definingvalueandmeasuringhr-12997516872189-phpapp01

Defining Value and Measuring HR

Mark O’ Donnell, Director and Practice Leader, Human Capital Advisory Services, Consulting

© 2011 Deloitte Touche Tohmatsu

Agenda

2

Defining the Value of HR

Introduction 2

HR Strategy 6

Understanding the business 8

Define your HR Strategy 14

Measuring Impact of HR 18

Assess HR Function 25

Reassess HR Service Delivery 34

Conclusion 42

Questions


Context

3

If you can’t quantify the value that HR has on the Business, how do you prove your worth?



Marketplace Trends

4

Competition for funds and resources is today’s reality Major change and turbulent market conditions make it hard for Boards to determine

what the strategy should be Top management want to know the Return On Investment for all they spend

including leadership development and talent initiatives These more complex economic conditions offer an opportunity not only to rethink

business strategies but also HR strategy, if HR is core to the business strategy More and more of our clients are telling us that there is particular focus on HR

departments to ensure that All HR investments deliver quantifiable measurable value.- How can HR demonstrate a quantifiable return on investment for Human Capital

initiatives?- Which HR initiatives can be directly targeted at building organisation capability

that has a bottom-line impact – either increasing the organisation’s revenue or reducing costs?



People are Critical to Business Performance

More than 85% of senior business executives and HR leaders agree that people are “vital” to every aspect of their organisation’s performance

HR leaders and senior business executives agree the most critical people issues are:

• Leadership development and pipeline

• Talent management

• Creating a high-performance culture

• Training and development

Source: Aligned at the Top, a global survey on people and business challenges conducted by Deloitte Touche Tohmatsu and the Economist Intelligence Unit


There is a gap between HR capabilities and business needs Senior business executives want HR to be more

effective

•Only 4% describe HR as highly effective in addressing the needs of the business

•60% describe HR as only moderately effective

“People” and “HR” are often treated as separate conversations

•People issues are considered “strategic”, e.g. leadership development and pipeline, talent management, creating a high-performance culture, training and development

•HR issues are perceived as “administrative”, e.g. compensation and benefits, performance evaluations, HR operating efficiency

HR is often out of the loop on strategic issues

•Percentage of companies that “rarely” or “never” consult their senior HR team on key business issues:

‒ Mergers and acquisitions (63%)

‒ Compliance and regulation (26%)

‒ Talent (25%)


HR Strategy

7



A HR strategy should help an organisation create unique competitive advantage by outlining how the HR function and the services it offers will create business value and address the company’s most pressing strategic challenges.

The strategy should identify priorities for investment in HR products and services and in HR service delivery (people, process, technology, operations, etc.) to help address the organisation’s most pressing strategic challenges.

The strategy should include a roadmap for how the HR function will execute on the strategy.

The strategy should also outline the foundational HR capabilities required to effectively execute the strategy.

Typically, the HR strategy will be a two to three year strategy, but it should be refreshed every year.

Before forming your strategy you need to understand the Business

HR Strategy – Deloitte view


Understanding Business Strategy

9



Questions to Ask

What does the Business do to drive performance? Who are our shareholders and what do they want? What does our Business do?


What do the sections of the EVM HC represent?

1. Value DriversHow value is created


Value Drivers - How Value is Created


EVM HC: Changing the Mindset of How HR OperatesHR has traditionally been viewed as an overhead cost that is highly transaction-based. Behind every great product, service, and innovation are people.

Sustained Growth• Merger Integration• New Market Entry• Sales force

Transformation• Rewards

Transformation

Global Labor Shortage• Workforce Planning• New Market Entry• Global Mobility• Learning and

Development• Outsourcing and

Offshoring

Risk & Compliance• Global Workforce

Security• Regulatory

Compliance• Risk Management

Future Capabilities• Change

Management• Global Program

Management• Leadership

Development

OperatingMargin

AssetEfficiency

ExpectationsRevenueGrowth

Volume

Direct

Costs

(COGS)

Indirect

Costs

(SG&A)

Income

Taxes

S H A R E H O L D E R V A L U E

Property, Plant & Equip.

InventoryReceivables &

PayablesCompany Strengths

External Factors

Price


Human Capital Dimensions - Categories of Improvement Focus

The Human Capital Dimensions embedded within the map show the seven major Human Capital categories of improvement within an organisation.

Human Capital Dimensions

Talent Strategies:Talent-focused activities to execute short and long term business objectives

Learning and Development:Activities in support of employee and executive development

Change Management and Transformation:Activities focused on the people implications of major business events

Organizational Strategies:Activities in support of business initiatives that focus on developing organization and team structures

Employee Rewards and Benefits:Activities that link employees’ work experience to their commitment and contribution to business value

Governance, Risk, and Compliance:Activities to proactively manage the people-related aspects of risk, regulations, security, compliance, and ethics

HR Strategy and Services: Activities focused on HR strategy and service delivery


Define HR Strategy

15



Step 1: Understand Strategic Priorities & Business Context

Example: +10% Annual Growth Target Improve Product Development Pipeline

and Deployment Increase Share of Revenue Capture from

Advertising Improve Product and Service Mix

Acquire New CustomersRetain and Grow Current

Customers

Leverage Income-Strengthen Pricing

Marketing &

Sales

Account

Management

Cross-Sell/

Up-SellRetention

Demand &

Supply

Management

Price

Optimization

Product &

Service

Innovation

Cash/Asset

Management

VolumePrice

Realization

Revenue Growth

Generating Assets


Example – Strategic priorities and HR strategic actions:

Exponential Headcount Increase:Focus on recruiting and selection, retention practices, talent placement, and employee development.

