linking leadership to workforce productivity webinar

7/30/2019 Linking Leadership to Workforce Productivity Webinar

1/23

December13,2012

HumanCapitalManagementInstitute

Presents:

LinkingLeadershiptoWorkforceProductivity

HUMAN CAPITALMANAGEMENT INSTITUTE


2/23

AboutHumanCapitalManagementInstitute

HCMI Background:

SpecializedinHRanalysis&measurement

DeepexpertiseinWorkforceAnalytics&Planning

BoardmadeupofCFOsandHRheads

Over40yearsofexperience

What We Do:

Measuretheimmeasurableinhumancapital

Transformworkforcedataintobusinessintelligence

ProvideToolsandTrainingsoHRcanPartnerwithFinance

2

WorkforceAssessment StrategicConsulting Training

BestPractices WorkforceAnalyticsandPlanning Benchmarking

TheHumanCapitalManagementInstitute(HCMI)wasfoundedonthebeliefthatorganizationscanandmust,findbetterwaysofmeasuringtheirinvestmentsinhumancapital.Ourvisionofthefutureisoneinwhichhumancapitalmeasurementandinformationisasintegraltobusinessdecisionmakingasfinancialinformationistoday.

We

Bring

Financial

Discipline,

Standards

and

Rigor

to

the

HR

Function



3/23


4/23

ValueCreationinTodaysMarketplace

PostIndustrialMarketplaceMarketvalueIsdrivenprimarilybyfactorsthatdonotshowuponthebalancesheet.ThelargestbeingIntellectualorHumanCapital*.


5/23

TheChallengeofMeasuringHumanCapital

Compensation

Transfers

New HireTurnover

SuccessionData

Turnover

Training

Recruiting

EmployeeData

Benefits

Span

of Control

WorkforcePlanning

SuccessAdvanced

AnalyticInsights

ComplexityofWorkforceData

Employee/FullTimeEquivalent(FTE)

Jobs/Roles/Skills

Time Tenure

Compensation($vs.Equity)

Frequencyof

Change

Promotions,Transfers,Hires,Terminations

Jobs/Roles/Skills

Time Tenure

MeasuringtheIntangible

LackofStandards

LackofAnalyticSkills

HumanCapitalManagementInstitute 5


6/23

MeasuringComplexActivitiesandActions

6HumanCapitalManagementInstitute

BaseData NoMetrics

Calculated

Metrics

(e.g.turnoverrate)

SimpleMetrics(e.g.headcount,terminations)

CombinedSourceMetrics(e.g.Timetoprofitability)

InsightfulMetrics(e.g.RevenueperFTE)

AdvancedMetrics(e.g.Careerpathratio)

IndexMetrics(e.g.Newhiresuccessrate)

ComplexIndexMetrics(e.g.QualityofHire)

Measuringmanagereffectivenessand

productivityrequires

advancedmeasuresandmetrics

HCMIMetricsHierarchy


7/23

WorkforceProductivity


Workforceproductivityistheamountofgoods,services,productionorwork

unitsproduced

in

agiven

amount

of

time

with

agiven

amount

of

inputs.

Thiscanbeexpressedasanorganizationtotal,orasanaverageperemployeeorFTE.

Definition:

ExampleProductivityMetrics:

UnitsProduced HoursWorked TimetoProductivity OpenPositionLostRevenueorProductivity EmployeeEngagementRevenueLinkage


8/23

HowDoWeMeasureWorkforceProductivity?

Sales

Professional

Operations

WorkforceCategory JobGroup

SalesManager

AccountExecutive

Consultant

Developer

CallCenterRep

WorkforceMetric

RevenueperFTE,ProfitperFTE,PercentofQuota

TimetoProductivity,PercentofQuota,CustomerSatisfaction

Engagement,BillableDays,

TrainingInvestmentperFTE

Engagement,PerformanceRating

%of1st CallsResolved,CustomerSatisfaction

BusinessOutcome

Revenue,Profit,SalesGrowth

Revenue,Profit,CustomerRetention,NewAccounts

Revenue,Profit,Cost

NewProductROI,Cost

UnitVolume,Output,Sales



9/23

QuantifyingManagerEffectiveness

Canyouquantifywhichmanagersaremoreeffectiveatmanagingtalent?

ManagerA Manager

B

Hiresexperiencedemployees

Exceededbusiness

performancegoals

Highemployeeturnover

Lowemployee

mobility

Hiresjunioremployees

Exceededbusinessperformancegoals

Trainsandgrowsteammembers

Employeesstayandmoveupintheorganization

Highemployeeperformance



10/23

LeadershipandtheTalentManagementLifeCycleQuantifyingWorkforceandHRImpact

Butwhatarekeymeasuresateachstageinthetalent

managementlifecycle?

Howshouldthesemetricsbereportedandanalyzed?

Leadershiphastheabilitytoaddvalueandimpactproductivity

acrossallelementsofthetalent

managementlifecycle.

10

Recruiting&Hiring

Training

(L&D)

Performance&Engagement

MobilityCareerPath

Turnover&Retention

Leadership&

Management



11/23

HumanCapitalFinancialStatements(HCF$)

GreaterTransparency intoanorganizationsgreatestasset:theworkforce

AMethodtoValueKnowledgeCapital: measureknowledgecapital,the80%ofmarketcapitalizationnotcapturedbytraditionalfinancialstatements

ImprovedInvestmentDecisions: betterinformation=moreinformedinvestmentdecisions

StandardsinHumanCapitalMeasurementandReporting:enableadvancedbenchmarkingcapabilities forindustry,geographic,specificjobrolesandmore

DefinitiveMethodologyforQuantifyingWorkforceProductivity:quantifiesproductivityandtalentmanagementimpactacrossthetalentmanagementlifecycle

TrueLinkageofHumanCapitaltoFinancialResults

DeliverHRValuewithHumanCapitalFinancialStatements:



12/23

HighLevelOrganizationProductivity


Traditional

Productivity

Metrics

LeadingProductivity

Metrics

SummaryHumanCapitalImpactStatement

HumanCapitalROIRatio PriorYearCurrentYear%Chg

RelativeValueAdd(Productivity)by

JobGroup


13/23

ProductivityAcrosstheTalentManagementLifecycle


TalentManagement

Impact

Leadershipimpactsmetricsandcreatesordestroysvalueacrossmultipleareasofthetalentmanagementlifecycle.

