HR’s Strategic Shift:
How to Leverage
HR Technology to
Drive Business
Results
Guest Presenter: Marc S Miller President and Founder
Marc S Miller Associates
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“VALUE” is gained byleveraging technology to help HR move from “Data Management to Information Craftsmanship”
EFFECTIVE “BUSINESS RESULTS” = ACCEPTABLE “VALUE” – IN ALL ITS FORMS…
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“Information responsibility… begins with correctly identifying the information you need to effectively
carry out your job … extends to insuring that the
information flows to people who stand to benefit from
it, and in a form those people will readily understand.
“Increasingly, the measure of the executive will not be his ability to interpret data, but his ability to define
and exploit information.”
Peter Drucker
“Across the Board”December 1991
VERY DOABLE!
If we keep in mind some other opinions:
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The "Value” of HR and Using HR Technology to
Achieve “Value” & Sell
“Value”
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Top 10 HR Challenges Through 2017
1. Managing talent
2. Improving leadership development
3. Managing demographics (MILLENIALS)
4. Delivering on employee ENGAGEMENT
5. Managing change and cultural transformation
6. Enhancing THE USER EXPERIENCE
7. Transforming HR into a strategic partner
8. Improving performance management/rewards
9. Managing globalization
10.Managing work/life balance
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A NEW NEED FOR HR…..WORKFORCE AWARENESS OF CYBERSECURITY!!!
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Basic Personnel Services
Control and Compliance
Strategic
Expertise
A very long
time ago
A while ago Recently – last
5-10 years
Bureaucratic and administrative aspects of dealing with employees -PERSONNEL
Aspects of dealing with unions (1930s and 1940s in U.S.)
Dealing with discrimination and other US Federal Legislations - (1960s till present day)
Take a business perspective in compensation, benefits, recruiting and staffing, succession planning
Organizational effectiveness, business planning, workflow, best practices
Apply behavioral science knowledge for recruiting, evaluating, compensation, Training, change management and DO workforce modeling and forecasts
Administrator
Enforcer
EXPERT
Onboarding, Engagement,WorkforceAnalytics / Metrics /predictive analytics
Strategic Workforce / Talent Management
IMP
OR
TAN
CE TO
THE O
RG
HR’s Evolving Role
HR TECH
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Employee & Manager Self-Service (ESS/MSS)
Forecasts & Trends via Dashboards
Web-Delivered:
Time Capture & Reporting
Performance & Career Development
Job Posting, Recruiting, Hiring & On-boarding
Web-based:
Work Group Collaboration
Workflow and best practices
Remote Location 24/7 Access via Mobile
Some interaction with Social Media sites
“Value” is Achieved with HR Technology…
Cost Reduction
Cycle Time Reduction –Processing Efficiencies
Improved Information
Full Compliance at all levels
Increased Capabilities & Functionality
Enhanced Employee Engagement
Data Quality Near 100%
“Big Picture” – Business Metrics Easily Available
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HR’s Hierarchy of INFLUENCE/value
AnalyticsEvaluation
Engagement
IT & Telecom / Facilities & Security /
Workforce Mgmt & Planning / Labor Allocation / Procurement
Government Compliance:Environmental Mgmt & OSHA /
Social Media Policy and Procedures
Recruitment / Employment /
Compensation / Benefits / Learning Mgmt
/ Performance / Workforce Development /
Time & Attendance / Payroll /
Regulatory Requirements
TACTICAL
ENTERPRISE SUPPORT
“GAME CHANGING”STRATEGIC INFLUENCE
Getting to “Policy andPlanning”
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Transforming HR: Chiming in with advice
Say the right thing
Do the right thing
Measure the right thing
Get rid of “social workers”
Serve the business
Make value, not activity
Sources: Hay Group, SHRM, Ulrich, other Fast Company interviews
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IMPACT OF BUSINESS ALIGNMENT
Aligning HRto impact . . .
. . . Key organization success drivers to build . . .
. . . Organization capabilities that address business challenges to create . . .
