Moneyball

For those of you who haven’t read the book or seen the movie starring Jonah Hill (and some guy named Brad Pitt), Moneyball is a pretty endearing story about how Oakland Athletics General Manager Billy Beane applied unorthodox statistical analyses (now known as Sabermetrics) to field winning teams. By assessing talent through seemingly obscure statistics such as Batting Average on Balls in Play, Ultimate Zone Rating and Value Over Replacement Player, Beane was able to uncover the proverbial diamonds in the rough. His success is indisputable: Oakland made the playoffs five times during the 2000’s despite a team payroll that was one eighth the size of the New York Yankees’.

So what relevance does this have to Forces@Work? I raise the Sabermetrics concept because Moneyball may hold value for talent management and acquisition professionals. What if HR leaders deduced and applied their own Sabermetric-like statistics when assessing talent? True, many companies use competency models, workforce analytics and other sophisticated assessments (e.g., Gallup, Hogan, etc.). Many other more progressive companies have tried to take it to another level (e.g., Google’s Project Oxygen, all the great I/O Pscyh work at P&G). However, it still seems like we’re still only the scratching the surface (valid and comprehensive HRIS data being a significant limiting factor).

If we suspend disbelief for a minute and envision a utopic world, potential HR Sabermetrics could consist of:

Business Impact: Revenue (or Productivity) Over Replacement Professional
Utility: Range Factor (a skill-based metric used to assess the number of functions/areas the individual can operate)
Leadership Communication: NERD (a statistic used to quantify players’ aesthetic value…could potentially be used as a proxy for charisma)
Contribution: win share (a statistic used to determine how much an individual contributed to a team’s success)

And the list goes on and on… Anyone interested in collaborating on this with me?

Don't Ask, Don't Tell?

A WSJ article that I read got me thinking. No, not about the recently repealed policy governing sexual orientation in the military, but rather about whether or not managers have an obligation to communicate an employee’s high potential (HIPO) status or lack thereof.

According to a recent Towers Watson study of 316 North American companies, over two thirds formally identify HIPOs. However, only 28% of the companies surveyed actually tell their employees they’ve been designated as such.

An interesting debate has recently been taking place (it’s probably been going on for a while, however, this topic has only piqued my interest lately). While proponents say that telling is a great strategy for engaging and retaining your HIPO employees, opponents fear that communicating the HIPO tag could foster a sense of entitlement and divisiveness between the haves and have-nots.

Personally, I’m in the “Do Tell” camp. Reason being, in the uber-competitive war for talent, leaders must do everything (legally) possible to retain their top talent. Knowing one’s status is a lot better than leaving employees to wonder…and possibly grow disenchanted. Of course, communicating one’s HIPO status should come with a bunch of strings (e.g., designation is revocable, no guarantees, what you must do to maintain your HIPO status). However, in the long term, I think it would a lot easier and more effective to manage HIPOs who know vs. don’t know (and leave).

What say you?

Analysis: BLS October 2011 Jobs Report

For the third straight month, the US unemployment rate remained steady at 9.1%; the broader underutilization rate increased to 16.5% (from 16.2%).

• A net +103k jobs were created in September, surpassing economists' consensus estimates of a 60k increase; July and August payrolls were revised upward by ~100k jobs (Note: While any jobs increase is good news, this figure reflects the 45k striking Verizon employees who were not accounted for in August).
• Approximately 14.0M persons remain unemployed; long-term unemployed, those who have been out of work for 6+ months, remained flat at 6.2M (44.2% of all unemployed).
• The labor-force participation rate, the share of the US population in the jobs market, increased slightly to 64.2% (from 64.0%).
• Average hourly earnings increased to $23.12 and 1.9% on an annual basis.

Gains/losses…the usual suspects

• Professional and business services (+48k; temp. help: +19k), health care (+44k) and retail (+14k) trended positively; one welcomed surprise: construction (+26k).
• Government (-34k) and manufacturing (-13k) continued their “September swoons”. (Note: The US Postal Service’s financial difficulties, along with state/local government austerity, will continue to weigh on the government sector).

What’s in store? Key watch items…

On the bearish side:
• Sources of US job growth. If we zoom out and look at where job growth has been primarily coming from over the past year – health care and temporary help - this does not inspire confidence in a meaningful economic recovery.
• Manufacturing. The global manufacturing sector, which previously powered the global economy out of recession, continues to decelerate. The negative trend in new orders means that companies are working off their backlogs from earlier in the year and are struggling to attract new business. The net effect: a (potential) vicious cycle where decreasing demand in advanced economies (US, EU) affects growth in developing economies (Asia) and vice versa.
• Global GDP. The International Monetary Fund (IMF) predicts global growth of 4% for the next two years with continued growth in the “BIC” countries offsetting the US and EU woes. However, growth could be further impaired if countries fail to address their debt crises and rising inflationary pressures.

On the bullish side:
• Credit Card Debt. As a potential sign of improving consumer demand and sentiment, a recent study by Cardhub.com showed that consumers racked up $18.4B in credit card debt in Q211. That’s 66% higher than a year ago and more than four times greater than two years ago.
• Small Business Hiring. According to a September survey of 7500 US businesses conducted by Pepperdine University and Dun and Bradstreet, 41% of small firms said they plan on expanding their payrolls within the next six months (vs. 38% who said they won’t and 21% who remain unsure). Among the areas of demand – sales and marketing. Given that small businesses employ about half of the private sector, this may provide a much needed catalyst.