CriticalMetric:TalentManagementIndex


14/23

TalentManagementIndex

Description:

Talent Management Index is a custom index metric that allows organizations to weight andcombine individual manager results to predict management impact on performance,engagement, retention and talent development at the organization.

Formula:

Talent Management Index should include Percent of High Performers, New Hire HighPerformer Rate, Career Path Ratio, Voluntary Turnover Rate, High Performer Turnover

Rate, Employee Engagement Score, and New Hire Turnover Rate, and may include additionalmetrics depending on organization goals and strategy.


Best Use:

This metric is designed to measure management on effective and efficient execution ofresponsibilities in leading and managing talent at the organization. This metric is optimized whenanalyzed by manager or business group, and leveraged in combination with Span of ControlandTotal Cost of Workforce.


15/23

ExampleTalentManagementIndex

CareerPathRatio

20%

NewHireHighPerformerRate

Mobility

HighPerformerTurnoverRate

%ofHighPerformers

PerformanceManagement

TurnoverandRetention

TotalCostofWorkforce%ofExpenses

CostofWorkforce

20%20% 20% 20%

RecruitingandHiring

TalentManagementIndex

The Talent Management Index is a holistic measure encompassing a managerstotal talent management practical results and impacts. Such a metric can beused as an incentive compensation modifier. It is designed to hold seniormanagement accountable for Talent Management. Ideally, all index metric

components should be calculated on an individual manager basis.



16/23


CaseStudies


17/23

CaseStudy:EstateManagerProductivityLinkageModelFarmingandAgricultureIndustry

RevenueAbsence

RateTurnover

RateProfit

KeyQuestions:

Ifestatemanagerperformanceindexgoesup5%,whatdoesthebusinessget?

Ifestatemanagersincreasetheirperformanceindex,whatelseisimpacted?

ManagerPerformance

Index

+5% 30% 20% +6% +7%

Increaseinmanagerperformanceindex

Drivesadecreaseinturnoverandabsencerate,andanincreaseinrevenueandprofit

EstateManager

Productivity

LinkageModel

Basedonanalysisofapproximately120estates,thevalueofa5%increaseinmanagerperformanceindex=$125Mannually(costsavingsandproductivityincrease).



18/23

CaseStudy:KeyTurnoverDriver ManagementFinancialServicesIndustry

*Managerswithunder1yearofsupervisoryexperience**Managerswithonly1directreport

ManagementGroup

PercentofManagers

PercentofTurnover

30%

34%

22%

14%

10%

81%

8%

2%

LowTurnover

HighTurnover

NewManager*

1Employee**

Inmostcompanies,thequalityofmanagementisakeycomponentofemployeeturnover

Itispossibletosegmentmanagementpopulationbyhighandlowturnovermanagers

Lookformanagerswithturnoverdisproportionatetothesizeandmixoftheirworkforce

Highturnovermanagersdrivehighertotalcostofworkforce


19/23

$58$110

$148

$203$222

$250


20/23

CaseStudy:InternalCareerPaths

Real

Estate,

Rental

and

Leasing

Industry

StaffAccountant

Mgr.,Accounting

Dir.,Accounting

Accountant

Sr.Accountant

CAGR:CompoundAnnualGrowthRate

Accounting Job Family Career Salary Progression

$46,400

$49,600

$59,800

$67,000

$79,100

$94,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

0 1 2 3 4 5 6 7 8 9 10 10+

Years of Experience

BaseS

alary

Staff Accountant

Accountant

Sr. Accountant

Mgr., Accounting

Dir., Accounting

Ave Annual Rate

Market Rates(50%-75%ile)

CAGR = 10.0%

$130,000

CAGR = 6.6%

Entry level Staff Accountant

hired at 50%ile needs annual

salary growth of 10.0% to stay

with market(Assumes mkt growth of 3% annually

w progression to . Director in 10years.)

50th %ile

ThetenyearcostsavingsistheareabetweenthecostofExternalHirescomparedtothecareerpathofanInternalStaffAccountant



21/23

SOLVE:DeliverAnalyticsValuein3EasySteps

21HumanCapitalManagementInstituteSourceSystems

1. SourceandLoadData

2. AnalyzeTrendsandModelScenarios

3. QuantifyWorkforceROIandDeliverInsights

DataIntegrationBlueprint

Dashboards

Human CapitalFinancial Statements

Metrics

WorkforceROI

Standards

WorkforcePlanningSOLVEWORKFORCEINTELLIGENCESOFTWARE


22/23


QuestionandAnswer


23/23

ContactInformation:

23


Presenterinformation:JosephMorrissey,VPSales

[email protected]

GrantCooperstein,[email protected]

Formoreinformationaboutthefollowingproductsandservices,pleasevisitthelinksbelow:SOLVE WorkforceROICalculator HumanCapitalFinancialStatements

Training HumanCapitalMetricsHandbook ThoughLeadership

WorkforceIntelligenceConsortiumGroup

@HCMI


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