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1 Driving Workforce Transformation Through Metrics Present by: Russell M. Klosk, MBA, SPHR, GPHR Paul Thornton, Ph. D. Your Mission – Our Passion

Driving Hr Transformation With Metrics V7

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Presentation to ASMI HR Measurement, Metrics & Analytics Summit, Arlington, VA, August, 2010

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Driving Workforce Transformation Through Metrics

Present by:

Russell M. Klosk, MBA, SPHR, GPHR

Paul Thornton, Ph. D.

Your Mission – Our Passion

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Everybody loves Dilbert

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What are we going to cover?

What are leaders asking of the HR organization?

– How do metrics support this?

The role of Metrics as an enablement mechanism in HR Transformation

Are you measuring the right things?

Real world examples

In other words

– Which key data should be shared and highlighted to your executive team

– Review your data to determine what changes will spur new innovation and growth (Transformational data)

– Architecture & tools to help accomplish this

– Understand where your workforce resources should be allocated

– What does it look like

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About Us

Serco

Fortune 500 company with over $6B annual sales

More than 70,000 employees globally

UK Headquartered and operating in 50 countries around the world

US Headquarters in Reston, VA

Over 11,000 US Based skilled and dedicated professionals

Professional service firms offering a full range of Management Consulting services.

We embed metrics into everything we do, both HR metrics and performance metrics.

30+ years corporate experience driving HR Transformation

Russell Klosk, MBA, SPHR, GPHR

Paul Thornton, Ph.D.

We are a leading provider of professional,

technology and management services.

Advise | Design | Integrate | Deliver

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Organizational priorities are changingShift from transactional to strategic

Mission attainment is leadership’s top priority - and innovation is required to enable it

Responsiveness and agility are the new key competencies, requiring innovation across three areas:

– Offerings and services – Operation of core functional areas– Overall enterprise model (especially collaboration)

Operating model innovation is becoming as important as traditional offering and service innovation. Organizations that outperform focus on this

But, collaboration and model reinvention require strong leadership of change, notably in the areas of:

– Culture– Rewards– Integration of process and technology

Source: 456 CEOs, IBM Global CEO Study, 2004765 CEOs, IBM Global CEO Study 2006

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The Question Leaders Aren’t Asking

How do I make decisions about human resources with the same rigor as I do about finance or operations?

What types of metrics and dashboards empower me (leaders) to accomplish this?

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These priorities shape the new Human Capital agenda

A variable and efficient cost model for the HR function with high service levels is required

Organizations require many delivery channels to ensure employee and manager access

CHROs must be able to demonstrate the link between Human Capital activities and business results

HR Executives are challenged to ensure the right balance between strategic effectiveness of HR and operational efficiency of the function

The decision to build or buy skills becomes central Retaining key people when facing a shortage of

supply is critical Work must transform to shortages Organizations must measure and reward executives

and the HR function by how they deliver on the critical talent agenda

Developing skills to support growth, innovation, differentiation and customer satisfaction becomes a top priority

Collaboration across the company, channels, and citizens is needed to transform work

As people challenges including cultural development, leadership and collaboration become a critical part of achieving innovation, the Human Capital agenda must evolve

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What key data should be shared?

There is no one magic bullet

You must determine what metrics drive organizational capability given your unique business environment

If you are looking for a single metric or data element that is everything your HR Executives need you are missing the mark

It is entirely about looking at all the relevant data and getting to those that tell a meaningful story for what you are trying to accomplish

How do get to this?

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Developing your expertise:Metrics & Analytics enable the

transformation

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Different metrics for different missions

Workforce EnablementHR Execution Employee

Development• Corporate learning

strategy & analytics• eContent• Business applications and

process training• Learning technology• Business skills training• Merger training programs• Learning BTO and system

outsourcing, maintenance and hosting

• Human capital / HR strategy and change

• HR operations and service delivery

• Process and organization design and improvement

• Shared services and employee service centers

• HRIT strategy, systems implementation and upgrades

• HRBTO and system outsourcing, maintenance and hosting

• Workforce planning & analytics• Talent sourcing, selection &

deployment• Industry workforce solutions

(aging, diversity, immigrants, absence, third party cost mgmt, employee experience, forecasting & scheduling)

• Time & labour• Competency, performance &

succession management• Role-based transformation• Knowledge management &

collaboration

Data is used to spur new innovation and growth (Transformation)Identifies areas of focus, and areas for improvement

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Workforce Intelligence Architecture

“Run the department”(transactional efficiency)Workforce Reporting

“Monitor HR performance”(operational effectiveness)HR Metrics

“Tie HR to the business”(strategic impact)Business Analytics

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Using “Workforce Intelligence” as Your Tool

