Q WORKFORCE PERFORMANCE REPORT

© Evolv 2013

Q4 2013 WORKFORCE

PERFORMANCE REPORT

KEy FACTORs iMPACTiNg ThE PERFORMANCE ANd

PROFiTAbiliTy OF CusTOMER FACiNg WORKFORCEs

Table of Contents

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Big Data Analytics: The New Industry Standard for Managing Workforce Performance The True Factors Impacting Workforce Performance

Top Influencers of Customer Satisfaction Top Influencers of Workforce Attrition Workplace Relationships

Employee Traits Company Practices

Unlocking the Benefits of Big Data for the Workforce

“Evolv is one of the very

few companies that

produces rigorous and

transparent research on

the workplace. Their work

helps to improve and

extend our understanding

of the workforce, and

allows employers to be

more efficient.”

— Professor Matthew l. spitzer, director of the searle Center on law, Regulation, and Economic growth, Northwestern university

© Evolv 2013

“Big data investments in 2013 continue to rise, with 64 percent of

organizations investing or planning to invest in big data technology

compared with 58 percent in 2012.”

FOR MANAgiNg WORKFORCE PERFORMANCE

The ShifT To DaTa-Driven DeciSion-Making

In business conferences and boardrooms around the world, leaders are asking: what does the era of big data mean for my company? Data has become a critical business asset, just like labor and capital. The sheer volume of data that is available and the speed with which it can be analyzed is providing companies with new and unexpected insights into their business. Big data is debunking common myths and

misconceptions to improve one of the most critical business functions for any company: workforce performance. Poor workforce performance drags on revenue whereas optimal workforce performance provides a critical competitive edge. Now, the selection, training, management, compensation, scheduling, and retention of employees can be optimized using big data analysis.

Big data analysis of the workforce allows business leaders to factually answer questions such as: Which job applicants will deliver the best customer

employee retention? What types of hires will sell the most product? The hiring and managing of people has long been done by gut and intuition. Now, companies are turning to data to uncover the facts and drive decisions.

Yet many companies are encountering challenges in tapping this new source of competitive advantage. Corporations face common barriers that inhibit their ability to unlock the benefits of big data: siloed and incomplete data, lack of fact-based analysis, and difficulty in operationalizing key findings.

Big DaTa analySiS anD acTion Drive ProfiTS

The benefits are clear. Adopting a big data approach to workforce performance leads to measurable improvements, such as higher customer satisfaction, increased sales, more efficient recruiting, and better retention. Driving these outcomes requires analyzing data across the entire employee lifecycle, identifying the key factors impacting workforce performance, and

Poor workforce performance drags on revenue whereas optimal workforce performance provides a critical competitive edge.

Big data analysis of the workforce allows business leaders to factually answer questions.

© Evolv 2013

Case in poinT

The Results Companies, one of the most

successful Business process outsourcers

headquartered in the United states today,

adopted a big data approach to workforce

performance to meet the needs of its

high-visibility Fortune 500 clients. Results

saw improvements across every facet of

the employee lifecycle:

Attrition was reduced 25-35% across key programs, representing savings and improvement to overall workforce quality.

“We have clearly entered an

economy in which talent is

considered a critical and

scarce commodity. When this

happens, companies should

get smarter about every

single talent decision. Enter

the world of ‘data-driven’

people decision-making.”

Improvements to customer handling efficiency and adherence to schedule enabled Results to manage the same number of customer transactions with as much as 20% fewer employees. Business units focused on new business sales generation realized an increase in sales productivity of 8-10% across key programs.

Evolv optimizes the performance of workers across brands, including 20 percent of the Fortune 100. In this report, Evolv shares key findings on performance and attrition from its Workforce Big Data network.

“The HR field is poised for revolutionary change. The

avail-ability of firm-level electronic data, which are often

record-ed in widely-sharrecord-ed formats, mean that it is now possible

to statistically model and analyze personnel behavior on

a large scale. These data will provide new impetus to the

fields of personnel and labor economics, organization

behavior, labor law, and others. The resulting insights will

flow back to companies through improved HR practices.”

