HR’s New Competencies

Matthew Kaiser, CEBSManaging DirectorLockton Benefit GroupKansas City, Missouri

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This is not me . . .

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Today’s HR looks vastly different from the HR of 25 years ago

HR’s certifications have grown in number

PHR SHRM-CP

(Not ignoring our little favorite in benefits: CEBS!)

HR’s vocabulary has changed

HRIS is now HCM and everything is “strategic”

HR’s drinking has also increased (depending upon your vice!)

PPACA “@#$%&”

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Today’s HR looks vastly different from the HR of even 10 years ago

Finally, while HR’s mission hasn’t changed: Attract, retain, and

motivate the best workforce possible

The COMPETENCIESrequired have certainly expanded

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Change Management

AGENDA4 New HR Competencies

ComplianceManagement

ContractNegotiation

Vendor Management

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AGENDA4 New HR Competenciesand maybe a few extra!

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AGENDA4 New HR Competenciesand maybe a few extra!

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Change Management

AGENDA4 New HR Competencies

ComplianceManagement

ContractNegotiation

Vendor Management

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Under-appreciated, under-resourced competency every employer needs

If present at all, often an IT function—especially if there is a PMO

HR needs to become synonymous with change management to ensure a seat at any strategic table!

CHANGE MANAGEMENT

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Always Involves Conflict!CHANGE MANAGEMENT

In Order to Be Successful

Our Objective:

Grow theBusiness

We Must:

Protect theBusiness

Go SlowerGo Faster

Source: Embracing and Creating Value from Shadow IT, May 2014 Gartner, Simon Mingay

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Acquiring, Developing, Maintaining tools outside IT’s governance Decision Support for Benefits OE QlikView, InfoBuilders, Tableau Total Comp Statements

Business must drive IT……but how?

CHANGE MANAGEMENT

SHADOW IT

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CHANGE MANAGEMENT SHADOW IT

Source: Embracing and Creating Value from Shadow IT, May 2014 Gartner, Simon Mingay

Mission-Critical Tools

Non-Mission-Critical Tools

Highly Complex

Tools

SimpleTools

PartnerUp

Off-Limits

SweetSpot

MoneyPit

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Stakeholder & Organizational Impact

CHANGE MANAGEMENT

StartWithWhy

WIIFM

Who Moved

My Cheese

Champion Change Mgmt Internally Story time!

Acknowledge any Cultural Change

Design the Process First

Rely on Outside Experience

Eagerly Seek Opportunities to Reinforce

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CHANGE MANAGEMENT—Why is it so diff icult?

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CHANGE MANAGEMENT – Why is it so diff icult?

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Instead of “informing,” HR must now

become excellent at storytelling—

Gaining attention, sustaining interest,

and provoking action

BE A GOOD STORY-TELLER!

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CHANGE MANAGEMENT vs. PROJECT MANAGEMENT

Project Manager Driver Control (esp. budget) Constrain—Scope creep watchdog Risk Avoidance Make the Change

Change Manager Mediator People and Impact Focused Open, Engaging Risk Mitigation Obtain Acceptance of Change

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PROJECT MANAGEMENT

Top 3 Reasons Projects Fail

1) Lack of user involvement

2) Lack of executive support

3) Inexperienced project managers

16%

53%

31%

Success or failure? Can you guess?

Source: Standish Group; US Project Leadership Conference—7,552 development engagements

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Change Management

AGENDA4 New HR Competencies

ComplianceManagement

ContractNegotiation

Vendor Management

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VENDOR MGMT should look INTENTIONAL

Metric Driven Corporate Objectives Cycle Time/Quality Risk Management Customer Satisfaction/NPS

Event Driven

VENDOR MANAGEMENT

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VENDOR MANAGEMENT

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VENDOR MANAGEMENT

Sourcing Strategy

Vendor Selection

Contract Negotiation

Implementation Oversight

Vendor Management

Vendor Management Risk Mitigations Continued Vendor

Product Development

Ongoing Financial Business Concern

Merger and Acquisition

Missed Credits for SLAs

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VENDOR MANAGEMENT

Transformation of HR Information Systems Bimodal is coming to HR

SaaS CAGR = 17.9%vs. employer IT budget growth of 3%

Switching Costs / Ease of Entry

Source: Evaluating and Negotiating Software License Agreements..2016, Gartner, Stewart Buchanan

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RECOMMENDATIONS

Create a holistic program for proactively monitoring: Vendor strategy/roadmap as it relates to your interests Performance to contract Objective Data:

YTD Expense and YOY increase, Vendor Ticker, D&B Rating

Obtain participation from key stakeholders vendor review process. Who feels the pain of the SLAs in the contract?

Implement a planned periodic review schedule Are they doing what they said they would? Speed of redress?

Source: Toolkit: Vendor Evaluation survey for 360 Degree Deal Review, Dec. 2015, Gartner, Helen Huntley

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Source: Magic Quadrant for Cloud HCM Suites 2016 Gartner, Ron Hanscome

VENDOR MANAGEMENT

Vendor Management Risk Mitigations Secure “Outside” Perspective Sources

Yearly “Sales” Evaluation

Topical Vendor Summit Corporate and Departmental

Objectives Expected growth rates Connection to Leadership

SLA/Net Promoter Review

Completeness of Vision

Abi

lity

to E

xecu

te

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HOW CAN WE MEASURE SUBJECTIVE DATA?

