Identify, Measure and Manage Workforce Related Risks Effectively.

Risk Management professionals have the important task of ensuring obstacles that could jeopardize the organization's earnings, shareholder value and strategic plans are mitigated. As a result of the new Securities and Exchange Commission (SEC) regulations passed on February 28th, 2010, Boards of Directors have been delegated far-reaching responsibilities related to shareholder risk management including discovery, monitoring and reporting on a quarterly basis.

When 7 to 41% of earnings is lost due to inefficient Human Capital Management processes and systems, it becomes an essential domain of Risk Management executives.

It is not uncommon to include a statement in your 10-K (if you are a public organization) regarding your ability to attract and maintain quality employees or effectively develop leaders for succession planning. Unforeseen challenges associated with your human capital strategy could include such factors as:

Shortage between the business' labor requirements and the actual supply of skilled labor
Unnecessarily long time-to-fill periods for revenue producing positions directly resulting in lower profitability
Excessive amounts of leave and extended work schedules resulting in measureable increases in accidents, lost revenue, delayed strategic projects and lost customers
Excessive overtime due to inefficient recruiting and retention processes
High turnover of top performers in high impact and mission critical positions
Poor human capital performance across certain business units
Imbalance of minorities across the board, especially in leadership positions
State and Federal minimum wage requirements and other regulations

Your workforce affects every aspect of the organization, placing business initiatives at risk, lowering your KPI's and increasing earnings and shareholder risks. Delayed decisions and execution on projects, production and distribution result in poor customer service and lost goodwill and opportunity costs. A lack of leadership or management skills or poor order fulfillment can lead to low sales and high turnover.

Consider the case of the distracted or overworked plant maintenance worker who makes a simple mistake resulting in a plant explosion, shut-down, over a billion dollars in lost revenue, environment impacts and even the death of employees.

You may be a risk manager for a major retail organization on track to achieve its annual goals, when the top performing network analyst leaves a group of unmotivated employees during the holiday season. They carelessly allow the primary T-1 network supporting the entire web sales system to crash resulting in frustrated and often lost customers.

These are real examples of a single employee's impact on an organization. So why isn't more attention being paid to, undoubtedly, the most important component of your strategy? Because I wasn't until now that there has been a way to quantifiably measure or monitor this risk.

SonarVision answers your workforce and labor related questions. This workforce planning and analytics system equips leadership with the tools and information to plan, direct, manage and optimize nearly all other mission critical systems, projects, programs and operations.
Case Studies

SonarVision is unprecedented in answering your workforce and labor related questions. This workforce planning and analytics system equips leadership with the tools and information to plan, direct, manage and optimize nearly all other mission critical systems, projects, programs and operations.

In an engagement in the healthcare industry, OrcaEyes used SonarVision to identify opportunities for operational improvements. In this analysis, OrcaEyes discovered potential workforce shortages actual supply versus demand for the ensuing 12 months in positions directly tied to revenue. These shortages were putting more than $1.8 billion of billable revenue at risk. To compound the problem, a 34% annual turnover rate of these positions was adding additional recruiting and training costs. Additionally, margins were reduced by as much as 21% due to the increased use of high-cost, prime contractors and an already funded capital expansion projects was indefinitely delayed resulting from current shortages in existing positions.
By proactively creating talent supply pipeline based on quarterly business demand forecasts for one-year, and a implementing manager training and incentives program, time-to-fill was reduced by 40% and first-year new hire turnover was reduced by 14%. The result was an increase of margins on billable services by 8.2%.

OrcaEyes was contracted by a company with a large manufacturing division to look for ways the company could improve operations. SonarVision correlated common workforce information to key business outcomes and discovered that when operator class employees worked three weeks in a row with an average of 12.5 hours or more of overtime per week, accidents caused by human error increased by 106%. Unplanned downtime cost the global firm more than $2.2 billion annually, and more than 42% of unplanned downtime was caused by human error.
SonarVision measured position gaps and operator leave, predicting trends which alerted management before the operator gaps became problematic. The company used the alerts to prompt the hiring of temporary labor before work levels exceeded error-causing thresholds. Pay rates were raised by 8% to reduce turnover and safety training was conducted for operators and skilled trades.
SonarVision supply-demand forecasting and alerts now provide management with up to two months advance notice before human capital problems result in business problems. The end result was a 51% reduction in lost revenue due to human error accidents.

A national Insurance company hired OrcaEyes to identify areas where significant operational efficiency improvements were possible. OrcaEyes flagship workforce planning and analytics software, SonarVision, found correlations between scores on an employee engagement survey and insurance appraiser performance. It was quickly discovered that underwriters with engagement scores below 50% wrote 62% fewer adjustments than those underwriters in the 77% plus engagement range. Also, the group with scores below 50% had a 55% higher rate of re-adjustments (“re-do’s”).
OrcaEyes consultants helped the agency develop a new employee branding program to help improve engagement levels. The result: Higher engagement scores translated into 3.1% increase in estimates written and 5.7% decrease in re-do’s. These results were achieved over the first nine months of the new employee branding program.

OrcaEyes implemented SonarVision Enterprise to help a transportation company uncover areas where labor spend could be optimized. In the process, SonarVision revealed premium overtime pay (50% factor) to truck drivers accounted for 11% of earnings. Workforce Analytics showed more than 38% of these overtime costs were caused by high turnover of top performers, excessive supply/demand gaps and lengthy time-to-fill periods.
Action plans were developed to regain 70% of the lost 38% overtime pay to be reapplied to the bottom-line earnings. The result: Projected increase in earnings-per-share by 12 cents in the first year.