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Producing iron ore pellets for 35 years
Ukrainian HR Summit 201720 April 2017
2
How should you position and structure HR in your organisation for success?
Greg NortjeGroup Head of HRFerrexpo plc
3
Delegate survey
“In my organisation HR is seen as a strategic function that is critical to our overall business
success?”
Put your hand up if you agree with this statement
2
4
W H AT I S T Y P I C A L LY B R O K E N ?
Organisation: • Mis-aligned strategic objectives• Multiple accountabilities for HR• Lack of role clarity• Silo mentality leading to lack of sharing PDPs
Service: • Low customer ratings• No SLAs or agreed metrics
Quality: • Non-standard, variable quality processes
Cost: • Lack of technology enablers• Inefficient mix of resources• Flawed incentives
People: • Declining morale or “in a comfort zone” • Wrong skill mix
Trapped by inefficient execution of ‘personnel administration services role’ and not equipped to address new strategic demands
Best practice HR functional design consists of 5 functional job groups
5
W H AT AM O U N T O F C H A N G E I S P O S S I B L E ?
Best practice HR functional design consists of 5 functional job groups
6
W H AT Y O U N E E D TO D O TO G E T H R I N Y O U R O R G A N I S ATI O N TO B E S E E N AS A S T R ATE G I C F U N C T I O N ?
7
• Customer Interaction Service Performance Measurement
• Resolution by tiers of service
• Detailed case Information and reporting
• Detailed call information and reporting
• People metrics reporting
Measurement • Key Principles• Strategy• Tiers of Service• Customer interaction/
service delivery model
Strategy Values & Culture• Values• Behaviour• Engagement
• Structures• Teams• Jobs• Roles
Organisation• Leadership• Competencies• Talent management• Capability• Knowledge Management
Competency
Process• Contact Delivery Channels• Tiers of Service Resolution • Service Offerings• Contact Processes
• Workflow & Automation• Escalation processes• Contact SLAs and integration
• Locations• Equipment (telephones, headsets, flat
screens, scanners etc)• Other tools
Facilities & EquipmentTechnology & Systems• Telephony (Call Management)• Case Management Solution• Knowledge Management• Technical Infrastructure• Integration with ERP & other applications
(Portals , Reporting Sources etc)
1. STRATEGY
4. TECHNOLOGY/ EQUIPMENT
3. PROCESS
2. PEOPLEHR customer interaction is a capability that is enabled by the components represented below.
H R F U N C T I O N M O D E L
8
W H AT I S T H E F O C U S O F Y O U R H R S T R ATE G Y ?
Employee Champion – Commitment & Morale
Change Management/Transformation Agent
Administrative Expert – Processes/Transactional
ExcellenceStrategic Partner
NowHR Roles
Future Strategic / long-term focus
Operational /
day-to-day focus
Building an efficient infrastructure and
provision of technical expertise
“Hard” / process focus
“Soft” / People Focus
Creating a renewed
organisation
Increasing employee
commitment and capability
Formulating & executing strategy
Dave Ulrich – HR Champions: The next agenda for adding value & delivering results - 1996
9
H R S T R ATE G Y E X A M P L E
Sustained leadership
Build and sustain a high-performance culture
Effective labour at competitive costs
Winning human capital
performance
Fulfilling work environment
Create the tools that enable a culture that
measures and rewards
performance and drives superior
business results
Build strategies, processes, and
tools that transform
management and ensure the supply
of leaders
Create strategies and programs
that generate a fulfilling work environment
where people can perform to their full potential and are proud to work for your company
Create the strategies, tools, and services that
deliver a workforce with the right skills
and at the right price to execute your company’s
strategy
HR operating excellence
Develop one core set of polices and
execute them without
exception.
Align business priorities with HR
priorities and focus on
delivering results that matter to the
business
10
Now HR Roles
Future Strategic/Long term focus
Operational/
day-to-day focus
“Hard”/Process Focus
“Soft”/People Focus
Creating a renewed
organisation
Formulating & executing strategy
Increasing employee
commitment and capability
Building an efficient infrastructure and
provision of HR technical expertise
Sustained leadership
Effective labour at competitive costs
Winning human capital performance
Fulfilling work environment
HR operating excellence
W H AT I S T H E F O C U S O F Y O U R H R S T R ATE G Y ?