. . . Improved business performanceand increased value
The 5 “success drivers”must be aligned from topto bottom: PEOPLE, PROCESSTECHNOLOGY, STRUCTURE andCULTURE
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Admin
Policy/Planning
20%
50%
30%
Outsourced activities to third party
Outsourced activities to employees
Business Partnering
HRT
SaaS
HR Admin, Payroll,
Benefits Admin,
Recruitment
60%
30%
10%
Administration
Business Partnering
Policy/Planning
ESS/MSS
Workflow
Best Practices
Email Alerts
Transforming HR:
Classical View to “Diamond” view
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“The Portal”A Personalized
“My WORK/LIFE”
Gateway
Work/Life Web Site
An employee or enterprise “portal” will improve the quality of HR service delivery by providing: Single point of access intuitive user experience Consistency of information, procedures,
and transactions Faster transactions via built in workflow Increased employee productivity and morale A channel to facilitate change management and culture
alignment
Resulting in: Reduced costs Re-enforcing a “high tech” culture, appealing to new
generation workers – Gen X, Y and Millennial “The Sticky Workplace,” which retains quality people
An effective EMPLOYEE SELF SERVICE STRATEGY (ESS) as well as MANAGER SELF SERVICE (MSS) results in lower costs, increased value to the business, and improved work/life balance for employees.
THE VISION
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THE VISION
Internal / External Users
Business partners
Applicants Employees Managers Retirees
Knowledge Based
Systems
Core HRMS Systems
Foreign Local
Payroll Systems
HR
ADMINISTRATION
AND
POLICIES
Access Technologies
Desktop
Web
Social media
“The Portal”A Personalized “My
WORK/LIFE” Gateway
Laptop TabletSmartphone
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THE VISIONHR organizations are shifting from functional structures to process-driven structures to support “Event-Based” services. This shift further enhances the role of HUMAN RESOURCES as a Strategic Business Partner, freed from transactional activities, to deliver strategic HR services.
Today’s HR Functions
Eliminate or Outsource
Transformational Informational or Transactional
HR Business Partner Services/Activities ESS/MSS/Service Center
Consolidation of value-added HR services.
PROACTIVE rather than reactive HUMAN CAPITAL MANAGEMNT
Builds upon what makestoday’s HR professionalvaluable to the business
Global Metrics Workforce Analytics Workflows and Policies Consolidation of strategic Virtual Teams – collaboration
across cultures and time zones
Develops and designs HR Programs
Consolidation of information- and transaction- based activities that cross organizational AND GEOGRAPHIC boundaries
Designed to efficiently process event-based transactions – BY EMPLOYEES DIRECTLY
Enables managers to manage –DIRECTLY
Non Value-AddedServices and Processes
Tran
sfo
rmin
gto
Compensationand Benefits
Strategy and Process Planning
Education, Training andDevelopment
Employee Relations Services
StaffPlanning & Resourcing
OrganizationPlanning andDevelopment
OccupationalHealth &
Safety
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THE VISION – AVAILABLE TODAY from any number
of effective and proven HRMS VENDORS!
ONE “SYSTEM OF RECORD” SINGLE SIGNON IMMEDIATE ACCESS BASED ON
ROLES AND RULES IMMEDIATE REPORTING HISTORY VIEWED WORKFLOW EMBEDDED “BEST PRACTICES” ESS AND MSS INTUITIVE NAVIGATION INTERGRATED FUNCTIONALITY DASHBOARDS AND METRICS
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800 #
CLIENT SUPPORT
HR Technology Solution ProviderThe Vendors support team— Systems Development
Changes • DefinitionReleases • Security
Transactions, queries, Training &Development
Employees
Managers
n Reportsn Metricsn Analyticsn Data
General Ledger and other financial systems
Payroll, with all filings
Benefits Admin, Cobra, ACA
LMS – Learning
Recruiting
Knowledgebases
Vendors with otherSystems
HRT Vendors
YOUR COMPANY’S DATA BASES AND
INSTALLED SYSTEMS
Feeds
Access Tools
Staffing Systems
THE VISION: PUTTING THE PIECES TOGETHER
SecureBack ups
YOUR COMPANY’S DATA BASES AND
INSTALLED SYSTEMSCLIENT’S
ENTERPRISE WIDEDATA
ESS
MSS
n Reportsn Metricsn Analysisn Data
HUMAN RESOURCES
SYSTEMS SUPPORT ORGANIZATION
APPLICANTS
Time and Attendance
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Administrative efficiencies resulting in cost reduction
Leadership development
Overall alignment with the organizations’ strategies, mission, goal and vision.
High service quality to all customers (stakeholders)
Responsiveness
Risk Management
Talent management, identification and acquisition, and a pipeline
Effective leveraging of technology to all appropriate functions within the realm of HR, Payroll and Benefits
“VALUE CREATION”!
CEO, Board & Stakeholders expect…
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Poll Question: Do you feel you are getting the full value out of your
HR technology?