HR Organization Transformation:Optimize the HR function.

Enterprise Cost Reduction:Maximize investments and spend on human capital to focus on business issues, operational efficiencies, and process excellence.

Focus on Customer Service:Build a culture of high performance and innovation with a focus on the customer.

Post Merger Integration:Support rationalization of core process, technology, people, and policy with a defined project portfolio.

Step 2: Identify Issues & Challenges


Deloitte’s HR strategy framework

Deloitte HR Strategy Framework

Define Value1. Understand business strategy2. Define HR strategy

3. Identify HR’s meaning

Deliver Value7. Establish a delivery model for HR services8. Upgrade the company’s HR capabilities9. Continuously improve HR operations10. Communicate the value of HR services

Align HR Services4. Segment stakeholders5. Prioriti`se HR investments6. Design HR services

HRStrategy

DeliverValue


Measuring Impact of HR

19


© 2011 Deloitte Touche Tohmatsu20

HR Balanced Scorecard?

The Balanced Scorecard is a means of connecting key decisions and control, that measures the value created by initiatives to the core business areas, compares program benefits to costs including: Customer Experience: How do customers see us? Business Impact &

Satisfaction Measurements Talent Strategies: What must we excel at? Learning and application measures –

knowledge, skills and attitudes and on-the-job behaviours Process and Innovation: Can we continue to improve and create value? Financial Focus: How do we look to shareholders?

The HR Balanced Scorecard aligned to business strategies measures improvement in customer value


“The Balanced Scorecard fills the void that exists in most management systems – the lack of a systematic process to implement and obtain

feedback about strategy” (Kaplan & Norton, 1996).


Best Practice Design: Characteristics of a Successful Scorecard


Involves the scorecard owner in the design

Characteristics

Makes efficient use of managers’ time

Understandable & transferable

Easily aligned across the organisation

Only this person knows the answers

Management time is scarce

Must be communicated across the organisation

Reason

Help the whole company work towards a common goal


Value of a Balanced Scorecard

HR

Transformation

HR Value


HR

Transformation

HR Value

Bal

ance

d S

core

card

The Balanced Scorecard examines the evidence of key HR Initiatives linking them to business performance measures that drive Business Strategy

The value of using a Balanced Scorecard, HR can fuel more sustainable employee initiatives with longer-lasting results

The Balanced Scorecard works as an ‘umbrella’ concept that links together

organisational objectives, ways of thinking and management tools.


Overall HR Scorecard – Client Example

Financial • Average termination cost • Cost of turnover• Cost of acquisition per hire ♦ HR Training spend (per Manager / Director / Executive)HR FTE RatioSLA compliance Vendor Management FTE Ratio+

HR Operating Expense/FTE

Customer Experience• Hiring Manager satisfaction with quality of new hires• Employee satisfaction with Career Zone♦ Employee satisfaction with career progression Business unit satisfaction with organisation design support Employee engagement index Frequency of communication Response rates on effectiveness surveysEmployee HRO satisfaction Self-service availability rate Portal usage penetration rates

Process / Innovation• Line manager use of recruitment centers• Share of employees with basics in place “day one”• Time to efficiency for new hires♦ Time to identify & approve leadership training request ♦ Course enrollment and completion rates ♦ Share of positions with successor identified ♦ Number of job families for which there are established

career paths Share of business using consistent change leadership

framework Number of issues at level 1, level 2 or level 3 support

Talent• Number of critical positions and critical workforce segments identified

• Retention of new hires• Retention rates by critical workforce segments• Leadership stability rates♦Number of internal leadership appointments♦Share of leaders reviewed in talent review process♦Timeliness of talent reviewsNumber of employee referrals Diversity of leadership teamOutsourcer turnover rate

Potential Metrics

Legend (Link to Critical HR Capabilities)• Talent Management♦ Leadership Development Organisational Development HR Administration


Metrics for critical HR capabilities and services can be identified…

Financial Customer Experience Process & Innovation Talent

Workforce Planning & Segmentation

• Cost of workforce planning process

• Business unit satisfaction with workforce planning process

• Workforce planning process performed annually and linked to budgeting process

• Number critical positions and critical workforce segments identified

• Share of critical jobs held by those with high / low performance levels

Talent Sourcing & Acquisition

• Cost of sourcing & acquisition process

• Cost of acquisition per hire• Business case savings realization

for Career Zone implementation• Referral bonus cost per hire

• Hiring Manager satisfaction with recruiting process

• Hiring Manager satisfaction with quality of new hires

• Employee satisfaction with Career Zone

• Number of positions where talent pool is already identified

• Time to fill positions • Recruitment source ratio• Requisition response rate• Referral conversion rate• Applicant conversion rate• Interview conversion rate• (First) offer acceptance rate • Ratio of contractors to full-time

staff

• Share of new hires receiving top performance rating

• Management accountability for the quality of new hires

• Share of new hires leaving the organizations within 6 months

• Employee tenure by sourcing method

• Poor quality hire rate

On-Boarding & Orientation

• Cost of on-boarding process • Employee / Manager satisfaction with on-boarding process

• Share of employees with basics in place day 1 (phone computer, etc)

• Time to efficiency for new hires

• Management accountability for on-boarding process

• Retention of new hires

Retention

• Cost of recognition practices• Average termination cost • Cost of turnover • Compensation impact of

replacement hires

• Employee satisfaction with recognition practices

• Recognition rate of the employment brand by critical workforce segments

• Number of lateral moves within a business unit

• Number transfers between business units

• Time to fill positions with internal transfer

• Share positions filled with internal candidates

• Number of recognition awards granted

• Voluntary turnover rate (by department, level, workforce segment)

