Dive Brief:
- ADP, the large payroll company that has moved into HR and human capital management software in a major way, will offer a tech product later this year can apparently predict the flight risk of individual employees, according to a report in the Wall Street Journal.
- More specifically, ADP is testing proprietary algorithms, a part of data analytics, that can tally the odds of an employee leaving based on salary, commute time and other risk factors, the Journal reports.
- Naturally, if the ADP product delivers, employers will be able to use it to sharpen retention strategies in today's tougher labor markets, sectors where attracting and recruiting new employees, especially with high-demand skills, is negatively impacting the bottom line.
Dive Insight:
According to the article, ADP derives its algorithms from the massive amount of data collected from the company's 600,000 business customers using its payroll services and HR software apps. The data also includes information pulled from external demographic sources, Stuart Sackman, ADP's CIO, CTO and corporate vice president of the global product and technology group, told the Journal. To fine tune accuracy, ADP tested different formulas "against five years of historical, anonymized data on the employment paths of individuals," Sackman said.
Naturally, there's a "secret sauce" aspect to the ADP's product, which is why the product is labeled proprietary. Apart from reducing overall attrition, it can take those critical flight-risk factors down to the granular level, so managers can make logical offers involving perks, bonuses or working conditions, Sackman said. The obvious example would be an at-risk high-potential person with a long commute receiving some work-at-home days.
Big data and people analytics have become large parts of the HR world as of late, especially as the technology and algorithms improve.