Man
age
11
Y O U R H R S T R ATE G Y S H O U L D B E S I M P L E AN D E A S Y TO U N D E R S TAN D B Y E V E RYO N E
“A Great place to work”
1. We will be an employer where colleagues love to work
2. We will continue to invest in the training and development of our colleagues
3. We will have an inclusive workforce that offers employment opportunities to all members of the community
HR Strategy
Commitments
KPIs & Measures
1. We will understand our colleagues better than anyone else and engage colleagues in the long term success of our business
2. We will exceed the National Living Wage and address the gender pay gap
3. We will invest in industry leading training and development for all colleagues
1. Measures
2. Measures
3. Measures
4. Etc.
5. Etc.
6. Etc.
12
When developing your strategy what are the 4 major trends should you have on
your radar?
13
Economic Activity Shift
- Balance of economic activity is shifting East and South…………. at high speed!
Year 2000 ~ 95% of large company HQs in Europe & USA
Year 2025 > based in China than Europe & USA combined
Emerging markets ~ 10 years will account for 70% of global economic growth
Since 1985 ~ 65m people have urbanised
Between 2016 & 2025 ½ of global economic growth will come from 440 cities in emerging markets:
‒ Hsinchu in northern Taiwan - 4th largest advanced electronic & high-tech hub
‒ Brazil’s Santa Catarina state - regional hub for electronics & vehicle manufacturing & home to a number of Billion $ companies already
D I S R U P T I V E F O R C E S S H A P I N G T H E W O R L D O F W O R K ( 1 )
Source: No ordinary disruption, R Dobbs et.al., McKinsey & Co, 2015
Best practice HR functional design consists of 5 functional job groups
14
E C O N O M I C AC T I V I T Y I S S H I F T I N G !
SHANGHAI CIRCA. 1995
Best practice HR functional design consists of 5 functional job groups
15
SHANGHAI CIRCA. 2015
I F Y O U R P E O P L E P L A N D O E S N O T AD D R E S S I T Y O U W I L L B E L E F T B E H I N D !
16
Technology:
- Computing power – a faster, more transparent world of work - flexible work patterns, fewer support staff
- Processing of information - outsourcing, enterprise wide systems
- Industry 4.0, Big Data, virtual reality and artificial intelligence
- To reach 50m users:
Telephone ~ 50 years
Radio ~ 10 years
iPod ~ 5 years
Skype ~ 2 years
“Angry Birds” ~ 35 days
D I S R U P T I V E F O R C E S S H A P I N G T H E W O R L D O F W O R K ( 2 )
Best practice HR functional design consists of 5 functional job groups
17
D I S R U P T I V E F O R C E S S H A P I N G T H E W O R L D O F W O R K ( 3 )
Demographics
- Ageing populations, falling fertility rates, generational divides, migration
- 30 years ago 2.1 children = replacement rate; 2013 ~ 60% of world population in countries with a lower fertility rate
- Changing social attitudes/ single parent families/ norms/ rise of extremism - irreversible trends changing how societies operate
Ukraine predicated shortfall in labour in the next 10 years
18
U K R A I N E H A S O N E O F T H E H I G H E S T M O R B I D I T Y R ATE S I N T H E W O R L D – L I M I T S L A B O U R M A R K E T G R O W T H
Source: http://countrymeters.info/ru/Ukraine and https://uk.wikipedia.org/wiki/
In 2015 Ukraine was second out of 225 countries in terms of morbidity, second only to the Kingdom of Lesotho, a small Southern African state.
Average life expectancy for men is ~ 62.8 years, women ~ 74.8 years.