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HR portal – Employee/Manager Self-Service
Taking advantage of SaaS, Web based Employee Portals
Entry/modification of personal data
System driven processing of a majority of HR transactions
Personalized – Role based
Interactive – Manager ‘in box”
Work-flow driven
Tablet and/or Smartphone enabled
Direct access by employees to Benefits providers websites
Integration to company’s web portal
Performance Management, Employee Goals
Succession Planning, Competencies
Version of software always current
Technology and outsourcing enable this shift to the mindset of “value” creation…..
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Products and cost of
production
Overhead
Economic indicators
Organizational financials
Organizational structure
The workforce and its
utilization
The marketplace
Competitors
Acquisitions and mergers
Research and development
Technology development
Human resource programs
and measurement
Think this……..
Stakeholders & C-Level Executives want actionable information that assesses…
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1. Who are the key people within our organization? What are
they doing? How good are they? How do we know?
Compared to our competitors, are we paying them too little?
Too much? How do we know? If we do lose a key employee,
what is our succession strategy?
2. How much would it cost to reduce headcount by 10% while
retaining our highest level performers? What impact might that
reduction have on our ability to remain competitive?
Reasonable questions? How much information
can you provide? How long will it take you?
C-Level Stakeholders Ask “Big Picture” Strategic(& Complex) Questions…
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What COUNTRY do we go into next?... And WHAT
do we do there????
AND how was it responded to… who did what
to get the answer??????…. Let me tell you
about it…
One of the most Strategic question EVER asked by
a CEO ……(in my opinion)
Cargill Corporation - CEO
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“Information Craftsmanship”Data Management
Data Analysis
C-Level Stakeholders Want Information NOT
Data
Data Analysis
Static, aging, past, reactive, transaction-based
Evaluate costs already spent
Analyzing/presenting How many? Which?What groups? Based on past transactions
Data
Costs
Analysis
Strategic Support
Forward view, projections, forecast, proactive, model-based
Future costs estimated Future value estimated
Estimating future total and formulating scenarios based on historical trends and other influences
From
Static to
Strategic
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METRICS….. ALWAYS BEEN AROUND!
SINNERS
BELIEVERS
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What is overall condition of the company? Business Unit? HR?
The Performance Metrics (aka - KPI’S) that HR should
measure MUST address the “Business”
Are we meeting Strategic Needs?
Are we helping to deliver on corporate strategy and direction?
Are we meeting our Customers’ Needs?
Are we optimizing our Service Delivery Process
Are we contributing to the company’s financial goals and overall well being?
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Strategy
Internal BusinessPerspective: What are we doing well?
Financial Perspective:How do we look to shareholders?
Growth & Learning Perspective: Can we continue to improve & create value?
Customer Perspective: How do customers see us?
Goals & MeasuresMarket ShareBrand StrengthSales TrendsCustomer SatisfactionCustomer Loyalty
Goals & MeasuresEarnings per SharePrice Earnings Ratio Budget AccuracyGrowth RevenueGross MarginCompany stock price versus competitionProfit-Employee Ratio
What C-Level Executives Are CONCERNED ABOUT:
Goals & MeasuresDesign to Market CycleFirst to Market %New Product RatioCompetency Change RateDevelopment Activities Exist to Meet Business Needs% Ready Successors
Goals & MeasuresDelivery PerformanceWorkforce ProductivityProcess/ workflows efficiencies / QualityComplianceBusiness StrategiesTalent pipelineWorkforce competenciesTurnover RateJob Fill Rate
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Metrics must be provided in support of the roles, responsibilities of different constituencies that require INFORMATION.
Specific Performance Metrics that HR Should Measure
Audience Desired Metrics & Analytics
C-Level Executives Company Performance &
Strategy
Senior HR Executives;
Directors & Managers of
Specific Program Delivery & Functionality
HR Operations &
Performance
HR Administrative Specialists HR Functionality Services &
Programs
HR Technology Specialists HR Technology Service
Delivery
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Human Capital Revenue Factor (HCRF)
Total Revenue / Full Time Equivalent (FTE)
Human Economic Value Added (HEVA)
(Net Operating Margin – Cost of Capital) / Full Time
Equivalent (FTE)
Human Capital Cost Factor (HCCF)
W2 Pay + Cost of Contingent Labor + Cost of
Absenteeism + Cost of Turnover
Human Capital Value Added (HCVA)
Operating Revenue – (Operating Expenses – Pay and
Benefits) / FTEs
Human Capital Return on Investment (HCROI)
Operating Revenue – (Operating Expenses – Pay and
Benefits) / Pay and Benefits
HR Operations & Performance Metrics
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ONE OF THE FIRST LISTINGS OF VALUABLE HR METRICS:
Benefit Factor (% of total salary)
Cost per Hire
Employee Cost Factor
Human Capital ROI
HR Headcount Ratio
Income Factor
Management Ratio
Revenue Factor
Training Cost Factor
Voluntary Separation Rate
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Cost Effectiveness Expressed As Computed As
Workforce
productivity (per
employee)
Net
income/employee
Net Income
Total Active
Employees
Production
output/employee
# Units
Output/Hourly
Employee
Total Hourly Active
Employees
Dollars of
sales/employee
Dollar Value or Units
Sold
Total # of Active
Employees
HR Functionality Services & Performance Metrics
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Using Workforce Analytics to manage TALENT
Make Smarter Hiring Decisions
Retain Key Talent Connect People Performance to Business Performance
Quality of Hire
Recruiting Channel
Effectiveness
Attract & Source
First Year Effectiveness
First Year Turnover
Compa-/Market Ratios
Retirement &
Succession Planning
Turnover by
Performance / other trends
Value Creator Profiles
Engagement: HR Prog &
Bus Outcome
Return on Talent
Acquisition
Investment
Cost of Days Lost Per
Employee
Value Created (Quotas,
Productivity, Margin...)
