美世-ANewApproachtoHumanC.ppt

CONFIDENTIALThispresentationcontainsproprietarymethodologiesandtoolswhichareonlyforreviewandremainthepropertyofMercerHumanResourceConsulting ThesemethodologiesandtoolscannotbeusedordisclosedwithoutwrittenconsentbyMercerHumanResourceConsulting 2004 MercerHumanResourceConsultingLLC ANewApproachtoHumanCapitalStrategy HelpingHumanResourcesBecomeaStrategicPartnerWorkforcePlanningandDevelopmentConference Agenda LessART moreSCIENCE ANewApproachtoHumanCapitalStrategyUnderstandingthedynamicsofyour InternalLaborMarket CaseStudiesQ A LessART moreSCIENCE ANewApproachtoHumanCapitalStrategy HumanCapitalisoneofthelargestexpensesthatorganizationsunderstandtheleastabout Asaresult evenmodestgainsintheefficacyofHRmanagementcandeliversizeablegainstothebottomline 36 ofrevenue Thequesttofindthe HolyGrail hasledtoaproliferationofideasandapproaches Thequestionisnolongerwhethertomeasurebut whichmeasuresmostdirectlyimpactyourbusinessperformance whichmeasuresaremostrelevanttoyourorganization AframeworkforHRTransformation HRStrategy Strategy structure processesofthefunction HumanCapitalStrategy The people complementtobusinessstrategy managementoftheworkforce Valuecreation Costmanagement Organizationsmustcontinuallybalancetheneedforprudentcostmanagementwiththerequirementtocreate sustainproductivityandbusinessvalue Whereisyourorganizationcurrentlyfocused HRStrategy Strategy structure processesofthefunction HumanCapitalStrategy The people complementtobusinessstrategy managementoftheworkforce Valuecreation Costmanagement WorkforceimpactofHCprograms policies Co SourcingandOutsourcingofHRfunctions ImprovedHRservicedelivery StreamlineHRprocesses MeasuringbusinessimpactofHCprograms policies Overalllaborcostmanagementstrategy Outsourcing Off shoring HRTalentManagement RewardslinkagetoStrategicObjectives CulturalTransformation Strategydependentvs strategyneutralcosts DemandManagement Leveragingtechnologyinvestments Leverageworkforcedata AframeworkforexaminingHumanCapitalStrategy Humancapitalstrategyisablueprintthathelpsanorganizationsecure motivate andmanageitsworkforcetoaccomplishbusinessgoals Thekeyresidesinbeingabletocausallylinkhumancapitaltacticsandpracticestoworkforceandbusinessoutcomes BalancedScorecard speoplecomponent MONITORING ACCOUNTABILITY CapabilitiesBehaviorsAttitudesEngagementSatisfaction WORKFORCEOUTCOMES Anecdotes Reactivechecks Simulationsandfore casting Correlations Benchmarks On goingreports Causation Mostpowerful Data Information Insights Predictions Stories The ArtofHR isslowlybeingreplacedbytheScienceofHumanCapitalManagement Advancesininformationtechnologyandanalyticmethodsaremakingitpossiblefororganizationstomanageinvestmentsinhumancapitalinawaythatcanhaveameasurableimpactonbusinessperformance Themostpowerfulapproachesmovebeyondbenchmarking correlationtocauseandeffect Source 330HRinterventionsthatimpactedproductivity1975 1985 RichardA Guzzoetal UniversityofMaryland updated1996byMercer Whybenchmarkinghumancapitalpracticesoftenmissesthemark ResearchhasshownwidedifferencesintheaverageeffectsofspecificHRinterventions AverageeffectsarenotasufficientbasistoguidethedevelopmentofaHumanCapitalStrategyforaparticularorganizationduetotheoverridingimportanceofbusinesscontext Contextrevealsthedynamicsuniquetoeachorganization Itvariesevenamongdirectcompetitors andacrossbusiness functionalunitswithinthesameorganization HumanCapitalTrackingMetrics HCScorecard ExternalMarketDatabase HRISandPayroll OtherInternalSources e g ApplicantFiles TrainingInventory EmployeeSensing HCManagementDatabase LaborMarketData MarketandIndustrydata PerformanceDatabase Companyorbusinessunitfinancials Dataonqualityandoperationalperformance CustomerData COMMONDATAPLATFORM AHumanCapitalDataWarehousecanbeconstructedbyintegratingmultiplesources StatisticalModeling Forecasting SizeEmployeeheterogeneityRiskPayEmploymentVariabilityPriorTurnoverBranch teamPaystructureIncentivePayoutsTotalDispersionSupervisionStructure complexitySpansChainStabilityWorkloadOrganizationprofileExperienceTenureEducationNE EMixFT PTMixRecruitingsourcePerformance level volatility Turnoverrate AgeGenderEthnicbackgroundEducationTrainingExperienceNumberandDurationofJobsPriorIndustryPriorjobtypeJob occupationExempt non