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
0
2
4
6
8
10
12
14
16
1815.4 15.3 15.7 16 16 16.6 16.2 16.4 16.3
15.3 15.2 14.5 14.5 14.6 14.7
Коэффициент смертности в Украине/ Morbidity in Ukraine
Средний мировой коэффициент смертности/ Average world morbidity rate, 8,6
Болезни систем кровообращения/ Circulatory diseases; 67.3
Новообразования/Neoplasms; 13.3
Внешние причины/ External reasons; 6.3Болезни органов пищеварения/ Digestive system; 4
Болезни органов дыхания/ Respiratory diseases; 2.3Инфекции и паразиты/ Infections & culprits; 1.7Другие причины/ Other reasons; 5
7.06%
33.86%
5.08%6.68%
36.94%
10.38%
Население Украины на конец 2015г.Population of Ukraine end of 2015
0 - 14 (М/М)
15 - 64 (М/М)
65 + (М/М)
0 - 14 (Ж/F)
15 - 64 (Ж/F)
65 + (Ж/F)
Demographics:
19
D I S R U P T I V E F O R C E S S H A P I N G T H E W O R L D O F W O R K ( 4 )
Globalisation
- Asia becoming world’s largest trading region
- South-South trade doubled in last 10 years
- Trade between China and Africa:
• YR2000 ~ US$9bn
• Year 2013 ~ US$211bn
- Global capital flows (trade) expanded 25 times between 1980 and 2007
- Increase in cross-border digital “flows”
- International migration/ living outside country of birth:
• Year 1960 ~ 75m people
• Year 2013 ~ 232m people
Source: UN Department of Economic & Social Affairs/ No ordinary disruption, R Dobbs et.al., McKinsey & Cos, 2015
20
G L O B A L I Z ATI O N I S I M PAC T I N G S K I L L S I N U K R A I N E ( 4 )
По данным сайта Мигрант.ру http://migrant.ru/v-medvedchuk-vyrazil-svoe-mnenie-otnositelno-ugroz-trudovoj-migracii-v-ukraine/и Pantopticon http://panoptikon.org/articles/73767-vsplesk-migracii-iz-ukrainy-kuda-i-zachem-edut-ukraincy.html
Ministry of Social Policy confirms that today between 3 and 5 million Ukrainians work abroad
The total number of labour migrants from Ukraine is estimated at 4.5 million people
According to the Institute of Ethnology national Academy of Sciences, labour migration is as follows
Russia
More than 2 mln (officially – 169K)
Italy
500K (officially – 195412)
Poland
More than 450K (officially – 20K)
Czechia
150K (officially – 51K)
Portugal
75K (officially – 44600)
Spain
250K (officially – 52760)
Greece
75K (officially – 20K)
Great Britain
About 70K
Netherlands
40K
USA
About 500KOther
About 100K
Where do the Ukrainians go?
The most popular countries are Germany and Poland, the main reasons are work and family reasons
Moved to PPR starting from 2015
Germany
Poland
Slovakia
Ukraine
According to the migration service of Ukraine
The main reasons of migration
According to Euro statistics in 2014
Work
Study
Family reasons
Other reasons
21
What other trends should you be concerned about in Ukraine?
22
E M P L O Y E E PAY I N U K R A I N E I S 2 1 % O F T H E E U AVE R A G E B U T M I N I M U M WAG E I S H I G H E S T R E L ATI V E TO P E E R S
Labour & wages
- Minimum wage is ahead of productivity vs. European peers
- Minimum wage
- Increased growth (ST), inflation (LT) & Zero hour contracts
- Rising number of part-time or self-employed workers; currently 1/3 of workforce:
- Lower taxes & regulation
- Avoidance of minimum wage & benefits thresholds
- Greater use of contractors
- Globalisation & employment flexibility
- Pension reform?
Source: World Development Bank/ IMF data
23
C U LTU R E C O U L D B E A P O T E N T I A L H U R D L E TO C H A N G E
ACTIONSEMOTIONS
BELIEFS
• How we feel about ourselves• How we feel about our jobs• How we feel about management• How we feel about our organisations• How we feel about our world
• What we do or don’t do• What we say or don’t say• The way in which we behave
• The meaning and judgements we attribute to ourselves, others and the environment around us
• What we think about ourselves, others and the environment
• Our perceptions and interpretations of reality
EXPERIENCES 1
The events and situations that we experience
The way in which we are managed
The environment in which we are required to perform
3 4
2
24
Power Distance Individualism Motivation Uncertainty Avoidance Long term outlook0
10
20
30
40
50
60
70
80
90
100
Australia Ukraine Russia
Status is important; in a hierarchy everyone has
a place; Centralised control; subordinates expect to be told what
to do
Think for yourself; personal
fulfilment. Look after yourself and direct family only
Let’s analyse this in detail before we try; we like to control the future; not keen on
new ideas and change
Perseverance, pragmatism; education.