Net Promoter Score How likely is it that you would recommend Vendor X to a friend or colleague?

0 1 2 3 4 5 6 7 8 9 10Detractors Passive Promoters

VENDOR MANAGEMENT

. . . recommend Vendor X . . .

. . . recommend your Benefits Enrollment experience . . .

. . . recommend our Total Comp Statements . . .

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HOW CAN WE MEASURE SUBJECTIVE DATA?

360◦ Surveys Vendor Facing Questions

VENDOR MANAGEMENT

We are responsive to vendor issuesWe pay our bills timelyWe have clarity on business objectives , solution requirements and overall value needed

Source: Toolkit: Vendor Evaluation survey for 360 Degree Deal Review, Dec. 2015, Gartner, Helen Huntley

Internal Questions

Vendor contract is win/win for both partiesVendor responses to "requests for" are timely and completeProducts live up to vendor hypeVendor has inappropriate staffing numbers, or delays or turnovers that impact service delivery

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VENDOR MANAGEMENT

Opportunity or Risk? Yes!

Co-Sourced Development Ongoing Business Risk Private Equity Chase Data Security

EVALUATING START-UP VENDORS

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VENDOR MANAGEMENT

Begin with the End in Mind Renewal caps at signing

Target 3-5% net price increase for any renewal

Budget owner signoff

Multiyear deals = one price increase, not yearly

Pre-establish escalation strategy

Calendar negotiations T - 6 months

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Change Management

AGENDA4 New HR Competencies

ComplianceManagement

ContractNegotiation

Vendor Management

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GOTCHAS!

Rights to Innovation

Entire Agreement Clause

Limit of Liability

CONTRACT NEGOTIATION

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CONTRACT NEGOTIATION

ENTIRE AGREEMENT CLAUSE“This Agreement constitutes the entire arrangements between the Parties concerning the subject matter contained herein, and it supersedes and replaces any prior verbal or written understandings, proposals, quotations, communications and representations previously discussed by the Parties.”

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LIMITATIONS OF LIABILITY

The 3rd most important section

SaaS Standard:

Up to 1 year of fees paid

$7 PEPM + $50,000 impl. fee =

Max: $134,000 / 1,000 person firm

CONTRACT NEGOTIATION

average breach cost(up 29% since 2013)$4IBM/Ponemon Institute

MILLION

per recordPonemon 2013

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TRIPLE CONSTRAINTS

CONTRACT NEGOTIATION

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TRIPLE CONSTRAINTS

CONTRACT NEGOTIATION

Least Flexible

OptimizeMost

FlexibleWhy?

Scope/Quality

XScope can be outcome of

resources available

Schedule/ Speed

XAny quarter except Q4 start is

OK to begin

Resources/ Cost

XLimited experienced staff to

assign to this project

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DETERMINING YOUR LEVERAGE

1) 1-2 gap

2) Sales Quotas & Calendars

3) Innovation = limited competition

4) Name on Trapper Keeper

SERVICE LEVEL AGREEMENTS

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Hype CycleGartner Resource—

check with your IT

shop

Source: Hype Cycle for Human Capital Management Software, 2016; Gartner, Helen Poitevin

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SERVICE LEVEL AGREEMENTS

SaaS vendors love System Availability—99.5%/monthly Exclusions, 3rd Party failures don’t count (what about subs?)

SLAS FOR HR & BENEFITS BUYERS TO TARGET: Documented Disaster Recover Plan Minimum 72 hours notice of scheduled downtime Requirement to test data extraction at install and ongoing Attach to contract—Do not link to web

Tiered Credit Structure for service or support incident based upon severity Escalating credits—Fight the power!

Hardest to achieve: SLA reporting process with proactive alerting Finally, establish corporate escalation path in contract by role or title

Source: Toolkit: Key Terms to Negotiate in SaaS SLAs to Reduce Risk, Feb 2016, Gartner, Jo Liversidge

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Begin with the End in Mind Renewal caps at signing

Target 3-5% net price increase for

any renewal

Budget owner signoff

Multiyear deals = one price increase,

not yearly

Pre-establish escalation strategy

Calendar negotiations T - 6 months

CONTRACT NEGOTIATION

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CORPORATE GOVERNANCE

This can look intimidating

Other people’s worry?

If HR = Shadow IT, then HR = Shadow

Compliance too

Source: Understanding the Components of Compliance, 2012, Gartner, John Wheeler

Compliance Management

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COMPLIANCE MANAGEMENT

Source: Understanding the Components of Compliance, 2012, Gartner, John Wheeler

HR & BENEFITS AS COMPLIANCE

Risk Aware vs. Zealot

BYOD Makes Compliance = Invasive

Contingent Workforce = Fluid Target

People = HR

Associate Development Opportunity

IT Partnership Opportunity

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COMPARING COMPLIANCE RISKS

Which is worse:

- Hacker getting inside?

- Missing Regulatory Req.?

Cost x Risk x Impact

Compliance Leveler

Internal Cost

External Risk

COMPLIANCE MANAGEMENT

0 0.5 1 1.5 2 2.5 3 3.5 4

Risk to Business

HighCost

LowCost

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Change Management

AGENDA4 New HR Competencies

ComplianceManagement

ContractNegotiation

Vendor Management

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THANK YOU!

What questions do you have?

@MatthewKaiser_

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