February 9, 2011 © Human Capital Management Institute Presents: Creating a Talent Management Index
Jan 02, 2016
Agenda
• Welcome
• Overview
• Building a Talent Management Index
• The Future of Talent Management and the Workforce Intelligence Consortium
• Q&A
• Next Steps
2© Human Capital Management Institute
About Human Capital Management Institute
HCMI Background:
Specialized in HR analysis & measurement
Deep expertise in Workforce Analytics & Planning
Board made up of CFOs and HR heads
Over 40 years of experience
What We Do:
Measure the immeasurable in human capital
Transform workforce data into business intelligence
Provide Tools and Training so HR can Partner with Finance
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Workforce Assessment w Strategic Consulting w Training
Best Practices w Workforce Analytics and Planning w Benchmarking
The Human Capital Management Institute (HCMI) was founded on the belief that organizations can and must, find better ways of measuring their investments in human capital. Our vision of the future is one in which human capital measurement and information is as integral to business decision making as financial information is today.
We Bring Financial Discipline, Standards and Rigor to the HR Function
© Human Capital Management Institute
Workforce Planning and AnalyticsAnalyze the Past to Predict the Future
WorkforceAnalytics
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Past Present
WorkforcePlanning
DecisionMaking
Historical Workforce
Future Workforce
Current Workforce
Future
Trend Analysis Future ScenariosWorkforce Knowledge
Predictive Analytics
Key performance
Indicators
Workforce Optimization
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The Challenge of Measuring Human Capital
Compensation
Transfers
New Hire Turnover
Succession Data
Turnover
Training
Recruiting
Em
ploy
ee D
ata
Benefits
Span
of Control
Workforce
Planning
SuccessAdvanced
Analytic
Insights
Complexity of Workforce Data
Employee/Full-Time-Equivalent (FTE)
Jobs/Roles/Skills
Time - Tenure
Compensation ($ vs. Equity)
Frequency of Change
Promotions, Transfers, Hires, Terminations
Jobs/Roles/Skills
Time - Tenure
Measuring the Intangible
Lack of Standards
Lack of Analytic Skills
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• Revenue
• Expenses
• Assets
• Liabilities
What is Workforce Intelligence?
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Business
Financials
• Hiring
• Paying
• Developing
• Engaging
• Retaining
• Diversity
Human Capital
Customer
How do we get from Human Capital to Financials and deliver actionable data?
• Unit Cost
• Cycle Time
• Sales
• Ops
• Quantity
• Quality
• No. attracted
• Conversion rate
• Spend amount
• Margin
• Satisfaction
• Return rate
© Human Capital Management Institute
Quantifying Manager Effectiveness
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Can you quantify which of your managers are more effective at managing talent?
Manager A Manager B
• Hires experienced employees
• Exceeded business performance goals
• High employee turnover
• Low employee mobility
• Hires junior employees
• Exceeded business performance goals
• Trains and grows team members
• Employees stay and move up in the organization
• High employee performance
Measuring Complex Activities and Actions
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Base Data - No Metrics
Calculated Metrics (e.g. turnover rate)
Simple Metrics ( e.g. headcount, terminations )
Combined Source Metrics (e.g. Time to profitability)
Insightful Metrics (e.g. Revenue per FTE)
Advanced Metrics(e.g. Career path ratio)
Index Metrics (e.g. New hire success rate)
Complex Index Metrics (e.g. Quality of Hire)
Measuring manager effectiveness requires
advanced measures and metrics
HCMI Metrics Hierarchy
Building a Talent Management Index
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• Career Path Ratio
20%
• New Hire High Performer Rate
Mobility
• High Performer Turnover Rate
• % of High Performers
Performance Management
Turnover and Retention
• Total Cost of Workforce % of Expenses
Cost ofWorkforce
20% 20% 20% 20%
Recruiting and Hiring
Talent Management IndexThe Talent Management Index is a holistic measure encompassing a manager’s totaltalent management practical results and impacts. Such a metric can be used as anincentive compensation modifier. It is designed to hold senior managementaccountable for Talent Management. Ideally, all index metric components should becalculated on an individual manager basis.
Example Talent Management Index
Case Study: Key Turnover Driver – ManagementScofield Financial Corp
* Managers with under 1 year of supervisory experience
** Managers with only 1 direct report
Management Group
Percent of Managers
Percent of Turnover
30%
34%
22%
14%
10%
81%
8%
2%
Low Turnover
High Turnover
New Manager*
1 Employee**
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In most companies, the quality of management is a key component of employee turnover
It is possible to segment management population by high and low turnover managers
Look for managers with turnover disproportionate to the size and mix of their workforce
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Example: Custom Manager Scorecard
Weighted average benchmarks* of all workforce categories, based on proportional representation in workforce.
Benchmark turnover rate for each workforce category
* Example benchmarks for illustrative purposes only
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Case Study: Metrics in Organization ChartsVoiceCo Communications
High Level Org Chart View• Color coding by performance level• Span of Control / Total EEs managed• Management / Non Management at a glance• Additional manager data and detail breakouts
Turnover Data by Manager• Supervised and total managed turnover• New hire and high performer turnover• Custom weighting Talent Management
Index roll-up
Custom Metrics: Talent Management Index• Custom index metric combines multiple KPIs• Measures development, retention, and performance• Managers evaluated and graded on how well they create
and retain talent at the organization
Note: Org charts developed using Org Plus software by Human Concepts
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Sums and averages vertically to the leader and creates
Custom scorecards with unique information is for each manager
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The Future of Talent Management:Human Capital Financial Statements
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Link workforce metrics and indices to business results across all elements of the employee and talent management lifecycle:
Objective
For most organizations, the workforce is both the largest expense and biggest asset. However, traditional financial reporting categorizes employees like disposable products and contains no information with which to measure this critical asset. For years, organizations have struggled to quantify the value of human capital, until now.
Background
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Human Capital Financial Statements measure the value creation and overall productivity impact of the workforce.
• Training Effectiveness Index
• Quality of Hire Index
• HR Value Delivery Index
• Employee Engagement Index
• Organization Stability Index
• Aging Workforce Index
Additional Index Metric Examples
Build Talent Management Capabilities
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Awareness Action Competence Effectiveness Excellence
QuantifyIntegrate
Predict
The Workforce Intelligence Consortium
accelerates your workforce planning and
analytics competency
Bu
sin
ess
Im
pa
ct
Align HR and business strategy
Create a Center of
Excellence
Utilize benchmark standards
Conduct root cause analysis
Leverage advanced metrics and ROI analysis
Workforce Intelligence Consortium
Workforce IntelligenceConsortium
Universities/ Educators
Thought Leaders
Benchmarking Organizations
Member Companies
HCMI
A partner-driven organization dedicated to quantifying and solving workforce planning and analytics issues
Dr. Jac Fitz-EnzSponsors
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Next Steps:
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For more information about HCMI and the Human Capital Metrics HandbookTM, visit
http://www.hcminst.com/hcmi.html
For inquiries about the Workforce Intelligence Consortium, contact Cheryl Farley, Program Director at
Presenter information: Jeff Higgins, CEO HCMI at [email protected]
Grant Cooperstein, Senior Consultant and Principal at [email protected]
Workforce Intelligence Consortium Group
@HCMI