7 strategic steps to hr relevance
TRANSCRIPT
7StepstoHRRelevancePamelaJ.Green,MBA,SPHR,ACCTheHRCoachingandCareerIns2tute
@pamelajgreenTweetResponsibly
HR’sBusinessChallenge
HowCanHRDemonstrateBusinessRelevanceandAddValuetothe
BoGomLine?
Beingcapableofmakingadifferenceindecision-makingwithNmelyHR
informaNontoimpactthepresentandfutureoutcomesdesiredbyyouandyour
organizaNon.
HRRelevance
RecentCEOQuotesAboutHR
“TheseniorHRexecuNve[needstobe]abusinesspersonfirstandanHRleadersecond.Theyneedto
decipheranddeliver.”
“Humanresourcesmustuptheiract…”
“HRneedstopreparepeopletoacceptchangeandbehaveinnewwaystoachievethefirm’sgoalsand
realizeitsreturns-on-investment(ROI).”
AreHRandOrganiza2onalPriori2esAligned?Asurveyoftopstudiessuggestthattheymightnotbe.
Organiza2on’sPriori2es HR’sPriori2es
1. MatchtalentneedswithorganizaNonalstrategies.
2. MasterthebasicelementsofHR.
3. Predictoutcomes.4. Diagnoseproblemsand
prescribevalueaddedacNons.5. Useanaccurateandcomplete
viewofworkforcecoststoevaluatedecisions.
1. CommunicaNngHRiniNaNvescompanywide.
2. Employeeengagement.3. ProvingtheROIofHR
iniNaNves.4. Costmanagement.5. Focusontechnology
andperformancemanagement.
Sources:EREMedia,Forbes,EntrepreneurMagazine,HCI,CIPD,HBR
7STEPSTOHRRELEVANCE
Step1:BuildCredibility
• Establishstrategicpartnerships• Demonstratefiscalresponsibility• Serveasinternalconsultant• Respectedasthechieftalentexpert
EstablishStrategicPartnerships
• IdenNfy,modelandimplementbestpracNces.
• SupportorganizaNonalwork.• EnsurecrossagencyandcrossorganizaNonalcollaboraNon.
DemonstrateFiscalResponsibility
• DeterminetheRIGHTmeasuresthatdemonstratevalueandstrategicbenchstrength.
• IdenNfystrategiesandbusinessproblemsthatlinkHRtovalueandprofitability.
ServeasInternalConsultant
• IdenNfythenewbehaviorsneededtoachievegoals.
• PinpointtechniquesthatensurethesupportandsustainabilityofHRprogramsandsystems.
RespectedastheChiefTalentExpert
• KnownforaGracNnganddevelopingatalentedanddiverseworkforcethroughworkforceplanninganddevelopment.
• DesignscenarioandstrategicworkforceplanstoalignHRwiththecorestrategy.
Step2:Determinewhatkeystakeholderscareabout
• UnderstandthatHRisnotmonolithic.• Knowthebusiness.• LookforwaystoconnectwithandidenNfywhat“they”wanttoaccomplish.
• PutHRonthefiringline.
TopLeaderPriori2esInclude…
• WorkforceDevelopmentandRetenNon• TechnologyChanges(mulNchannel,e/mcommerce)
• BusinessGrowthandDevelopment• AddressingCompeNtor’sAdvancingMarketShare
• BusinessSecurityandRecovery
Step3:KnowWhat’sTrendinginHR
• HRISSystemsandSecurity• DataAnalysis• FinancialAcuity• HealthcareCosts• TalentManagement• EmployeeEngagementandDevelopment
Step4:LinkHRtoProfitability
• SalesGrowth:AnalyzethepaceatwhichyourorganizaNon'ssalesrevenueis/notgrowingandtheHRimplicaNonsandrelatedstrategies.
• WorkingCapital:MeasureyourorganizaNon'sfinancialhealthbyanalyzingtalentreadinessandcapabilitytomeetanyshort-termobligaNons.
Step4:LinkHRtoNFPProfitability• Development:AssesstheoperaNonalcosts,especiallythequanNty/qualityoftalentneededtoraise$1.Forexample:– CapitalCampaign/MajorGils$.05to$.10perdollarraised.
– DirectMailRenewal$.20perdollarraised.– DirectMailAcquisiNon$1.00to$1.25perdollarraised.
• SalaryandBenefits:EnsuretheyareproporNonedtorevenuetheorganizaNonwillraiseduringtheyear.
