PEOPLE MANAGEMENT, HUMAN CAPITAL AND
TECHNOLOGY:
Integration, Alignment and Optimisation
Marius Meyer
15 October 2013
@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
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
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
What is the business problem?
“A business running without accurate data is
running blind.”
Ash Mahmud, Head of CRM: Groupon
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
Operational Management Consistency in the
Management of People
One of the toughest things to be is consistent
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
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
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
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 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
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.
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)