• Retention of high performers• Retention of critical segments • Leadership stability rate• Accession rate • Percentage of referral hiring

client x Case – use in Roadmap Section

Potential Talent Management Metrics – Client Example

Example


Align HR Services


Define Value1. Understand business

strategy2. Define HR strategy3. Identify HR’s primary

performance levers

Deliver Value7. Establish a delivery model for HR services8. Upgrade the company’s HR capabilities9. Continuously improve HR operations10. Communicate the value of HR services

Align HR Services4. Assess HR Function5. Design HR services

HRStrategy

DeliverValue


Assessing your HR Function

26



HR Maturity Assessment

• We have developed an HR Maturity Model to meet this objective.

• The HR Maturity Model captures our views on leading practices for talent management, as well as for each of the key elements of our HR service delivery model: HR strategy, HR customers, HR roles, and HR enables.


Deloitte Global HR Maturity Tool Dimensions

Talent Maturity HR Strategy & Service Delivery Maturity

• Talent Strategy & Plan• Talent Metrics• Talent Geographic Reach &

Diversity• Attraction• Development• Retention• Work Environment• Innovation• Employer Brand & EVP• Talent Governance &

Leadership• Talent Infrastructure• Talent Attitudes & Culture

HR Strategy Alignment• Business Strategy Impact• HR & Talent Strategy Alignment• Business Alignment• Customer Segmentation• HR’s Role in Key Talent Decisions• HR Planning Effectiveness• HR Metrics• HR Capability • HR Enablers (e.g. Policy, Process,

Governance, Reporting & Technology)• HR Credibility

HR Customer Segmentation • Employees • Managers• Executives• Non-Employees• Applicants• Retirees

HR Service Delivery Roles• Business Partner• CoE• SSC• Outsourcer• Vendor Manager

HR Service Delivery Enablers

• Processes• Procedures, & Compliance• Integrated Technologies• HR Portal & Self-Service• Reporting & Analytics• Governance, Service-Level Agreements

(SLAs) & Metrics


Talent Maturity ModelDEVELOPING BASIC PROGRESSING ADVANCED MARKET LEADING

STRATEGY & PLANWe do not have a talent strategy or our

talent strategy is in development or under revision

Our talent strategy and our organization’s strategy are aligned

Our talent strategy is an essential component of our organization’s strategy, without it our business strategy would be

incomplete

Our talent strategy and our organization’s strategy are seamlessly integrated and

directionally consistent

Our organization’s strategy is informed and influenced by our talent insights and

predictions

METRICSWe have a small number of talent-

focused metrics that provide us with some of the information that we require

We have a set of talent-focused metrics in place, however we are not sure of what

we invest in talent and what our overall return is

We know how much we invest in our talent, although it is not always clear what

return we get for that investment

We know how much we invest in our talent and we know what return we get for

that investment

We make informed business decisions about where to place our talent

investments, and are able to predict the returns that we will get

GEOGRAPHIC REACH & DIVERSITY

We have a local focus on talent and limited diversity

We have a regional / national talent focus and are making some progress on our

diversity agenda

Our approach to talent has an international dimension to it and we have made significant progress on our diversity

agenda

The global diverse talent market is of value to us today

We take full advantage of the global diverse talent market today, and we are

well positioned to continue to do so in the future

ATTRACTIONWe consistently face challenges in

attracting the talent we need to achieve our organization’s goals

We sometimes find it difficult to attract the talent that we need to achieve our

organization’s goals

We are able to attract some of the talent that we need, some of the time to achieve

our organization’s goals

We are able to attract most of the talent that we need, most of the time to achieve

our organization’s goals

We are always able to attract the talent that we need, when we need it, and in the

quantities required to achieve all our organization’s goals

DEVELOPMENTWe are evaluating which talent and

leadership development programs to invest in

Our talent and leadership development programs exist in pockets and are often

tactical in nature

We have a number of significant talent and leadership development programs

that are coordinated across our organization

Our talent and leadership development programs are highly inter-connected and

have beneficial effects on our talent

Our talent and leadership development programs deliver all the benefits that both

our organization and talent demands

RETENTION We typically struggle to retain our talentWe can retain some of our talent some of

the time We can retain selected talentWe can retain most of our talent most of

the timeWe are able to retain our talent all of the time and proactively manage turnover

WORK ENVIRONMENT

There are ways that we could improve our working environment to support our

mandate and meet the needs of our talent

We have structured and organized our working environment to support our mandate and meet the needs of our

talent

Our working environment is flexible and adjusts to meet the evolving needs and desires of our talent while continuing to

support our mandate

The way that we are structured and organized enables us to maximize the

contributions that our talent makes to our mutual success

We put our talent at the heart of our organization, our talent itself drives how

we are structured and organized

INNOVATIONOur talent initiatives are rudimentary in

nature, but we are considering implementing some innovative ideas

We have implemented a number of innovative talent focused initiatives

We continue to evolve and improve our talent management approach – often we build on what has worked well in other

organizations

We regularly compare our approach to managing talent with other organizations

and we typically remain ahead of our competitors

We are originators of industry leading talent management thinking and best

practices – our competitors typically copy what we do

EMPLOYER BRAND & EMPLOYEE VALUE

PROPOSITION

We are beginning to develop our employer brand and define our employee

value proposition

We proactively manage our employer brand and have a well defined employee

value proposition

We are an employer of choice and have a clearly articulated and supported

employee value proposition

We are the leading employer of choice for the talent that we need now

We are able to adjust our employer brand and employee value proposition to meet

our evolving organization and talent requirements

GOVERNANCE & LEADERSHIP

Our HR function is responsible for all the talent initiatives in our organization

