SABPP - IITPSA - 15 OCT 2013

PEOPLE MANAGEMENT, HUMAN CAPITAL AND

TECHNOLOGY:

Integration, Alignment and Optimisation

Marius Meyer

15 October 2013

[email protected]

@SABPP1

IBM CEO Study 2012:

Factors impacting organisations

1 Technology factors (71%)2 People skills (69%)3 Market factors (68%)4 Macro-economic factors5 Regulatory concerns6 Globalisation7 Socio-economic factors8 Environmental issues9 Geopolitical factors

IBM CEO Study 2012

Technology revolution

Most important organisational

capabilities over the next five years

IBM: Working beyond Borders

31%

33%

34%

37%

28% 30% 32% 34% 36% 38%

Innovation

Client connectivity

Execution speed

Leadership

HR Talent Management

“Quite possibly the biggest challenge that needs to occur in

HR has to do with talent management – not elsewhere in

organisations, but how talent management in HR is a case of

the shoemaker’s children lacking shoes. Our results suggest

that HR often doesn’t have the right talent; all too often it has

talent that is inferior to the talent in other parts of the

organization.”

Ed Lawler III & John Boudreau (2009)

Achieving Excellence in Human Resources Management, Stanford University Press

SOUTH AFRICAN HR COMPETENCY MODEL

STRATEGY

TALENT MANAGEMENT

HR GOVERNANCE, RISK, COMPLIANCE

ANALYTICS & MEASUREMENT

HR SERVICE DELIVERY

5 HR

CAPABILITIES

LEADERSHIP & PERSONAL CREDIBILITY

ORGANISATIONAL CAPABILITY

SOLUTION CREATION & IMPLEMENTATION

INTERPERSONAL & COMMUNICATION

CITIZENSHIP FOR FUTURE: INNOVATION, TECHNOLOGY, SUSTAINABILITY

CO

RE

CO

MP

ET

EN

CIE

S

HR & BUSINESS KNOWLEDGE

DUTY TO SOCIETY

ET

HIC

S

PR

OF

ES

SIO

NA

LIS

M

4

PILLARS

Comfort zone challenged

Use of workforce

analytics remains limited

IBM: Working beyond Borders

0% 10% 20% 30% 40% 50% 60%

Developing future leaders

Developing strategy linked to business strategy

Allocating the workforce across the organisation

Developing workforce skills and capabilities

Sourcing, recruiting and onboarding individuals fromoutside the organisation

Retaining valued talent within the organisation

Evaluating workforce performance

Enhancing workforce productivity

Measuring collaboration and knowledge sharing acrossthe organisation

29%

28%

35%

30%

40%

38%

40%

39%

14%

26%

25%

23%

22%

20%

19%

15%

14%

5%

Can identifyhistoricaltrends andpatterns

Can developscenarios andpredict futureoutcomes

Use of HRIS

What is the business problem?

“A business running without accurate data is

running blind.”

Ash Mahmud, Head of CRM: Groupon

What is the HR problem?

An HR function running without accurate data

is running blind.

Effectiveness of talent management

system

Revenue per full-time employee

1%

24%

16%

12%

2%

23%

4%

3%

15%

0% 5% 10% 15% 20% 25% 30%

R0

> R100 000

R100 000 to R1 million

R1 million to R 10 million

R10 million+

Don’t measure/Don’t know

It’s confidential

?

Not applicable

Cost of labour as a % of revenue

9%

7%

12%

7%

9%

14%

11%

25%

4%

2%

0% 5% 10% 15% 20% 25% 30%

> 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

61 - 70%

Don’t know/Not applicable

Not done

Too confidential

Absenteeism rate

34%

31%

35%

29% 30% 31% 32% 33% 34% 35% 36%

Don't know

Don't measure

Indicate absenteeism rate

LTO rate

35%

21%

44%

0% 10% 20% 30% 40% 50%

Don't know

Don't measure

Indicate LTO rate:

Importance of measurement

for HR

“If you can’t measure it, you can’t manage it.”

Operational Management Consistency in the

Management of People

One of the toughest things to be is consistent

468 HR Leaders developing

HR Standards for South Africa

HR Standards Facilitators

Kate Dikgale-Freeman Michael Robbins Linda Chipunza

BUSINESS STRATEGY – HR BUSINESS ALIGNMENT

StrategicHRM

TalentManagement

HR RiskManagement

HR ARCHITECTURE

HR VALUE & DELIVERY PLATFORM

Work-force

planningLearning

Perfor-mance

RewardWell-ness

ERM OD

HR Service Delivery

HR Technology(HRIS)

Prepare

Imple-ment

Review ImproveHR MEASUREMENTHR Audit: Standards & Metrics

H R

C O

M P

E T E N C

I E SSABPP HR SYSTEM STANDARDS MODEL

IT skills for HR

Towards National HR Metrics• % of people meeting performance contracts

• % of outstanding performers

• Average time to resolve people issues

• % of payroll spent on training

• Training spent per employee (costs/FTE)

• Total amount spent on employees

• Number of training hours per employee (year)

• % of key positions with successors

• Vacancy rate (vacancies/headcount)

• Absenteeism rate (sick days/FTE)

• Labour turnover (people left/headcount)

• Diversity/employment equity profile (race, gender, disability)

Key Human Capital Metrics• Revenue per employee (Revenue/FTE)

• Profit per FTE (Revenue-Operating cost/FTE)

• Human Capital ROI (benefits-costs/costs)

• Leadership quality index

• Employee engagement score

• Employee satisfaction score

• Organisation climate score

• Employer of choice index

• Human capital risk index (less than 10% risk)

• HR customer satisfaction score

HR manager’s response to

metrics?

