unleashing human capital
DESCRIPTION
Unleashing Human Capital to Drive the Next Wave of GrowthTRANSCRIPT
HCM Global Pty Ltd © 2003 1
Anna-Lucia Mackay & Anthony Sork
www.hcmglobal.biz
Unleashing Human Capital to Drive the Next Wave of Growth
HCM Global Pty Ltd © 2003 2
HCM Global Pty Ltd © 2003 3
AGENDA
• Understanding Human Capital Management (HCM) as a strategic driver of enterprise growth
• Best Practice HCM programs
• Integrating HCM infrastructure across the organisation
HCM Global Pty Ltd © 2003 4
TRANSITIONING HR TO HCM
• “Do more with less” has pressured a change to the structure and purpose of central departments
• No longer can “administrative centres” exist without clear contribution to the bottom line
• Corporate services now required to be consultative and strategic
• In the knowledge economy, attraction and retention of talent is the key differentiator to business success
• To devise and successfully implement a Human Capital Strategy that facilitates business performance and enables business growth is the purpose of this corporate service today and into the future
HCM Global Pty Ltd © 2003 5
MCKINSEY REPORT – WAR FOR TALENT
The survey comprised of 400 corporate officers and 6,000 executives from the “top 200” ranks in these companies.
• Only 33% of the 6,000 “top 200” executives strongly agreed that their companies attract highly talented people
• Just 10% strongly agreed that they retained their high performers
• Only a paltry 3% said their companies “actually developed their people quickly and effectively, or move low performers out quickly”
HCM Global Pty Ltd © 2003 6
THE CEO VIEW
HCM Global Pty Ltd © 2003 7
HOW ARE WE PERFORMING
HCM Global Pty Ltd © 2003 8
THE SCORE CARD
• Very good on the HR basics – Administration
• Key areas to improve:– Recruitment– Retention
HCM Global Pty Ltd © 2003 9
“The very definition of Human Capital is that it walks out the door every evening, and exits permanently with an employee who
leaves a company.”
Gary S BeckerNobel Prize winning economist
HCM Global Pty Ltd © 2003 10
HUMAN CAPITAL
Human Capital
Ability/
Competency
Intellectual/
Knowledge
Relationships
Internal/External
HCM Global Pty Ltd © 2003 11
HUMAN CAPITAL MANAGEMENT MODEL
Source: HCM Global 2003
EMPLOYER
OF
CHOICE
PEOPLE
PRODUCT &
PROCESS
SYSTEMS
BUSINESS STRATEGY
&
OBJECTIVES
RETENTION
DEVELOP & RECRUIT
HUMAN CAPITAL MANAGEMENT STRATEGY
Able toExecute
Unable to Execute
HCM
HCM Global Pty Ltd © 2003 12
HUMAN CAPITAL MANAGEMENT
HCM Global Pty Ltd © 2003 13
ATTRACT
HCM Global Pty Ltd © 2003 14
WHERE TO START
• Who are you trying to attract?
• What talent do you know your organisation requires?– Linked to organisation strategy and key objectives
• Profiling your targeted talent
• Understand what creates Employer of Choice status for your targeted talent– Note this varies across generations and industry
• Create an Employer of Choice strategy
HCM Global Pty Ltd © 2003 15
2003 EoC Research
John Galloway GM Classified, careeroneHuman Capital October 2003
EoC selection criteria: all industries
31%
9%11%16%
19%
14%
Career developmentopportunities
Management style andstructure
Prestige-local andinternational perception
Salary and remuneration
Working environment andcompany resources
Workplace culture
HCM Global Pty Ltd © 2003 16
RECRUIT
HCM Global Pty Ltd © 2003 17
“Through the influence of skill specialisation, low unemployment rates and the recognition of the value of people to the performance of
the business, the recruitment process has become as much about candidates selecting the employer as the employer
selecting the candidate.”