Our HR function typically leads our talent management initiatives, with input from

senior executives

Our talent initiatives are sponsored by senior executives, and are implemented within a common governance structure

Talent is a significant and regular item at our executive and board meetings, we use agreed protocols to facilitate our

decision making

Our executives eagerly devote substantial amounts of their time to talent, in addition their rewards are also directly

linked to talent KPIs

TALENT INFRASTUCTURE

We have limited talent systems, processes and service delivery capability, though we are beginning to identify some

initiatives to rectify this

We have a handful of tactical talent systems, our processes are being developed and our service delivery

capability is evolving

We have most of the talent systems, processes, information and service

delivery capability that we need

We have a full suite of efficient, effective and integrated talent systems, processes,

information and service delivery capability

Our talent systems, processes, information and service delivery

capability are flexible and have industrial scale capacity

ATTITUDES & CULTURE

Some of us believe that the management of talent is important to the success of our

organization

As an organization we believe that the management of talent is important to the

success of our organization

Talent management is embedded in our ways of working

Successful people in our organization generally have a talent mindset

Talent management is in our organizational DNA


HR Strategy Alignment Maturity ModelDEVELOPING BASIC PROGRESSING ADVANCED MARKET LEADING

ORGANIZATION STRATEGY IMPACT

Our HR leadership is not involved in organization strategy formulation or

execution planning

Our HR leadership is asked to help create plans to execute on our

organization’s strategy

Our HR leadership has some involvement in organization strategy

formulation and is an active participant in execution

Our HR leadership is actively involved in organization strategy formulation and

execution

Our HR team leadership has an equal voice at the table in overall organization

strategy formulation and execution

HR & TALENT STRATEGY ALIGNMENT

We have an HR strategy but no articulated talent strategy

We have an HR strategy but it is not clearly aligned to our Talent and

Organization strategies

We have both a Talent strategy which outlines the organization’s talent needs and an HR strategy that details how HR

will deliver organization requirements

Our HR strategy articulates how we will deliver on the organization’s talent

strategy

Our HR strategy and our talent strategy are seamlessly integrated and

directionally consistent in supporting the organization’s strategy

BUSINESS ALIGNMENT

We do not have a clear understanding of the overall organizational value chain and

how people add value

We have a general understanding of the overall organizational value chain but

cannot clearly articulate how people add value

We are beginning to be able to articulate how people add value in the overall

organizational value chain, and use this to shape our overall HR & Talent strategies

We use our deep understanding of the overall organizational value chain and how people add value to guide our HR & Talent

strategies

We use our deep understanding of the overall organizational value chain and how

people add value to identify and createtargeted HR & Talent strategies for critical

workforce segments

CUSTOMER SEGMENTATION

Our HR activities do not target different customer segments and we do not measure customer service levels

Our HR activities do not target different customer segments, but we do measure

customer service levels

Our HR strategy does identify different target customer needs; we measure

customer service levels for most HR roles and services in our organization

Our HR strategy and service delivery reflect a higher investment in the most

critical customer groups and we measure customer service more rigorously among

these customers

Our most critical customer groups receive higher investment; we ensure our top HR talent is focused on delivering service to

them

HR’S ROLE IN KEY TALENT DECISIONS

Our HR team learns about key talent decisions and actions after the action is

taken

Our HR team is asked to execute on talent decisions after a decision is made

by the organization

Our HR team provides the business guidance on some talent decisions (e.g.,

terminations, recruiting)

Our HR team is a sought after advisor for all key talent decisions

Our HR team proactively identifies talent issues and facilitates business decision

making

HR PLANNING EFFECTIVENESS

We react to issues as they arise, with no formal process or tools for assessing HR

priorities

We create an HR budget at the start of the year based on a high level view of

priorities

We have a rigorous process for assessing HR priorities and impact on the

organization and our budget is built on outcomes of the process

Organization and other functional leaders provide input in our process for assessing

HR priorities and provide additional budget

Our process of assessing HR priorities includes predictive analytics and

measures of ROI to inform our decisions

HR METRICS We have very limited HR metricsWe have some HR metrics, primarily

focused on outputs vs. leading indicators (e.g., retention, offer acceptance)

We have a balanced scorecard for HR that includes financial, customer service, process efficiency and innovation metrics

Our balanced scorecard for HR includes organization metrics in addition to HR

metrics, and predictive analysis of metrics is used in HR planning

Key talent/HR metrics are part of the overall organization scorecard, and

predictive analysis of metrics is used in organization planning

HR CAPABILITYThere are significant gaps in HR

capability required to deliver on our HR activities

We have most of the HR functional capability that we need, but there are still

some HR functional gaps

We have identified critical HR capabilities and have most that we need, but there are still some business capability gaps

(e.g., business acumen, analytical skills)

We have a career development rotation program in place to rotate HR talent between Business Partner, Center of Expertise and Shared Services roles

We have a career development rotation program in place to rotate talent between

HR and business roles

HR ENABLERS (e.g. Policy, Process,

Governance, Reporting & Technology)

