early findings and best-in-class talent management metrics oct 23 - trends in hr... ·...

© AberdeenGroup 2007

HRO - Early Findings

and Best-in-Class Talent Management Metrics -

Kevin Martin Vice President and Principal Analyst, Human Capital Management Aberdeen Group

October 23, 2008

2 • © AberdeenGroup 2007

Workforce Management

Talent Management

Human Capital

Management

Workforce Planning

Workforce Compensation

Learning & Development

Succession Planning

Talent Acquisition

Employee Performance Management

Competency & Assessment

Onboarding

Benefits Management

Time and Attendance

Payroll Scheduling

Absence Management

Workforce Analytics

Source: Aberdeen Group, March 2008


2008 HCM Benchmark Reports (published)

Onboarding (794) – January 2008 Time and Attendance (333) – February 2008 Recruitment Process Outsourcing (211) – March 2008 Total Compensation Management (453) – April 2008 Managing Employee Performance (927) – May 2008 Workforce Collaboration (275) – June 2008 Benefits Management (330) – July 2008 Talent Acquisition Strategies (622) – July 2008 Workforce Planning (250) – August 2008 Learning and Development (535) – September 2008


Aberdeen’s “PACE” Methodology

Pressures: external forces that impact an organization’s market position, competitiveness, or business operations (e.g., economic, regulatory, technology, competitive, etc.) Actions: the strategic approaches that an organization takes in response to industry pressures (e.g. product/service strategy, target markets, go-to-market, and sales strategy) Capabilities: the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products/services, financing, etc.) Enablers: the key technology solutions required to support the organization’s business practices (e.g. development platform, applications, connectivity, user interface, training and support, etc.)


Objective: Determine Best-in-Class Performance

Best-in-Class = top 20% of all organizations surveyed Industry Average = middle 50% Laggards = bottom 30%

Key Performance Indicators (for RPO):

Quality of candidates sourced Satisfaction rate of the hiring manager Candidate’s experience / satisfaction with the recruitment process


- Why Outsourcing? -


NOTE Aberdeen Insight - The 2008 Aberdeen Report

Survey of 4,568 business executives revealed…

“The ‘lift and drop’ mentality dominating outsourcing engagements in the past is being replaced by a partnership mentality in which

providers and end-users work together to add value to processes, improve efficiencies, and

decrease costs”.


- RPO in 2008 -


How RPO is Defined

RPO RPO –– By SizeBy Size

72%

19%

63%

31%

0%10%20%30%40%50%60%70%80%

Outsourcing of select aspects Outsourcing of the entire recruitmentprocess (from sourcing to assessing

to onboarding)

500 - 5,000 5,000+


Top Pressures

RPO RPO –– FindingsFindings

55%

41%31%

21%10% 7%

44% 48%

27%

6%

22% 22%

0%10%20%30%40%50%60%

Lack ofinternal HRresources

Cost ofattracting/recruiting

newemployees

Meetanticipated

staffing levels(i.e.surge)

Inferiorquality of new

hires

Fast-changingindustry

Globalexpansion

500 - 5,000 5,000+


Top Strategic Actions

RPO RPO –– FindingsFindings

32% 37%45% 47%

24%38% 36%

63%

0%10%20%30%40%50%60%70%

Strengtheninternal resources

whereperformance is

sub-par

Outsource specificHR functions

where cost andperformance are

sub par

Improvecompany's brand /

reputation as agreat place to

work

Focus key internalHR resources on

coreorganizationalcompetencies

Best-in-Class Others


Knowledge You’ll Come Away With Today…

Early findings from Aberdeen’s November 2008 HRO research

Best-in-Class Talent Management Metrics


- Early Aggregate Findings –

Aberdeen Group Research on HRO


How Do You Define HRO?

64%

19% 14%3%

0%10%20%30%40%50%60%70%

Outsourcing of anyHR element

deemed necessary(“core” or “non-core” and notlimited to # ofelements)

Outsourcing of coreHR elements only (payroll, benefits,

compensation, andHR administration)

Outsourcing of theentire HR function

(end-to-endprocesses for allHR processes)

Don't know / Notapplicable


Top Macro Pressures Driving HRO

43%38%

30%

0%

10%

20%

30%

40%

50%

Increased competitivelandscape

Compliance requirements(e.g. federal, state, union,

corporate, fair labor)

Current economic climate /uncertainty


Top Internal Organizational Challenges

60%56%

43%

0%

10%

20%

30%

40%

50%

60%

70%

Lower costs of deliveringHR services

Allow HR organization tofocus on core business

objectives

Improved HR service toend-users (employees)


Most Valuable Actions to Ensure HRO Success

53%

27% 26%

0%

10%

20%

30%

40%

50%

60%

Define agreed-toperformance metrics (in

terms of costs and services)that measure pre- versus

post-HRO results

Conduct frequent analysisof HRO program

effectiveness (withinvolvement from company

and provider)

Maintain frequent,scheduled communication

with HRO provider(s)


Hurdles to Widespread HRO Adoption

47%39%

33%

20%

0%

10%

20%

30%

40%

50%

Proof of HR serviceimprovement

Proof of cost savings Ability to provideconsistent

acceptable levels ofservice from anoutside entity

Evidence of HRpersonnel’s ability to

make a morestrategic impact on

the organization


Has HR Become More Strategic Since HRO?