Impossible to understand
complexity of life
People treated as equals; we value your
ideas; hierarchy established for convenience;
People belong to ‘in groups’ that take care of them in
exchange for loyalty.
Let’s try this and work out the details
later; we are comfortable seeing
what the future brings
Desire to understand the truth. Respect for traditions, unlikely to save for future, focus
on quick results
Society is driven by competition, achievement
and success – a value system that starts in school and continues throughout organizational behaviour.
Society is about caring for others and quality of life. Quality of life is the
sign of success and standing out from the
crowd is not admirable.
H O F S T E D E C U LTU R A L D I F F E R E N C E S – AU S T R A L I A , U K R A I N E , R U S S I A
25
How should you structure HR for it to become a more strategic function?
26Study conducted by Hay/McBer & Company, reported by Lyle M. Spencer, Jr., PhD.
40%
Today
Administration
Transactions/ Providing
information
Relationship Management/ Case
Work
Strategy
Handle employee transactions and enquiries
Develop & deliver programmes that enhance the organization's ability to attract, develop and
retain superior performers
Align HR activities and programmes with the strategic direction and business needs of
the organisation
30%
25%
5%
% of HR time Future
20%
20%
20%
Strategy
Administration
40%
Limited line management responsibility for HR Line accountability for people management is key
Devolve as much as possible to line managers & self-service channels
Transactions/ Providing
information
I F YO U WAN T Y O U R H R F U N C T I O N TO B E S T R ATE G I C & R E L E VAN T Y O U H AVE TO R E S T R U C T U R E T H E W O R K
Relationship Management/ Case
Work
Increase % of time spent on issues of strategic importance
27
Strategy
Admin
Reducing the resource demands and time required to develop, deliver and use key HR products, services and processes.
Developing, delivering and using HR solutions and services that have a productive impact on the workforce and the organisation.
Effectiveness
EfficiencySPECIALISTS• Expert knowledge based
solutions provider • Strategy, process and policy
designer / guardian• Maximise knowledge & cross-
assets sharing
HR OPERATIONS• Product and service delivery,
from transactional to professional services
• Covers Resourcing• Includes HRIS and reporting
BUSINESS PARTNERS
• Relationship Managers• Devise HR interventions aligned
with Business needs• Accountability for HR solutions• Assure the delivery of HR
solutions to the business• Embedding solutions in the
business
SPECIALISTS
BUSINESS SUPPORT
• Running HR as a commercial function
• PMO / project pool resource• Finance• Risk management• Analytics/ metrics• Vendor management and
procurement
VENDORS
I N C R E A S E E F F I C I E N C Y & E F F E C T I V E N E S S B Y I M P L E M E N T I N G D I F F E R E N T I ATE D R O L E S W I T H I N H R
Transactions/ Providing
information
Relationship Management/
Case Work
GENERALISTS
28
Learning, Talent, Resourcing & OD
SERVICE & ACCOUNT MANAGEMENT
GROUP HR LEADERSHIP
INTEGRATED HR INFORMATION SYSTEMS & COMMON PROCESSES
GeneralistsHead of HR Business Partners
SpecialistsLearning, Talent, Resourcing & OD Specialist Teams
VE
ND
OR
S
Performance and Reward Specialist Teams
CUSTOMER CONTACT / HELP DESK
Employee/Manager
Self-Service
Call Centre
Mail/Fax
HR OPERATIONS TRANSACTION TEAMS
Res
ourc
ing
Pe
rfor
man
ce M
anag
em
ent
Re
war
d
Peo
ple
Adm
in
HRIS / HR REPORTING
VENDOR MANAGEMENT
Ind
ustr
ial &
Em
ploy
ee S
erv
ices
Lea
rnin
g, T
alen
t &
OD
Pay
roll
HR Operations/ Shared Service Centre
BUSINESS
HR CUSTOMERS
EMPLOYEES
Business Leaders
Line Managers
Potential Employees
Recruits
Current Employees
Former Employees
HR
HR Leadership
Business Partners
T H E R E D E S I G N H A S M U LTI P L E C O S T-E F F E C T I V E D E L I V E RY C H A N N E L S TO C U S TO M E R G R O U P S
You will increase efficiency and effectiveness of HR by implementing a standard model with clearly differentiated roles
BUSINESS SUPPORT
29
A standard operations delivery model will utilise HR Operations’ low cost channels to resolve queries and perform basic transactions, with only highly complex cases and queries being handled by
Specialist Teams (LTROD and Performance and Reward).