— Dr. Nicola Persico, Professor of Managerial Economics and Decision Sciences, Kellogg School of Management, Northwestern University

© Evolv 2013

ThE TRuE FACTORs iMPACTiNg

WORKFORCE PERFORMANCE

As the economy becomes more service-based, customer satisfaction is an increasing determinant of market advantage. What drives customer satisfaction? The short answer is people. Companies know that their people represent their brand. Around the world, employees are interacting with customers over the phone, at the register, and on the retail floor. These employees are responsible for critical customer, revenue, and profitability outcomes on behalf of the brands they represent.

10%

11%

23%

27%

28%

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

New big data findings quantify the top factors driving customer satisfaction – a critical key performance indicator in a service-driven economy. What really matters?

Workplace relationships – especially the relationship that employees have with their managers

employee traits – personality and fit with the job role, not the information on their resume

company practices – such as overtime policies

New big data findings quantify the top factors driving customer satisfaction

ToP influencerS of cuSToMer SaTiSfacTion

“The survey revealed that there

are a wide range of business

problems being addressed

using big data, although there

are some clear patterns. in

gartner’s 2012 and 2013

studies, business cases that

improve process efficiency

and business cases around

customer experience dominate

big data wish lists.”

It’s no surprise that some of the most people-intensive industries – telecommunications, retail, financial services, and staffing – often have the lowest customer satisfaction or Net Promoter scores. Uncovering the true factors that inspire customer loyalty isn’t just about knowing how, when, or where customers interact with a brand, it’s also about understanding how they experience a brand. That experience is delivered through a large, global, and often hourly workforce.

InsIghts In ActIon:

A top cable services operator looking to improve its Net Promoter and customer satisfaction scores decided to take a big data approach. Through analysis of data from disparate systems across the employee lifecycle, the company was able to get a full picture of what was really

driving the customer experience. _{Net Promoter scores}

3% 4%

Customer outcomes were the same whether an employee was experienced or new to the role.

DATA-DRIvEN INSIghTS

ToP influencerS of cuSToMer SaTiSfacTion

One of the most important insights was that prior work experience, a cornerstone of the company’s hiring criteria, was in fact not predictive of performance on the job. Customer outcomes were the same whether an employee was experienced or new to the role.

Data-driven insights boosted Net Promoter scores by 3% and customer satisfaction by 4%. Given the scale of the company’s operations, each percentage point of improvement was valued at millions of dollars.

Some of the most people-intensive industries often have the lowest customer satisfaction or Net Promoter scores.

Telecommunications

Financial Services Retail

© Evolv 2013

Business has entered an era in which data is

abundant and analyzed in real-time. Yet, evolv

research demonstrates that many employers

with sizable workforces are still weighing the

wrong factors when it comes to workforce

decision-making.

Getting it right is critical when it comes to the workforce. Hiring and training employees is costly and retaining employees is critical to business profitability. And yet, average turnover in U.S. hourly jobs is 50% and in some industries and job types is regularly as high as 200%.

Using workforce analytics software, researchers

uncovered some of the top factors that impact attrition. The key drivers fell into five main areas:

Workplace relationships employee traits

Job characteristics macroeconomic trends company practices

In a prior workforce performance report, Evolv analyzed data for each of these five factors. In this report, Evolv analysis looks at the impact of these factors specifically for customer support roles.

Average turnover in U.S. hourly jobs

50%

ToP influencerS of Workforce aTTriTion

for cuSToMer SuPPorT roleS

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

11%

10%

7%

5%

4%

Some of the key findings of prior studies have informed the studies in this report, including: • Previous experience does not predict future

performance or tenure

• Job hoppers and the unemployed often make great workers

• Highly organized trainers aren’t as good as very communicative trainers

• Great managers positively impact employee tenure more than any other factor, even the employees themselves

for cuSToMer SuPPorT roleS

“in one of the most

comprehensive global

surveys to date, corporate

directors identified talent

management as their single

greatest strategic challenge.”

Workplace relationships, especially the relationship between employees and their managers, had a greater impact on attrition than all of the other factors combined.