 This will insure that …

Operational reporting is more comprehensive and efficient

Individual application data is integrated

You have desktop reporting tools

Graphically-rich information is easily utilized

Dashboards are user specific

You can measure progress against benchmarks and internal targets

HR practices and investments can be aligned with enterprise goals

Relationships between investment and results can be demonstrated

WorkforceReporting

HR Metrics

Business Analytics

Impact

Effectiveness

EfficiencyTransactional

Operational

Strategic

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Do we really measure the HR Value Proposition

Actual HR Measures (tactical)

Headcount

Turnover Rates

Succession Candidates

Time-To-Fill, Train, On-Board, Utilization

Training Hours

Cost Reductions

Training Completed

Grievances

Client Satisfaction Surveys

Performance/Potential Ratings

Productivity per employee

Best Practices Recognition

Driven to WinDriven to Win

FlexibleFlexible Embracing RiskEmbracing Risk

LeadersLeaders

Self DevelopingSelf Developing CreativeCreative

GlobalGlobal FastFast

Human Capital Objectives (strategic)

Mission AlignedMission Aligned EngagedEngaged

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Value Creation Increasingly Dependent on the “Talent” market

FinancialProduct / Service Talent

Value Analysis in this

Market is Critical

SMART ≠ MOTIVATED

EXPERIENCED ≠ PRODUCTIVE

AGGRESSIVE ≠ EFFECTIVE

CHARMING ≠ CONSTRUCTIVE

Measure what you needValue Creation

Strategy

Value Creation Strategy

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From Transactional to StrategicHuman Resources to Human Infrastructure

A revolution in the way people are valued in the workplace.

Instead of treating people as units of cost, measure and maximize their strategic value to the enterprise.

‘Headcount’ gets cut. ‘Infrastructure’ gets attention!

Change Brings Opportunity

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Transition of the HR Functions

Control

Maintaining compliance and

control of management

process

PERSONNEL

Service Delivery

Providing Effective Services

HUMAN RESOURCES

Decision Support

Focus on Improving

Organizational Decisions

Human Infrastructure

+

+

AN

ALY

TIC

S

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Business Analytics

Understanding how your workforce resources are allocated is what the analytics do for you.

Identify top workforce drivers and allocate appropriate investments to drive company success.

Align workforce performance with business strategic goals.

Focus workforce practices on critical business success levers.

Focus is on certifications, qualifications, competency and performance, measure not only performance but potential, maximize investments.

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So what do we tell to leaders?

What the workforce is capable of,

What the workforce needs to evolve to,

How successful are we executing,

Where does $’s spent generate the best results,

How should we form teams,

– Who, when, where,

Where & How should work be performed and measured,

What & How do we reward & recognize,

Which employees are the future and how do we get them what they need to get there.

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Individual objectives & appraisals, Aligning people with strategy, Training

• Business planning; Risk management; Resource allocation; Project & Programme Management

Execution

People

Processes

OrganizationalConstructs

ReportingBusiness Strategy

using strategy to drive delivery

Behaviours

Decisions &

actions

Measures &

Analytics

The Balanced Scorecard

People

Results

Processes

Customer

Here is how it all comes together

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So what does it look like in the real world

Navy Personnel Readiness

– Issue: Navy skill requirements are constantly changing with Congressional actions, unit moves, reorganizations and equipment fielding or retirement. Operational unit readiness is a function of personnel readiness but in terms of fill and fit (skills, experience/grade)

– Solution: Fielded forecasting tools which predict personnel readiness up to 15 years into the future at varying levels of detail (higher near term and more aggregated beyond 5 years)

– Metrics: gains, promotions, losses, experience levels and gaps

Navy Incentives

– Issue: Use of incentives is a major component of personnel costs supporting personnel retention (selected skills and experience) and volunteerism for difficult to fill locations (hardship locations)

– Solution: Fielded analytic tools which track the use of incentives for ROI and a “reverse bid” tool which allows the Navy to post ceilings for certain assignments and the Sailors can bid down (win-win)

– Metrics: Retention %, Incentive Utilization, Bid levels, Cost Savings

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Some more examples

Navy Budget Process

– Issue: Navy submits a Five Year Defense Plan and Program Objective Memorandum to justify budgetary requirements. Personnel costs, direct and supporting, represent a significant portion of the overall budget. Costs are driven by both internal and external factors.

– Solution: Developed predictive forecasting models allowing policy analysis and resulting strength and budget requirements (planning) and execution tracking models which allow month to month analysis (expenditures to target)

– Metrics: Annual and monthly strength, Costs, Readiness levels

US FBI Strategic Planning

– Issue: The FBI recognized the changing nature of crime and trends would require reorganization and realignment.

– Solution: Developed a workforce strategic planning model which allowed analysis to develop future scenarios (requirements), forecast the gaps between the projected existing and future requirements and solutions for closing the gaps

– Metrics: annual gains, promotions, losses, experience levels and gaps by scenario

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Questions