1. Spending on human capitala. Total amount spent on employees (salaries, benefits, taxes) b. Total amount spent in support of employees c. Total amount spent in lieu of employees (contractors, etcetera)d. Total amount invested in training and development e. Total headcount and total FTE (full-time equivalents) at the end of the period

2. Ability to retain talent a. Voluntary and total turnover b. Broken down by subset of EEO-1 job types c. Industry standard formula of (# of terminations during the period) / (average active headcount during the period)

3. Leadership depth a. Percentage of defined positions that have an identified successor b. Percentage of open defined positions filled internally during the period

The basic metrics they propose as

essential for investors to know are:

SHRM (April 2012)

4. Leadership quality a. Index of relevant questions from employee survey b. Information on the response rate and methodology/tool

5. Employee engagement a. Index of relevant questions from employee survey 287b. Information on the response rate and methodology/tool

6. Human capital discussion & analysis (HD&A)a. Narrative to provide context and discussion of the reported metrics b. Disclosure of any material risks or any other material information related to human capital

Note: Organisations may wish to include breakdowns of these metrics by unit or region; it simply depends on what makes sense to the organisation and its investors.

The basic metrics they propose as

essential for investors to know are:

SHRM (April 2012)

L&D Benchmarks (ASTD/SABPP)

BENCHMARK USA RSA CHANGE

Average % payroll 2,24% 3,94% + 0,83

Hours /employee 36 40 - 12

Spend/employee $1068 R 6898 +R 1700

Employees/trainer 253 157 +19

% companies e-learning

31% 43% + 10%

% outsourced 22% 62% +10%

To order the full report contact [email protected]

10 V’s of HR Technology Management

1. Vision

2. Value

3. Variables

4. Variance

5. Variety

6. Validity

7. Verification

8. Velocity

9. Vendors

10. Vulnerability - risks

We are changing with technology

Risk + readiness

SABPP HR Standards & Metrics

Roadmap

PHASE 1:

Manage-ment

System Standard

PHASE 2:

HR Functional standards

PHASE 3:

HR Metrics

PHASE 4:

Integrated Reporting

PHASE 5:

CPD & Support Tools

PHASE 6:

HR integrated in

King IV

2012 2013 2017

HR TECHNOLOGY

DEFINITION

HR Technology is the effective utilisation of the

relevant technological applications and platforms

that makes information both accessible and

accurate, providing HR and line management with

the knowledge and intelligence required for more

effective decision-making, to align all employees

towards the implementation of the organisation’s

strategy.SABPP (2013)

HR TECHNOLOGY

OBJECTIVES12.2.1 To consolidate and rapidly extract relevant data in real time to empower HR for more

effective decision making.

12.2.2 To deliver effective presentation of HR data and info to board or governing body, line

management and executive committee meetings to provide them with intelligent data to

guide their planning, decision-making and management of the workforce with full knowledge

of potential people risks.

12.2.3 To allow easy access to relevant data (real-time, self-service) in compliance with

relevant data security and other information technology compliance requirements, laws,

codes and standards (privacy).

12.2.4 To create more capacity within existing HR structures to deliver value-adding

activities.

12.2.5 To streamline the HR Management System and its associated processes for effective

and efficient use.

12.2.6 To ensure that appropriate information security principles, policies and practices are

developed and implemented.

12.2.7 To enable the effective implementation of change and improvements to the HR

Management System to ensure it remains continually aligned with the organisation’s

objectives.

HR facing technology?

HR TECHNOLOGY

IMPLEMENTATION12.3.1 Formulate an HR Technology policy and strategy.

12.3.2 Analyse and prioritise all the relevant HR categories of data and information.

12.3.3 Forecast future system load/spare capacity.

12.3.4 Design the specification to encompass all the relevant functionality required in the

HR Information System (HRIS).

12.3.5 Define the desired business model – acquire the system as an in-house solution or

utilise an outsource or hosted model.

12.3.6 Upload current and historical data to the system and configure the system to

conform to current business and legislative requirements.

12.3.7 Test the effectiveness of the system on a pilot group of employees prior to rolling out

the full implementation.

12.3.8 Build capacity of relevant staff members to access and use the system.

12.3.9 Ensure continuous process improvements.

12.3.10 Ensure HR-IT policies, practices and procedures are aligned with organisational IT

governance.