We do not take a coordinated approachto enabling our HR service delivery

through policy, process, governance,reporting and supporting technology

We are have the basics in place to enable HR service delivery, but we are

lacking in consistency and more advanced capabilities

We are beginning to adopt a systematic perspective on HR enablement, however do not always adjust the appropriate HR

enablers when changes are made

We have a systematic perspective on HR enablement and look to adjust the

appropriate HR enablers when changes are made

We take a proactive approach to continuously improving service delivery through the adoption of leading practices

in HR enablement

HR CREDIBILITYHR has low credibility in the organization,

and is viewed only as a back office function

HR has some credibility in the organization and is viewed as capable of

providing technical expertise in some areas of HR

HR has high credibility as an expert in functional HR areas

HR has high credibility both in functional HR expertise and ability to contribute to

organization success

HR leaders are considered strong candidates for succession to broader

organization leadership roles


HR Customer Segmentation Maturity ModelDEVELOPING BASIC PROGRESSING ADVANCED MARKET LEADING

EXECUTIVESWe rarely interact with customers

at the executive level

We react to infrequent requests for information from Executives,

typically regarding compensation matters

We are beginning to work more frequently with executives on a

broader range of HR/talent matters

Our HR leader is a member of the executive team and we work

proactively with the executives to address business issues

Talent is a regular topic at executive meetings, and HR

proposes key issues and solutions proposed for discussion

MANAGERSWe respond reactively to requests from managers on a limited set of

HR/talent issues

We react to a fairly broad set of talent requests from managers, but

provide few customized services and service delivery options for

managers

We proactively work with managers on a fairly broad set of HR/talent

requests, but still provide few customized services and service

delivery options

We are viewed as partners in addressing most HR/talent issues,

and we provide customized HR services for managers and tailored

service delivery options

We are viewed as partners in addressing most HR/talent issues, and we have built significant talent management capability among our managers to handle most issues

EMPLOYEES

Employees are our primary customers and we provide basic, ‘one size fits all’ HR services and support through face-to-face and

phone interactions with generalists/HR Business Partners

(BPs)

We treat employees and managers as distinct customers, but continue

to deliver ‘one size fits all’ HR services and support through face-to-face and phone interactions with

generalists/HR BPs

We offer ‘one size fits all’ employee service through shared service centers and limited self-service

options; employees can still access information through generalists /

HR BPs

We offer tailored employee services for critical employee segments, with

broad shared services and self-service options; employees must use these channels for inquiries

and transactions

We are pioneers in creating innovative self-service options for

our employees, with sophisticated, branded employee portal

technologies; our employees do most transactions through self-

service

NON-EMPLOYEES (i.e. Contractors)

HR does not manage contractors or other ‘non-employees’ and does not

know what relationships are in place throughout the organization

HR does not manage contractors or other ‘non-employees’, but we do

track relationships with them through manual processes

We have tailored processes and policies in place to manage contractors and other ‘non-

employees’ and HR provides support to the organization in

execution

We have a strategy in place for the effective utilization of contractors or other ‘non-employees’ vs. regular employees and partner with the

organization in execution

We proactively partner with the organization to consider

alternatives to optimize our use of regular and contract or ‘non-

employee’ workforce

APPLICANTSWe do not have processes in place

to effectively manage applicants

We have varied processes in place to track and manage applicants, but

accountability is not clear and the processes are not supported by technology and are cumbersome

Our automated application process and tracking capability allows us to be responsive to all applicants, but

our technology is not linked to HRMS requiring duplicative data

entry upon hire

We treat applicants as an important customer segment, developing relationships and leveraging our

technologies to effectively manage the process

We leverage our sophisticated technologies to target new sources

of applicants, strengthen relationships, and manage our

sourcing, selection and new hire processes effectively and efficiently

RETIREESWe provide ad hoc support to

retirees as required

We provide support to retirees as required through centralized

internal or outsourced vendor support for pension and other

questions and transactions

In addition to providing support for questions and transactions, we

provide access to retirees to organization portals for information

In addition to providing support for questions and transactions, we proactively communicate with retirees regarding organization

updates

We treat retirees as a potential contributor to our ongoing success,

delivering high quality service to meet their needs and providing a

channel for them to provide innovative ideas, candidate

referrals, etc.


HR Roles Maturity ModelDEVELOPING BASIC PROGRESSING ADVANCED MARKET LEADING

HR BUSINESS PARTNERS (BP)

Our HR business partners (BPs) are generalists who spend the

majority of their time processing administrative activities and responding to employee or

manager inquiries

Some of our HR BPs are developing relationships with

leaders which allow them to have greater impact; however, most still spend a significant amount of time

on administrative activities

The majority of our HR BPs are developing relationships with

leaders which allow them to have greater impact; however, most still

spend 30-50% of their time on administrative activities

Our HR BPs are senior resources who focus their time on providing

coaching and advice on talent issues and opportunities to leaders

and are rarely involved in day to day administrative activities

Our HR BPs are strategic advisors who provide coaching and advice to leaders on both talent and broader business issues; many of our HR BPs come from line roles in the

organization

CENTERS OF EXPERTISE (CoE)