Predictive Analytics
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Acquisition Cost per hire Time to fill jobs Total Number of New Hires Total number of replacement staff Quality of new hires
Financial Average Total labor cost as a percentage of operating expense Pay per employee Benefits cost as a percent of pay Average performance score as compared
to revenue per FTE Human Economic Value Added (HEVA)
Retention Total separation rate Percentage of voluntary separation to total separations Separations by length of service Percentage of separations among “key” performers Cost of turnover
Development Training cost as a percentage of payroll Total training hours provided Average number of hours of training/FTE Training hours by functions Training ROI
TALENT ANALYTICS
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The Logic Chain: Why Metrics & Workforce
Analytics Are Critical… and create VALUE!!!!
HR metrics and analytics emerge from an information system
Managers make different and better decisions as a result of information
Decisions have impact on company’s strategy and goals
Goals and Strategies aim for Value Creation
Value Creation leads to efficiencies
Efficiencies usually lead to improved company performance (Revenues, Sales, Stock) ….. MEANING “VALUE”
Thus the demand for more INFORMATION, METRICS AND WORKFORCE ANALYTICS!!
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HR Scorecards &
Dashboards
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Visually appealing Colorful Shows trends Tells a story at a glance
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40
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Predictive Analytics: “Who is likely to leave?”
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Web delivered – SaaS – “Software as a Service”
Employee Self-Service and Manager Self-Service (ESS/MSS) – web
delivered – “MyPortal”, Manager’s “in box”
Best practices and workflow built in, with templates provided
Email triggers and notification for action alerts and process steps
Functionality encompassing most functions within HR including Payroll
and Benefits
A comprehensive “library of standard reports”
Ad hoc Report Writer (user oriented)
Metrics and “Dashboard” graphical presentation
“Drill down” capability – underlying data at a “click”
Tables - changeable/manageable by end user or by a trained “power user”
Effective date processing – future and retroactive
Security based on rules and end user roles
Features and Functions within HR Technology delivery
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Leverage HR Technology to reduce drastically time spent on administrative tasks
Shift responsibilities to employees, managers and other HR team members so you can shift focus to strategic planning
Require high performance and service from existing vendors and service providers
Redefine your mission to include only those functions that really matter
Find ways to outsource important functions that are critical, but not core, to the corporate mission
Find service providers that can deliver a number of these functions more efficiently while supporting the mission of the company
Deliver Dashboards displaying Metrics that show trends over time
Grab new roles such as Workforce Cyber Awareness that might not be considered an HR issue, but should be.
HR and HR Technologists: your “To Do” list…
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SUMMARY : KEY WORDS….. AND CONCEPTS
VALUE DRIVEN : do everything within HR that OTHERS will
see generates ACCEPTABLE BUSINESS IMPACT.
GET THE DATA, MAKE SURE IT IS “GOOD” DATA
BE PROACTIVE …. KNOW YOUR ORGANIZATION, NOT JUST YOUR FUNCTION
USE TECHNOLOGY: DEMAND EXPERT SERVICE FROM PROVIDERS
SEEK METRICS, THEN SEEK THE UNDERLYING “INFORMATION” BY UTILIZING “ANALYTICS”
DON’T WAIT TO BE ASKED, PUSH YOUR CAPABILITIES, MARKET THE IMPORTANCE OF HR
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“Heroic HR”
You can purchase a copy
for $19.95 at:
www.marcsmillerassociates.com
www.Ihrimpublications.com
www.Futurapublishing.com
SECOND EDITION
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