exemptstatusFulltime parttimestatusTenureCurrentjobOrganizationWageLevelGrowthLevelSalarygradeIncentiveearningsPromotionhistoryPerformanceratingsTransferhistoryLocation work home UnemploymentratesMarketshareCompetition locationandnumber LaborpoolDemographicsIncomeEducationOccupationEmploymentcost Employeeattributes Organizationalpractices Externalinfluences Strategy LineofbusinessGrowthProfitability ExternalEnvironment Hundredsofvariables internalandexternaltotheorganization canbeanalyzed Anewwayofthinkingabouthumancapitalstrategyisemerging StopcopyingLookinside Leveragethedatayou vebeencollectingMeasuretheROIonyourvariousworkforcepracticesDifferentiatebetweenhigh yieldtactics andmarginalinvestmentsMatchhumancapitalstrategytoyourbusinessmodel Threeunderlyingprinciplesdrivethisnewapproach Businessmodelsandhumancapitalstrategiesmustmatch INSISTON SYSTEMSTHINKING GETTHERIGHTFACTS FOCUSONVALUECREATION Tapintotherunningrecordofyourcompanyforspecificinsights Knowandfocusonwhat simportanttodrivevalue TechCounwittinglydrovepeoplewithkeyinstitutionalknowledgeoutthedoor Insistonsystemsthinking Bystabilizingsupervisorturnoverandgivingpeopleasenseofcareeropportunity overallturnoverwasreducedbyover20 Gettherightfacts CaseExamples Hire20 morefromemployeereferrals Turnoverdrivers Percentagepointreductioninturnover 0 2 5 7 10 1 pointriseinunemployment 10 reductioninlayoffs Increasejobsperformed from1to2 1 yeardecreaseincurrentposition 10 basepaygrowth 10 marketpayadjustment Ifpromotedwithinlastyear Ifincentivesreceived Supervisordidnotleave Focusonvaluecreation Saved 5million Destroyed 30million Understandingthedynamicsofyour InternalLaborMarket 11 72 125 190 312 116 Hires 17 49 123 184 227 86 Exits Promotions 5 830 Careerlevel Lateralmoves 234 45 341 186 81 38 16 81 85 134 129 Anorganization scurrentworkforceistheresultofthree laborflows Theflowscanbesegmentedbybusinessunit jobfamily demographics and ANNUALCAREERPROGRESSION VOLEXITSTOTALEXITS 7931 542 70134 128233 102233 2 37 4 8 7 13 1 0 0 0 12 4 1 1 0 11 28 2 4 0 10 55 2 10 2 9 21 1 11 1 8 91 2 11 2 7 59 4 13 4 6 55 2 15 1 5 75 4 11 4 4 84 3 15 5 3 120 12 17 18 Level ACTIVEEMPLOYEES throughmodeling canrevealwhattalentyou rebuilding andlosing overtime Thissametypeofanalysisformsthebasisforworkforceforecasting Thenumberofemployeesfor2006arethe expectednumbers giventhecurrentworkforceandexistinghiring promotion retentionandtransferpractices 10 9 8 6 5 4 7 51 49 43 57 33 67 0 100 66 34 72 55 45 12 25 2 Level 49 41 48 52 0 100 34 66 54 46 60 40 95 18 114 349 5 12 NewHires ofTotal Female Male Averageactiveemployees TotalExits ofTotal Promotions ofAvailable 28 51 59 andanalyzingtheequityofrewards andtheresultingimpactonworkforceinitiativessuchasdiversity Promotionprobabilityfrom Managers Staff Denotesthepromotionrateholdingconstantlegitimatefactors butthemanagerialpromotiongapreflectsdifferencesinqualifications AccountingforlegitimatefactorsRawstatisticsshowthatminoritiesarelesslikelytobepromotedfromtwoofthreestafflevels DoIhavetherightworkforce HowdoIchangethecompositionofmyworkforce Whatarethefastest mostcosteffectivewaysofensuringadequatestaffingatcriticallevelsorincriticaljobswithintheorganization Istherewardsystemeffective AmIpayingandpromotingtherightpeople Areourpaypracticesputtingusatrisk Areweontracktomeetourdiversitygoals Whatisthevalueofinternaljobmovement Canprofitablecareertransitionsbemanagedmoreaggressively HowcanIuseHRtools compensation benefits selection careerdevelopmentprograms etc tobuildandmotivatetheworkforceIneed And whencombinedwithfinancialperformancedata HowcanImanagemyworkforcetomaximizebusinessperformance Byfocusingontheseinternaldynamics wecananswerquestionssuchas CaseStudies Solution Premierglobalbrandisthreatenedbyproductdesignissues flawedlaunches andmanufacturingqualityproblems CEOpegsfinancialimpactat 1 billion Companythinksleadershipdevelopmentprogramisatheartofproblem Fast trackmanagersmovefromfunctiontofunctionwithoutmasteringtheirjobs creatingtoomanygeneralistsCompanycan tseehowtokeepcross functionalexperienceswithouthavingthesystem gamed ClientsPerceptions Actions BusinessChallenge Analysisshowshowelementsofthetalentsystem selection performancemanagement payandcareerincentives conspire tocreatetoofrequentlateralmovements