We have HR technical specialists but they are not organized in

Centers of Expertise (CoE) and may not have the depth or breadth of expertise we need to support the

organization’s needs

We have some CoEs which focus on developing policies and

programs based on HR expertise vs. in depth understanding of the

organization’s needs

Our CoEs develop new programs and policies to support the

organization’s needs based on input from our HR BPs, and our

leaders and employees

We have leading edge capability in some of our CoEs which focus on developing innovative solutions to

our most challenging organizational needs and our CoE talent has strong consulting and change

management skills

We have leading edge capability in all our CoEs and frequently assess

their focus to ensure we are supporting the most pressing

organization needs; our HR talent rotates through CoE, HR BP and

line roles in our organization

SHARED SERVICESWe do not leverage HR shared

services in our organization

We leverage limited shared services capability, primarily with

respect to payroll and benefit administration processing and

limited employee inquiry capability

We leverage shared services to support multiple HR processes,

including transaction processing, employee and manager inquiries,

and some advisory services

Our shared service organization leverages leading edge workflow,

case management and self-service technologies to optimize efficiency

and enhance effectiveness; we have well defined performance

indicators and service level agreements

Our shared services organization delivers with leading efficiency,

effectiveness and cost metrics; we are frequently approached by other

organizations to share leading practices in shared services

OUTSOURCERWe may currently outsource

specific services, but have no overall strategy for outsourcing

We currently outsource specific services, and did complete a

sourcing analysis before making the decision to outsource

We have developed an overall sourcing strategy for HR, assessing

benefits and challenges of outsourcing several HR processes

Our sourcing strategy included an assessment of full outsourcing of our shared services capabilities

We monitor changes in the outsource service provider market and benchmark our internal shared service capability or our outsourced

services to ensure we are leading edge

VENDOR MANAGER

We do not have vendor management capability in HR and

have limited access to vendor management capability in other

functions of our organization

We have limited vendor management capability in HR or

other functions in our organization, but no formal accountability exists

for management of HR vendors

We have clarified accountability for management of HR vendors within

HR or other functions in our organization, with support for

negotiation and management of contracts

We have built sophisticated vendor management capability in HR or

other functions in our organization to ensure we optimize our vendor

relationships and services provided; we have created an overall vendor management strategy and carefully

manage our SLAs

We effectively manage large outsource relationships as an

integral component of our overall HR service delivery model and

governance structure; our organization and our vendors both

benefit from enhancements in service delivery


HR Enablers Maturity ModelDEVELOPING BASIC PROGRESSING ADVANCED MARKET LEADING

PROCESSESWe do not have any global

processes; we have little or no documentation of local processes

There is significant local variation in process; process documentation is

held locally and is not easily accessible

There are some global processes, with some local variations; process

documentation is centrally held

We have global processes with minimal local variations; processes are held centrally and are readily accessible, and metrics for each

process are defined

We have a clear process architecture, with Six Sigma

compliant process documentation; global processes with minimal local variations are held on an accessible

knowledge base

POLICIES & COMPLIANCE

We have not documented any of our HR policies and they are very

diverse across sites, units, entities, countries, etc.

We have documented some of our more ‘global’ HR policies and

procedures; however, most of our policies are inconsistent across our

organization

There are some global policies, with some local variations; policy

documentation is centrally held

We have global policies with minimal local variations; policies are

held centrally and are readily accessible; the resulting impact on further process standardization and

automation is limited

Our HR policies and procedures are globally consistent, up-to-date,

and can be easily accessed electronically; corporate HR takes a

proactive role in driving harmonization enabling further

standardization and automation of processes

INTEGRATED TECHNOLOGY

We do not use a comprehensive HR technology platform and data is not maintained in a central location

We have an HR technology platform to manage personnel

administration but do not use all functionality or it does not

adequately meet the needs of the organization

We have a strong HR management system (HRMS) with some basic workflow but no Optical Character Recognition (OCR) functionality in

place

Our HRMS supports the main people priorities of the organization and goes beyond administration to include functions like Recruiting or

Performance Management; there is some enhanced workflow and basic

OCR functionality in place

We have a fully functioning, robust HRMS that includes all modules (i.e. Organization and Positions,

Recruitment, Compensation, Benefits, Talent Management,

Payroll and Time, and Learning); workflow and OCR functionalities

are fully leveraged

HR PORTAL & SELF-SERVICE

We do not have an HR portal, self-service functionality or HR

knowledge base

We have an HR knowledge base that is paper-based; we do not have

an HR portal or any self-service functionality

We have a basic HR portal in place with basic self-services and the

functionality for downloading and printing online forms for a wider

range of processes; the HR knowledge base is not linked to

portal

We have an HR portal that is integrated with robust employee

and manager self-service (ESS and MSS) functionality and the HR

knowledge base

We have an enhanced HR portal that includes a wide range of self-service and workflow functionality

using advanced technology such as interactive forms; the knowledge

base is completely integrated

REPORTING & ANALYTICS We do very limited HR reporting

Our reporting is heavily manual with few standard reports defined

Our reporting is transactional based (e.g. annual hires, annual turnover,

etc); there is some automation however data and interpretation

inconsistencies make it difficult to ensure full transparency,

comparability and controllability across the organization

Our reports are extensively automated and provide analytical

insight (e.g. period over period trending, integrating external data

sources into workforce analysis and vice versa) to drive management

decisions

We focus reporting on generating insight rather than numbers, and make standard reports available electronically, secured by portal roles; consistent and centrally

available data is used for predictive and truly differentiating reporting

GOVERNANCE, SLAs & METRICS

We do not have HR governance structures or metrics in place

We have informal HR governance structures and metrics but they are

not clearly articulated

We have some formal HR governance structures and metrics

but their mandates are not clear

Our HR governance structures are well defined and are followed most of the time and metrics are in place to assess overall HR efficiency and

effectiveness

We have a cohesive HR governance structure with clearly defined roles and responsibilities and an HR scorecard is in place

that links to the overall organization metrics


Deliver Value


Define Value1. Understand business

strategy2. Define HR strategy3. Identify HR’s primary

performance levers

Deliver Value7. Establish a delivery model for HR services8. Upgrade the company’s HR capabilities10. Communicate the value of HR services

Align HR Services4. Segment stakeholders5. Prioritise HR

investmentsHR

Strategy

DeliverValue


Establish and Re-assess HR Service Delivery Model

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Deloitte HR Service Delivery Framework

Ensure HR service delivery model is aligned to deliver effectively on Business & HR Strategies.