50%

26%

12% 12%

0%

10%

20%

30%

40%

50%

60%

Yes Too soon to tell No Don’t know


Determination that HR has Become Strategic

26% 25%22%

14%12%

0%

5%

10%

15%

20%

25%

30%

Performanceimprovement in

key talentmanagement

objectives

HR is invited toparticipate inkey corporate

leadershipmeetings

Performanceimprovement inorganization’s

operationalmetrics

Don’t know Other


Elements Planned to Outsource

15% 20% 21% 26% 24% 30% 13%

15% 13% 15%

12% 14%

0%

10%

20%

30%

40%

50%

Employee performance management

Leadership development

Compensation management

Training / Learning

Competency and

assessments

HR Administration

CURRENTLY OUTSOURCE PLAN TO OUTSOURCE

87%

58%

62% 75%

47%

50%


Aberdeen’s HRO Survey -live until Nov 4th -

www.aberdeen.com/survey/hro08hroa


Talent Management

Best-in-Class Metrics


The Talent Management Value Chain

Recruit Onboard Performance Mgt.

Learning & Dev.

Succession Mgt.

Offboard


Best-in-Class KPI for Talent Management

√

Management bench strength

√

Positions filled internally

√

√

Employee satisfaction

√

√

√

√

√

Retention

√

√

Employee performance

√

√

Time to Productivity

√ Quality of Hire

S. Mgt L & D Comp ($)

EPM ONB TAS


Best-in-Class Metrics

Succession Planning The priority is to look within and to look beyond the C-

suite

Employee Performance Clearly defined goals and

development plans are key

Onboarding Retention now trumps time-

to-productivity

Talent Acquisition “Quality” has the become the

gold standard


Talent Acquisition

- Metrics -


Metrics that Matter Most: Talent Acquisition

50%

40% 39% 37%33%

27%

40%46%

35%39%

26% 27%30%

41%

24%27%

19%

26%

0%

10%

20%

30%

40%

50%

60%

Quality of hire Time to fill /Time to hire

New employeeretention

Hiring managersatisfaction

Quality ofcandidate

Cost per hire

Best-in-Class Industry Average Laggard


Top Three Metrics that Matter Most

49%

34% 34% 34% 33%35%

24%

37%33%

48%

0%

10%

20%

30%

40%

50%

60%

Quality of hire Quality ofcandidate

Overall hiringmanager

satisfaction

New employeeretention

Time to fill / Timeto hire

Non-HR HR

Source: Aberdeen – July 2008


Quality of Hire

- Disaggregated -


Top Four Indicators of Quality of Hire

81%69%

52%43%

65%56%

44%37%

51%39% 38%

29%

0%10%20%30%40%50%60%70%80%90%

How quickly the newhire performs on the

job productively

Retention rate of topperformers

Candidate's firstperformance review

rating

Character / personalvalues

Best-in-Class Average Laggard


How Quality of Hire is Calculated

Source: Aberdeen – July 2008

72%

53%48%

42%

63%

55%

33%

44%

0%

10%

20%

30%

40%

50%

60%

70%

80%

How quickly the new hireperforms on the job

productively

Retention rate of topperformers

Character / personalvalues

Candidate's firstperformance review rating

Non-HR HR


Onboarding

- Metrics -


Best-in-Class Metrics: Onboarding

Best-in-Class Retention Rate for New Hires = 87%

Completion Rate for Onboarding Tasks = 56%

Time to Productivity for New Hires = 45%

Laggard Retention Rate for New Hires = 48%

Completion Rate for Onboarding Tasks = 16%

Time to Productivity for New Hires = 9%


Metrics Defined – more details

Time-to-Productivity Must be job-role specific Must be tied to key performance objectives (reinforced in quarterly reviews) For example – a sales person who is able to begin calling prospects earlier will improve their quota achievement and customer satisfaction

New-Hire Retention Measured at 1, 3, 6, and 12 months


Metrics that Matter Most

73%

52%

42%

61% 58%

30%

0%

20%

40%

60%

80%

New employee retention New employee productivity Company reputation / brandin recruiting top talent

HR Non-HR


Performance Management

- Metrics -


Metrics Assigned to Performance Management

76%

61% 58%

48%43% 42%

61%

42%51%

32% 31%27%

54%

37%43%

29%25% 25%

0%10%20%30%40%50%60%70%80%

Employeeperformance

Employeesatisfaction /

morale

Employeeretention

Percentage ofgoals attained

EmployeeEngagement

Revenue peremployee



How Employee Performance is Measured

72% 69%

48%40%

61%

75%

46%37%

57%

72%

34%29%

0%

20%

40%

60%

80%

Percentage of goalsattained

Ratings in job-specificperformance reviews

Ratings in project-specific performance

reviews

Efficiencies produced(i.e., decreasedproduction time)



Succession Planning


Succession Planning Defined

A combination of process, tools, and disciplines that enables an organization to plan for anticipated leadership needs as well as identify, develop, retain and allocate key talent.

PrePre--hire through Posthire through Post--hirehire


Best-in-Class Metrics: Succession Planning

Best-in-Class % of Key Vacancies Filled Internally = 63%

Bench Strength = 49% % of positions w/ qualified and willing successor

Performance of Successor = 40% In terms of results and leadership

Laggard % of Key Vacancies Filled Internally = 29%

Bench Strength = 21% % of positions w/ qualified and willing successor

Performance of Successor = 21% In terms of results and leadership


Q & A


Thanks for your interest in Aberdeen’s research!

Kevin Martin Vice President and Principal Analyst,

Human Capital Management [email protected] 617-854-5314

early findings and best-in-class talent management metrics oct 23 - trends in hr... ·...

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