more.

To know more about this research, do write to racelabs@reva.edu.in.

For consulting and adapting this model to your organization, do check here (Link to Consulting – ELTV)

Tag: Insights; HR Analytics; Employee Life Time value; HR Metrics; ROI 

References

[1] https://hbr.org/2010/10/competing-on-talent-analytics

[2] Lewis, M. (2003). Moneyball: The art of winning an unfair game. New York: W.W. Norton.

[3] https://hire.google.com/articles/employee-lifetime-value/

[4] https://medium.com/@MaiaJo/how-to-understand-the-roi-of-investing-in-people-b0049e006a84