Review Customers to determine if unique HR requirements exist for different customer segments.

Assess how effectively service is being delivered through retained and outsourced HR Roles

Evaluate the effectiveness of Enablers that HR can leverage to deliver efficient and effective service.

Traditional ‘Ulrich’ model was used to describe the high level, basic relationships and players in the transformed HR organization, showing how the three building blocks of Shared Services Operations, Business Partners and Centres of Excellence interacted with managers and employees.

HR Service Delivery Framework (mid-90’s)

Service Delivery Models - Leading PracticesThe Evolution of HR Service Delivery


The building blocks that make up the four key roles in the operating model are Group HR, CoEs, SSC and Business Partners

Represents HR at the Exco level. Group HR is the business partner to the Exco. Sets the tone and pace of the HR strategy, in line with the Group business strategy. Owns the maintenance of the strategic framework for the CoEs to develop the HR policy blueprint. Responsible for managing succession planning and HR issues for Exco -2.

Group HR

Centres of Expertise

Designs and develops deep technical capability in areas of HR that drive strategic agenda. Innovates, designs and develops HR strategies, policies and processes in line with latest industry thinking. Provides expert guidance to HRBPs and senior executives in the SBUs/Divisions. Resolves complex issues escalated from the Shared Service Centre and HRBPs.

Shared Services

Provides standardised, consistent, accurate, fit for purpose transactional and functional expertise to HR, delivering high quality, efficient administration for all HR transactions.

Customer-focused contact centres providing the first point of call for employees and managers for advice, guidance and query resolution.

Responsible for continuous improvement of delivery of HR processes and technology utilisation by HR.

Business Partners

Drives the strategic people issues, aligning group and SBU/Divisional HR strategies. Provides SBU/division with local geographical input for Group policy blueprint development. Acts as a business consultant maximising the value talent brings to the SBU. Manages SBU/country-specific HR issues but does not perform local transactions. Provides input to the prioritisation of HR-owned business projects, providing subject matter expertise to HR projects

and acting as the change management agent.

Service Delivery Models - Leading PracticesThe Four Building Blocks


Service Delivery Models - Leading PracticesService Provision

Group HR Centre of Expertise Shared Services Business Partners

Group HR• “Owns the skills

development, succession planning and career planning of HR professionals”

Group HR provides the CoE with the framework for developing HR policies that enable the execution of the corporate HR strategy

Provides the cohesiveness for the CoE teams to work together to deliver the strategy in an aligned way

Group HR ensures the HR service delivery model operates effectively, ensuring clarity of roles and responsibilities in the delivery of all HR services

Provides BPs with a framework for the consistent execution of the BP role, within the dynamics of different SBU/Divisional cultures and environments

Owns succession planning working with BPs who manage the talent pipeline

Centre of Expertise• “Internal Consultants to

the business”

The CoE provides expert input into the development of the corporate HR strategy by Group HR

The CoE owns the end-to-end processes for HR delivery, integration between processes and provides guidance to the SSC for continuous improvement in HR process delivery

Resolves complex issues escalated from the SSC

The CoE provides strategic consulting support to the BPs, advising on complex and strategic people-management issues and provide guidance on the use of HR policies and tools to meet the business’s needs

Shared Services“Delivers high quality and efficient HR services to managers and employees, maximising self-service and emulating the brand in the way it delivers customer services”

SSC provides the appropriate HR services support requested by Group HR, for example administration of HR issues

The SSC operationalises strategies and policies developed by the CoE, operating efficient high quality processes and providing front line support to managers and employees

SSC delivers high quality and efficient HR processes to the SBU to agreed SLAs, liaising with Business Partners to ensure customer satisfaction

Manages queries form managers and employees

Business Partners“The face of HR to the business”

BPs provide input to Group HR on the current and future needs of the business from HR, along with direct and indirect feedback on customer satisfaction with HR service delivery

BPs provide guidance to CoEs on the strategic direction and priorities of the business including future needs

BPs act as a conduit between the business and CoEs translating business priorities and needs

BPs act as a conduit between the business and SSC, interpreting customer needs and feedback “from the coal face”, managing the performance expectations of the business and SSC

Resolves complex queries escalated from the SSC

This matrix summarises the relationship each team within the model has with the other HR teams, and some of the key responsibilities.

P R

O V

I D

E S

S

E R

V I

C E

S

T O

…

R E C I P I E N T O F S E R V I C E S F R O M …


Service Delivery Models - Leading PracticesThe Business Partner Role Assumptions / Attributes

Business Partners Role Business Partners do:

Work with Business Unit to translate business needs into HR requirements and working environment

Identify the organizational capabilities required to execute the business strategy

Acts as a consultant most frequently on issues related to strategy execution and change, talent management, employee engagement, performance management, employee relations

Responsible for implementing initiatives at the business unit level and may support the design of specialized or customized training, communications, and recruiting

“Broker” of services between specialized internal groups (e.g. Total Rewards) and the business

Collaborate with Centers of Expertise to create innovative HR solutions

Provide feedback to Centers of Expertise about HR solution effectiveness

Support culture change taking direction from the business leadership

Develop the leadership and manage the talent pipeline in the Business Unit

Analyze and investigate business / people issues and trends within the bank

Deliver HR services in line with business needs

Focus on consultative support and HR solution delivery to senior line management

Challenge the business in order to ensure aligned and integrated people strategy, and fair people management