Debbie LoveridgeDivisional Director – Select Australasia 2003
HCM Global Pty Ltd © 2003 18
CURRENT MARKET CONDITIONS
• Recruitment procedures and tools have become quite sophisticated
• Targeted selection has become very effective
• Our administrative strengths now threaten our ability to actually achieve the desired recruitment objective
• Thoroughness of process has directly impacted length of process
• Length of process is one of the greatest influencers on candidate decision making – The “you snooze you lose” effect
• There is a fine line between creating desire for a position and creating a barrier of entry and a perception of bureaucracy
HCM Global Pty Ltd © 2003 19
BRAND VALUE
• The recruitment process will heavily influence your brand value and brand power
• The recruitment process for successful candidates will either facilitate or hinder the bonding process
• For unsuccessful candidates, a poor recruitment process can have far reaching effects both on consumer perceptions and on future talent attraction
HCM Global Pty Ltd © 2003 20
RETAIN
HCM Global Pty Ltd © 2003 21
EMPLOYEE BONDING CRITICAL TO RETENTION
ROTATION/CONTEXT
ORIENTATION
CORE/CENTRAL MESSAGES
INCREMENTAL LEARNING
90 DayCriticalPeriod
Source: HCM Global 2003
HCM Global Pty Ltd © 2003 22
EoC FOR EXISTING STAFF
• Many organisations focus their EoC strategy on attracting talent based on current business objectives
• Many neglect the need to develop an EoC strategy that addresses both attracting and retaining talent
• Most neglect the need to do this both based on current business objectives as well as future business objectives
• Your desired Human Capital will change along with your business
HCM Global Pty Ltd © 2003 23
EoC STATUS AND BUSINESS GROWTH
1 yr
2 yr
3 yr
4 yr
Exis
tin
g S
taff
Targeted Staff
TIME
HCM Global 2003
HCM Global Pty Ltd © 2003 24
THE PSYCHOLOGICAL CONTRACT
“Psychological contracts are implicit, involving an individual's beliefs of reciprocal exchange between two parties pertaining to trust,
loyalty and the well-being of all involved.”
SL Rousseau
HCM Global Pty Ltd © 2003 25
4 ELEMENTS OF THE PSYCH CONTRACT
1. Contract – Focus• Willingness to go beyond the confines of the employment
contract• Degree of focus on employer and job as source of
remunerative benefit alone2. Perceived Equity
• Degree of perceived equity in the behaviour of the company towards employees
• Inputs and outcomes3. Involvement
• Degree to which an employee remains involved in and invests in the activities of the company
4. Time-frame• Expected length of employment relationship based on
intentions and perceived long-term prospects with the employer
HCM Global Pty Ltd © 2003 26
INVEST IN PEOPLE DEVELOPMENT
• Many elements within your businesses will influence retention of key talent – Watson Wyatt identify the following in their Human Capital Index:1. Recruiting Excellence2. Clear rewards and accountability3. Collegial and flexible workplace4. Communications integrity5. Prudent use of resources
• Key to your Employer of Choice strategy for desired, existing and future talent and influencer of the Psychological contract is your willingness to invest in people development
• Gen X and Gen Y demand it!!
HCM Global Pty Ltd © 2003 27
ORGANISATION LEARNING PATHWAY
• One of the easiest ways to integrate a HCM infrastructure across the organisation is by leveraging your people development system
• Ensure you link people development and career progression
INDUCTION
FUNCTIONALLY SPECIFIC TRAINING
MENTOR/COACH
LEADERSHIP
EXECUTIVE
MANAGEMENT
HCM Global Pty Ltd © 2003 28
PEOPLE DEVELOPMENT AS HCM INFRASTRUCTURE
Some of your key objectives may include:
– To provide an environment in which all staff have the opportunity to develop themselves as far as their ability and desire will allow
– To design, develop and implement a comprehensive organisation development program which enables development for all staff across all positions and divisions within the company regardless of length of service
– To develop talent from within in line with key organisation objectives
HCM Global Pty Ltd © 2003 29
HCM AS A STRATEGIC DRIVER OF GROWTH
• Organisations that invest in their people are commonly associated with higher revenues per employee
• Measurable HCM factors such as staff retention and absence due to sick leave show a strong link to profitability
Source: Global Human Capital Survey IBM Business Consulting Services
HCM Global Pty Ltd © 2003 30
www.hcmglobal.biz