Given the outsized impact of managers on employee attrition, this report dives more deeply into the question: What makes a great manager?

© Evolv 2013

Managers influence employee performance and

tenure more than any other factor. employees

with the best managers are six times more

likely to remain on the job. employees with

good managers also outperform when it comes

to customer satisfaction, productivity, and

sales. so what makes for a great manager?

it’s not always intuitive.

inSighT: Manager TraiTs

One surprising finding from recent customer analysis is that the higher managers score on the innovation and creativity scale, the worse they do at keeping their employees. Traits like innovation are often prized in executives, but the study suggests it isn’t a valuable trait in operational managers, as it leads to employees who remain on the job for shorter periods of time. Managers who multi-task also showed worse retention of supervised employees.

Managerial traits that positively impact employee retention include an aptitude for leadership and teaching. Adaptability also rules. Managers that live in the moment and readily adapt to changing business conditions retain employees longer than managers that strategize and plan for the future.

inSighT: LengTh of reLaTionship

Employees build up a relationship with their manager over time that allows them to perform better. For every month spent with a manager, for example, average call handling time--a metric for productivity for contact center agents--falls by half a percent. Over the course of a year, a customer service representative could improve 6 percent in average call handling time if working with the same manager.

DATA ShOWS WhAT MAKES gREAT MANAgERS

ThOUghT TO MAKE gREAT MANAgERS leadership Teaching adaptability innovation creativity Multi-tasking

WorkPlace relaTionShiPS

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

11% 10%7% 5% 4%

69% 10% 11% 23%

27% 28%

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

inSighT: Manager educaTion

While big data analysis often uncovers counterintuitive results, when it comes to education the analysis reinforces long-held beliefs: education matters. Having a technical degree, bachelors degree, or better allows managers to retain their employees at a higher rate than someone with a high school degree or associates degree. Managers with either a high school education or associates degree perform worse when it comes to retaining employees.

inSighT: Manager experience

A major finding of a previous workforce report was that an employee’s existing job-related experience was not predictive of tenure or performance for hourly workers. This runs counter to the conventional wisdom. One of the first things a hiring manager does when reviewing applicants for a job is look for prior experience. Yet, when hiring hourly employees, experience is considerably less important than aptitude and work style.

This finding only holds true, however, for staff positions. It isn’t the case for managers. More experienced managers have better customer satisfaction scores and better performance overall. When it comes to managers, previous experience in a leadership position matters.

EMPlOyEE TENURE By SUPERvISORy EDUCATION lEvEl

180 0 100% 90% 80% 120 60 30 90 150 Pr obability of Survival

WorkPlace relaTionShiPS

© Evolv 2013

InsIghts In ActIon:

53,000

4.6

Million employees Boosting the performance

WorkPlace relaTionShiPS

How can a company save millions in workforce costs? The average Fortune 500 company has 53,000 employees. A company of this size can save $4.6 million just by boosting the performance of managers in its bottom quartile.

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

11% 10%7% 5% 4%

69% 10% 11% 23%

27% 28%

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

Big data reveals what traits make for

high-performance workers and it’s not information

you will find on a resume. There are certain

employee traits that are important for every

job, such as learning quickly, supporting

organizational goals, and being dependable.

But for certain roles, particular behavioral

traits are key to performance.

inSighT: unique eMpLoyee TraiTs

Seasonal workers should be extroverted, inquisitive, and good at multi-tasking. Loyalty and creativity are not important. The data show that reward-driven workers make the best hires.

Online, self-service technical help is becoming more ubiquitous. This actually makes work even more challenging for technical support workers – they are getting only the toughest customer calls. Data show that the optimal technical support employees, unsurprisingly, are great at problem-solving and analytical reasoning. However, they must also master the art of “maintaining patience despite setbacks.”

© Evolv 2013

Work-from-home employees must master the art of working autonomously and prefer a non-verbal communication style. The data says that an in-person handshake or pat on the back does not motivate them but rewards for task completion do.

Retail workers must have an aptitude for sales, being persuasive and overcoming objections. Employees that succeed best in a retail environment have some unusual abilities, including an aptitude for resolving conflict.