Step4:Con2nued…AtmeeNngslistenforthefollowingwords:
ExpansionDownsizeReducNonsRisk-Adverse
NewTechnology/ProgramLong-termgoal
Sluggishsales/revenue/incomeAcquisiNonGrowth
CompeNNonProducNvity
Step5:KeyMeasuresthatLeadtoResultsandROI
• RetenNonValue:Hire/Develop/SeparaNon(employeeretenNon=moneyretenNon)
• Employeereferralrates• Revenueperemployee:(Revenue-OperaNngCost)/TotalFTE
• SaNsfacNon/engagement(predictturnover)
Step5:Con2nued…
• TieEmployeePerformancetoCustomerSaNsfacNon/RetenNon
• MeasureEROI-thepre-taxdollarsgeneratedforeverydollarinvestedinemployees.ThismetricshowshoweffecNvelytheinvestmentinemployeesissupporNngtheorganizaNon’sgoals.ThelargerthepercentagereturnthemoreeffecNveyourinvestmentinpeopleisworking.
EROIExampleEROI={(Revenue–(OperaNngCost–LaborCost))/LaborCost}-1Forexample,ifanorganizaNonhas:Revenueof$4.5millionOperaNngCostsof$3.75millionLaborcostsof$1.5millionthentheEROI={(4,500,000-[3,750,000–1,500,000])/1,500,000}–1=0.5=50%Or,foreverydollarinvested,theorganizaNonreceivesbacktheoriginaldollarand50centsofpre-taxprofit.Thisisdescribedasa50%return.
HRProfitCenterModel
BusinessProblem
Costofthe
Problem
HRSoluNon
CostoftheHRSoluNon
$Benefitfrom
SoluNon
Cost–Benefit=Profit/Loss
Source:TurningYourHRDepartmentintoaProfitCenterbyMichaelMercer
YourApproach
• ThecostofthesoluNonshouldnotexceedthecostoftheproblem
• Monitorindustrysalarytrends– DetermineyourcompeNNveness(WhatarecompeNtorsdoing?)
• Capturethebenefit/expenseofTraining,MeeNngs,ProducNvity,AbsenteeismandTardiness
YourMethodology
• AnNcipatebusinessneeds– Growth/declineinrevenue
• Yoursolepurposeistofigureoutwaysto:– Increaseprofit– Decreasecosts– Makeemployeesmoreefficient– ImproveproducNvity
Step6:ElevateYourCapability,Competency,andCredibility
• ScenarioPlanning• StrategicWorkforcePlanning• LeanSixSigma• HRFinancialReports• MetricsandAnalyNcs• CyberSecurity
ScenarioPlanning1)Developcrediblescenarios.
EvaluatethewidevarieNesofpotenNalinfluencesonyourbusinesses,fromcustomermovestosupplierchanges,shilsinenergyprices,andcompeNNveacNonsetc.
2)Theniden2fysuccessfactorsorcompetenciesforyourorganiza2ontoflourishineachscenario.
Managingchange,collaboraNon,technicalcapabiliNes,innovaNon,customerservice,etc.
ScenarioPlanning
3)HRandtopmanagementshouldthenfocusresourcesondevelopingthesecompetencies.
ExpectedFuture
Alterna2veFuture#1
(Preferred)
AlternaNvePossible
Future#2
WorstCaseScenario
StrategicWorkforcePlanning
AlignstheneedsandprioriNesoftheorganizaNonwiththoseofitsworkforceto
ensureitcanachieveitsbusinessrequirementsandorganizaNonalobjecNves.
Demand Supply Gaps AcNons
LeanSixSigma
AmethodologythatreliesonacollaboraNveteamefforttoimproveperformancebysystemaNcallyremovingwaste:Defects,overproducNon,waiNng,non-uNlizedtalent,transportaNon,inventory,moNon,anddownNme.
Step7:EnsureSustainability• HRisalignedwithvision,mission,andstrategy–alsoinvolvedinstrategicplanning.
• Thereiscommitmentbytopbrass.• IfmorethanoneinHR,othersarecommiGedtothework.
• HRinvolvementbecomespartofyouroperaNonalDNA:PerformanceReviews,discussions,calibraNons,businessgrowth,etc.
ShowcaseHRRelevance
1. Determinewhatkeystakeholderscareabout.2. KnowwhatistrendinginHR.3. LinkHRtoprofitability.4. IdenNfykeymeasuresthatleadtoresults
andROI5. Elevateyourcapability,competenceand
credibility.6. Ensuresustainability.
ShowcaseHRRelevance
• Track,analyzeandsolvebusinessproblemsfromaprofit/valuecenteredperspecNve(notjustserviceoriented)
• DeliverpresentaNonstoleadershipaboutprofit/valuecenteredeffecNveness
• TrainandcoachHRstafftothinkfromaprofit/valuecenteredperspecNve
ResourceBooks