12.3.11 Continually monitor and evaluate the effectiveness of the HRIS against changing

business requirements and HR trends in the industry.

HR MEASUREMENT

DEFINITION

HR measurement is a continuous process of

gathering, analysing, interpreting and

presenting quantitative and qualitative data to

measure and align the impact of HR practices

on organisational objectives, including

facilitating internal and external auditing of HR

policies, processes, practices and outcomes.

SABPP (2013)

HR MEASUREMENT

OBJECTIVES

13.2.1 Determine measurement approaches, methodologies and metrics to

assess the effectiveness and efficiency of HR practices.

13.2.2 Identify relevant measurement areas for the purpose of integrated

reporting.

13.2.3 Implement appropriate tools and methods to measure timely the efficiency,

effectiveness and consistency of HR practices across the organisation.

13.2.4 Provide a clear framework for measuring HR impact on the bottom-line of

the organisation.

13.2.5 Develop performance indicators for HR service delivery and business

impact and present to the organisation in an appropriate HR Scorecard

SABPP (2013)

IMPLEMENTATION

13.3.1 Develop an integrated HR measurement and reporting

framework.

13.3.2 Set up management systems and resource the HR function to

collect and report on agreed people management metrics.

13.3.3 Develop and implement an HR scorecard.

SABPP (2013)

13.3.1 Develop an integrated HR

measurement & reporting framework

• Determine key people-related metrics which will assist in

determining progress towards achievement of strategic

objectives.

• Determine additional people related data or info that may

be required to hold line accountable for performance of

teams and determine how reports will be tabled for

management control.

• Ensure that reporting on metrics include normal

organisational management reporting at all levels.

• Demonstrate financial and other forms of impact – enable

forecasting, scenario building, predictions.

• Data collected should enable ROI or Return on

Expectation ratios to evaluate programmes.

13.3.2 Set up management systems and

resource HR function to collect and report on

agreed people management metrics

• Scale and depth of HR measurement and reporting will be constrained

by the resources available.

• Credibility and utility of HR reporting depends on accurate and

complete data capture.

• Control systems including internal and external audits should be in

place to ensure data integrity.

• Careful definition of each metric is important.

• A detailed flow chart should be drawn up to describe data collection,

storage and reporting for each metric.

• One integrated HR data system is recommended.

• Reporting formats should follow the design of other management

reports – clear, simple, visible dashboards.

• Meaningful interpretation of reports requires good knowledge of

organisation and HR practices.

13.3.3 Develop and implement an

HR scorecard

• An HR scorecard selecting key indicators of HR Service

Delivery should be agreed between HR Head and top

management,

• Regular assessment of performance against the

scorecard, in accordance with the normal performance

management process of the organisation, should lead to

identification of areas for improvement and remedial

action.

• Conduct an internal and external audit of the HR function

and people practices of the organisation against the

documented service level agreement, documented HR

practices and HR scorecard.

HR Standards Roll-out

Development(21 May)

Consultation(June-July)

Release(20-21 Aug 24 Oct)

Standards-writing

(100 top HR professionals)

Standards inputs

(100 top HR specialists +

1000 professionals)

Standards finalisation

(450 HR Directors sign-off)

HR Standards conference

The need for consistency and quality

National HR Governance Strategy Alignment

HR Professional Standards:• HRMS (13)• HRMSAS (13)• HRPPS (30+)

HR Products/Services:• CPD• Mentoring• Professional registration• Research• HR Academy – QCTO• Curriculum standards

HR Metrics:• National HR Scorecard• HR Service Standards

HR Auditing:• Internal Audit• External Audit

King IV:HR Governance

ISO: HR

IntegratedReporting

HR Competencies

COMPANY AND

EMPLOYEE DATA

INFORMATION

TECHNOLOGY SYSTEMS

WHAT do we have?

KNOWLEDGE

STANDARDS BENCHMARKING

INTELLIGENCEBusiness; Market; HR;

Industry; Country; Region; World

ANALTYICS AND METRICS

WHY do we have it? WHAT else is needed?

DECISION-MAKING• Strategy

• Interventions

WHAT can we do with it?

I MPLEMENTATION

HOW, WHO, WHEN, WHERE?

EVALUATION

Conclusion

HR standards are needed to improve the

consistency and quality of human capital

management. We need to leverage

technology and measurement for improved

HR practice and business decision-making.

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@sabpp1

Let us build our competence in HR

Measurement and Technology!

[email protected] (Professional Registration)

[email protected] (Professional Services)

[email protected] (Stakeholder Relations)

[email protected] (Research)

[email protected] (Learning & Quality)

[email protected] (Strategy inputs)

[email protected] (Social media)

Website : www.sabpp.co.za Blog: www.hrtoday.me

New office: 8 Sherborne Str, Parktown

Tel: 011 482-8595 Fax: 011 482-4830

Cel: 082 859 3593 (Marius Meyer)