There is now a report in Wall Street Journal on how firms
are increasingly using statistical analysis to find out which employees are
more likely to leave, and using this information to improve personnel management
and target employees for interventions to make staying more worthwhile. Firms
do this because replacing employees who leave can be very expensive, making the
analysis and the responses cheap in comparison. It says a lot that Wal-Mart, a
firm known to be careful about its expenses, is investing in such analysis. It
is probably less surprising that Credit Suisse does so, given the importance of
keeping staff in banking, or that some human-resource analytics firms do, given
that they can use these results to keep their own staff and sell the methods to client firms.
What have they discovered by analyzing their employees?
Well, they are more likely to leave if they have problematic managers or little
contact with co-workers, less likely to leave when they are given opportunities
to change jobs internally (especially promotions), plus a variety of other smaller
discoveries.
Is this surprising? Actually we have known it for a long
time. Job mobility is an established field of sociology and management
research, and as far as I can see the statistical analysis done by the firms
re-discovers what is already known. So, I would probably not go to a firm
statistician expecting to learn much new about job mobility, though I would
still find it interesting to see what they are doing.
Does that mean it is worthless? It does not. There are two
really significant pieces of progress in the news that firms are doing this
analysis. The first is that the whole point of studying job mobility is to understand
what happens to the lives of people and the fates of organizations, and it is wasteful
to have this understanding without also using it to improve the lives of people
and the fates of organizations. Job mobility is often valuable, but there are
also many cases of job mobility that is wasteful for the employee and the firm.
It is better to reduce them. The second piece of progress is that firms are now
gaining knowledge that lets them address the situation of each employee, and
they can often intervene in positive ways such as improving job content or
opening for promotions when they see a risk of that employee leaving.
There is of course some potential that this gets intrusive
or used in troublesome ways, so it is worth watching. Firms are after all able
to track health coverage decisions and health care use with enough detail that
they can start linking them to job mobility, something that would be new to
academic researchers and potentially troublesome. They could also track emails,
which academic researchers have already done but always anonymously. There are good reasons to limits such data
collection and analysis.
Even with these potential problems, it is nice to see
business catching up to the value of research. Of course, it has only done so to
a limited extent. The number of statistical analysts involved in this work is
far fewer than the number of human resource managers (and other managers) who
thinks that such management is an art that calls for their unique experience
and cannot be understood by others. Maybe some of these managers are right, but
on average I would place my bets on the statistician.