Fast food and restaurant staff need a high tolerance for working in hot, bustling environments. The most productive workers are rule-followers and naturally abide by strict food handling and safety procedures.

eMPloyee TraiTS

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

11% 10%7% 5% 4%

69% 10% 11% 23%

27% 28%

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

Company practices affect workforce

performance and profitability throughout

the employee lifecycle. From the creation of

job applicant assessments and recruiting

policies to the training and promotion of

employees, company practices can help or

hinder performance and retention. For this

report, researchers examined the impact of

overtime policies.

inSighT: opTiMizing overTiMe

There is a “sweet spot” in overtime: in order to keep employees engaged but not burned out, they should work one to three hours of overtime a week. More or less can actually decrease tenure. This might suggest that overtime is most effective if existing shifts are extended and less effective if employees are working extra shifts.

Hourly employees stay in their jobs longer when offered the opportunity to work overtime, recent client analysis shows. Employees averaging one to three hours of weekly overtime showed 58 percent better retention. It may be that hourly workers welcome the extra compensation boost of overtime.

EMPlOyEE TENURE By AvERAgE WEEKly OvERTIME

0 30 60 90 120 150 100% 80% 70% 60% 50% 90% 40%

0-1 hour 1-3 hours 3+ hours Overtime is key to retention

and productivity

Employees averaging one to three hours of weekly overtime showed 58 percent

Pr

obability of

Retention over Time

58%

© Evolv 2013

InsIghts In ActIon:

coMPany PracTiceS

Small changes lead to big dividends

Evolv analysis for a Fortune 500 company with nearly 50,000 workers showed that optimizing overtime policies would result in savings of $10 million dollars annually.

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

11% 10%7% 5% 4%

69% 10% 11% 23%

27% 28%

EMPLOYEE TRAITS JOB

CHARACTERISTICS MACROECONOMIC TRENDS PRACTICESCOMPANY WORKPLACE

RELATIONSHIPS

“Technologies such as big data have transformed business

intelligence from the stuff of stodgy analyst reports to an

instant stream of information.”

© Evolv 2013

uNlOCKiNg ThE bENEFiTs OF

big dATA FOR ThE WORKFORCE

Recruiting, retaining and maximizing the

productivity of the best possible talent is

critical to the profitability of hourly workforce

operations and competitive advantage in the

market. Until now, business leaders have had

limited visibility into the true reasons behind

workforce performance. not anymore.

reSearch MeThoDology

The Evolv Workforce Big Data network aggregates half a billion data points on the performance, retention, demographics, and behavioral traits of applicants and employees at many of the world’s most influential global brands. Predictive data is extracted from disparate internal human resources systems, publicly available macroeconomic indices, and via Evolv’s own proprietary psychometric instruments. By merging and cleansing these different data streams, Evolv employs Big Data techniques and machine learning algorithms

to parse and identify workforce insights. The statistical _Countries

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The result is the ability to offer companies predictive insights that inform management decisions and save millions of dollars and ultimately changing the way companies manage their hourly workforce.

reliability is extremely high, with the typical analysis incorporating millions of employee data points. In the Workforce Performance Report, Big Data analytics are used to decode the key factors driving workforce performance in organizations. More than just data, the report leverages proprietary algorithms and the expertise of Evolv’s team of workforce science experts to uncover what to do with the data—and why it matters. The result is the ability to offer companies predictive insights that inform management decisions and save millions of dollars by improving employee selection, development and transition—ultimately changing the way companies manage their hourly workforce.

About Evolv

Evolv is a big data company that helps solve workforce performance issues for the C-suite by using a configurable cloud services platform. Evolv’s patent-pending technology platform unifies and supplements existing data from current systems, then uses that dataset to identify factbased workforce insights that drive measurable ROI. By using objective, data-driven methodology, Evolv helps companies uncover the core reasons behind workforce performance, enabling executives to make better operational business decisions that generally result in tens of millions of dollars in measurable value per year. For more, visit: www.evolv.net, follow @EvolvBigData and connect on LinkedIn.