• Provide information on policies and procedures • Give contact information for suppliers & 3rd party
vendors• Support self-service issues• Create case record • Create service requests requiring special handling• Basic case resolution
• Accessed via intranet
• Use of ESS / MSS
• Assign transactional queries or actions by specialty area
• Queries or actions logged and managed through to resolution
• Assigned specialist will:– Administer– Investigate– Communicate– Close
• Develop and interpret policy• Decide on exception requests• Resolve referred questions
Self-Service Operations Teams
Administrative Support
Policy and StrategyTier 1
Specialist Teams
HR Operations
Walk-in Centre / Helpdesk
Tier 2 Tier 3Tier 0
Technology Filter
“High Touch” Filter
“Resolution” Filter
Planning & Policy Resolution
HR
Current Employees
Recruits / Former Employees
Business Leaders & Line Management
HR Customers 66%
Target Inquiry Resolution
28% 5% <1%
H R D E L I V E RY M O D E L – A I M I S TO F R E E U P S P E C I A L I S T S & B U S I N E S S PAR T N E R S F O R M O R E S T R ATE G I C W O R K
30
DELIVERY
STRATEGY & DESIGN
People Strategy HR Technology Strategy HR Policy HR Governance Organisational Design Functional Strategies
Resourcing
Workforce / Manpower Planning
Process & Continuous
Improvement
International Mobility
Contractor and Contingency Management
Scheduling and Deployment
Onboarding
Recruitment Administration
Offer
Screening and Selection
Candidate Sourcing
Performance Mgmt
Performance Management
Strategy
Calibration
Year-End Review
Mid-Year Review
Manage Performance / Poor Performance
Set Objectives
Learning
Learning Strategy
Learning Evaluation
Career Development
Learning Administration
Learning Delivery
Learning Design Management
Knowledge Management
Talent
Talent Strategy
Leadership Development
Talent Relationship Management
Succession Planning
Capability Design
Organisation Development
Organisation Development
Strategy
Change Management
Employer Brand Management
Employee Survey
Payroll
Payroll Strategy
Payroll Administration
Payroll Distribution
Gross to Net
Build to Gross
People Admin
Leaver Management
Time and Attendance
Leave and Absence Management
HR Administration
Industrial & Employee
Industrial & Employee Service
Strategy
Labour Relations
Health and Safety
Employee Wellbeing
Employee Relations
Reward
Reward Strategy
Other Benefits
Share Schemes
Retirement and Pensions
Senior Team Compensation Management
Compensation Management
Capability Assessment
Other Financial Incentives
S T AN D A R D I Z E Y O U R H R P R O C E S S E S AC R O S S H R S U B -F U N C T I O N S T O S T AN D A R D I S E D E L I V E R Y
Best practice HR functional design consists of 5 functional job groups
31
Functional HR know-how
Business know-how Implementation know-how
People know-how
• Resourcing
• Performance Management
• Reward
• Talent Management
• People Development
• Organisation Design/ Planning
• HR Legislation
• HR Systems
• Strategic planning
• Business awareness
• Financial tools
• Merger, Acquisition, Integration & Divestment (MAID)
• Problem Solving
• Prioritisation & Planning
• Change leadership and management
• Project management
• Metrics
• Partnering
• Coaching
• Consulting
• Negotiating
D E V E L O P T H E C A PAB I L I T Y O F Y O U R H R T E A M
32
AND F INALLY ………
• Strive for respect not approval
• Replace “no” with options (lots of them), whenever you can
• Focus on what you can change not what you can’t
• Forget corporate politics!
• Let people vent but don’t get pushed around
• Embrace HR’s larger purpose – to get better results through people
Good Luck!