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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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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Marc S Miller

www.marcsmillerassociates.com

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