Support all HR products and services, including any required changes and ensures client complies

Coach line managers in people management

Ensure effective execution of HR policies and processes in their business

Ensure compliance with local legislation and regulatory requirements

Interact with the Workers’ Council on individual issues

Business Partners Attributes Business Partners don’t:

Client relationship management People strategy development Contracting/stakeholder management Influencing Business acumen Consulting Resource management Policy implementation/ communication Negotiation Conflict resolution Change management Marketing Business planning Program Management Analytical skills (Interpret reporting)

Support line managers and employees in day-to-day administration Execute design and development of HR programs, procedures or policies Manage employee data Report on workforce-related data Resolve individual EE queries; have non-managerial employees as clients Undertake people management responsibilities on behalf of line managers Interact with the Workers’ Council on group issues

Capabilities

Facilitating organization change

Business acumen

Client service delivery

Organizational design

Consulting

Personal and professional impact

Coaching and influencing


Service Delivery Models - Leading PracticesThe CoEs Role Assumptions / Attributes

CoEs Role CoEs do:

Provide expert solutions and services to the Business Units, across the whole of the enterprise

Customers of the CoEs are typically the BP. May also be contacted by the business and / or contact the business themselves

Keep appraised of leading practices, monitor and evaluate future legislation and market trends in their areas of specialty

Align the innovation agenda with the needs and directions of the SBUs/divisions

Develop and deploy innovative HR policies, products and processes and create strategy, policy, programs, and tools for local implementation

Align policies and solutions across the enterprise as appropriate

Collaborate with each other to deliver comprehensive solutions to the Business Partners

Monitor solutions, vendors, SSC processing, and employee feedback to drive continual improvement

Act as the final escalation point for advice on customer queries, transactions and requests that the SSC cannot resolve

Lead the development of product strategy

Partner BPs in consulting with the business to create innovative solutions when standardized products are not sufficient

Provide subject matter expertise, advice and guidance to BPs and HRS

Support functional specialists in the resolution of complex technical queries and the delivery of streamlined products and services

Research and develop / source best solutions and new concepts with respect to people management, products and services

Coordinate and work with results of internal and external benchmarking to create and share pools of best practice

Design organizational metrics for CoE products and interventions when weaknesses are detected

Partner with HRS when developing new products to ensure effective deliverability

Communicate product changes and updates to BP and HRS

CoEs Attributes CoEs don’t: Subject matter expertise Content strategy development Solution design Policy development Innovation Advisory Consulting Contracting /stakeholder management Matrix management Market intelligence/ best practice (push) Business understanding at Organisational, Regional, Divisional level Metric definition e.g. org effectiveness and product impact Analytical skills (Interpret reporting) Quality and risk management

Undertake operational administrative processing Manage and administer data Manage and perform any operational transactions Consult in systems and administrative process design and development Manage services vendors Interact with employees on day-to-day matters Get involved in the execution of HR policies

Capabilities

Facilitating change

Innovation

Personal and professional impact

Business acumen

Thought leadership

Consulting skills

Client focus


Shared Services Role Shared Services do:

Provide administrative support for the rest of HR, including:

Manage and process HR transactions (e.g., pay changes, performance management) and provide any retained administrative/ transactional process support

Produce outputs (e.g., standard letters, changes in terms/conditions)

Maintain employee data

Serve as single point of contact for HR queries and requests (when questions can not be answered through self-service)

Resolve queries and requests and escalating to other HR areas as appropriate

Liaise with HR Business Partners and Centers of Expertise to achieve resolution of customer’s queries and requests

Have performance management processes, metrics and vendor management to ensure continuous improvement

Control operational cost and quality

Are governed by service level agreements that meet the needs of the Business Units

Use technology to support customer contact

Provide first point of contact for the provision of employee and manager advice, guidance and query resolution

Significantly reduce HRBP and CoE involvement in routine administrative tasks and inquiries

Provide answers to basic and more complex inquiries

Focus on solution delivery and execution

Perform organizational and data analytics and quality management

Support problem solving, case management and issue resolution

Deliver commoditized products and standardized services

Deliver and maintain self service offerings

Monitor HR compliance

Have specialist expertise e.g. Payroll, training

Have responsibility for implementing necessary changes process changes in partnership with global process owner

Process HR transactions

Shared Services Attributes Shared Services don’t:

Customer service

Transactional processing

Policy measurement/ metrics tracking

Reporting e.g. provision of reports

Technology efficiency improvement

Process efficiency

Cost effectiveness

Management of consistent delivery of services

Vendor management

Query resolution

Analytical skills (KPIs)

Contracting /stakeholder management

Work with managers in solving business challenges

Allow deviation from agreed standard processes and procedures

Service Delivery Models - Leading PracticesThe Shared Services Role Assumptions / Attributes


Key steps in delivering value through HR

1. Continuously improve HR operations Implement robust systems and leading practices to deliver HR services Establish appropriate service levels and performance targets Maintain a competitive cost structure relative to industry benchmarks Implement Lean Sigma or other continuous improvement methods to help improve operational excellence

2. Communicate the value of HR services Understand the value of HR services Develop execution plans for specific constituencies Implement an integrated communication process and obtain feedback Create an innovative brand statement and/or logo that helps reinforce the HR value proposition


Conclusion

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Conclusion

1. Understand the Business2. Define your Strategy3. Build Measures4. Assess Current 5. Re-evaluate how HR is Delivered6. Communicate


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Documents

fairly broad

minimal local

hr knowledge

leading edge

service delivery

service delivery

critical hr

critical workforce