BusinessResults Globalinitiativesarelaunchedtocalibrateeffectsofinteractivehumancapitalpractices Payandincentives talentdevelopment careerdevelopment hiring assuringtherightmixofgeneralistsandspecialists Identifyingbusinessrisksusinghumancapitalstrategy CaseExamplesforNewEra View Becauseofmountingqualityproblems thiscompanyfeltapressingneedtostrengthenitstechnicalcareerpath Disguisedcaseexample Analysisshowedthatcareerrewardsdiscouragedtechnicalspecialization TalentAcquisition Reduceinsularityofyourinternallabormarket Increaseemphasisonoutsideexperience orlessendependenceoninternal feeds tojobopenings BemoreopentohiringfromtheoutsideatmiddleandseniorlevelsAddressmythsconcerningsuperiorproductivityofhome growntalentAccepthigherratesofturnoveramongentrenched lifers inselectedbusinessunitsandjobcategoriesFocushiringonthosewithdepthoftechnicalskillsGivemanagersmoreautonomyandownershipforhiring TalentDevelopment Defineandvaluemultiplecareerdevelopmentpaths Definecareerpaths natureofmovementanddevelopmentalactionsforCorporateLeader FunctionalLeaderandTechnicalSpecialistEnhancetraininginvestmentsfocusedonbuildingtechnicaldepth culminatingin Master statusEstablishnewprocessfortalentidentificationandintegratetalentdevelopmentplanningwithbusinessandcompensationplanningConsiderintroducingaccounting charges tobusinessunitsthatprecipitateprematurelateralmovement PerformanceManagement Alignandintegrateperformancemanagementwithothertalentmanagementprocesses Clarifyroleandmethodsofdeterminingperformance performancetrend growthandmasterypotentialAtbeginningofjobassignments establishagreementsbetweenemployeeandmanagerondevelopmentgoals expectedemployeecontributionsandknowledgetransferexpectationsEnhanceprocessestoalignbusiness teamandindividualobjectivesImproveaccuracyofforcedranking Rewards Shiftfroma tournament toapay for performancerewardstructure LessenimpactofhierarchicallevelontotalrewardopportunityAddressextremecareerchokepointatlowestlevelofleadershiphierarchyExpanduseofvariablepay increasingrewardopportunityformeetingqualitygoalsandsuccessfullycompletingprojectsExpandaccesstoequityforthoseintechnicaltrackAddressexistingincentivesforlateralmovement Humancapitalprioritieswerethenbesetbasedonimpact Solution Globalbrandfacesdecliningmarketfortraditionalbusinesslines butisunabletobuildnewproductsdemandedbyconsumersduetoworkforcecapabilitylimitations Company smarketvaluedropsbyover90 CompanyhasusedRIFs reductions in force to retool workforce Companycan tseehowto buy theneededskillswithoutanotherRIF Withprecipitousdeclinesinstockprice thereareminimalfundsavailabletopayforanotherworkforcetransition ClientsPerceptions Actions BusinessChallenge Analysisrevealshowexcesscashisspentoncompensationprograms significantlysubsidizingsub parperformanceofindividualcontributors Annualprice tagofincentivesubsidiesexceed 50million BusinessResults InsteadofhavinganotherRIF companyappliesindividualperformancegatestoreducewasteinspending openingupfundstohirepeoplewithcriticalcompetencies andencouragingturnoverofsub parworkers QuantifyingtheROIofyourpaypracticescanbeveryrevealing Butthevariablepaysystemimpedestimelyadjustmentofworkforcetonewbusinessrequirements Achangingtechnologicalplatformandbusinessdesignrequiredifferentworkforcecapabilities Balancingemploymentcostswithproductivitygains Solution LargeUSdistributorconcernedwithhighworkerscompensationclaimscosts Companyservicewasbelievedtoenhancecustomerrelationshipsbutthephysicaldemandsofthejobincreasedriskofinjuryovertime Thecompanydidn thaveaclearsenseifinitiativesunderconsiderationwouldultimatelyimproveclaimsexperienceandretainthevalueassociatedwithcustomerrelationships ClientsPerceptions Actions BusinessChallenge Findsthatproductivityoutpacesemploymentcostsuntilproductivitypeaks ataround10yearsofservice Changesaredesignedtoencouragepeopletostayforthe optimal lengthoftime creatingover 20millioninvalueperyear BusinessResults Companyinitiatedprogramsto reducequickturnoverofnewhiresthroughstep ratepayincreasesduringthefirstyearofemployment andencourageretirementand orjobchangesforlonger serviceworkerstoimproveorganizationalproductivityandlowerworkerscompensationclaims Thiscompanywasexperiencingrisingemploymentcostsamongcertainkeyjobgroups withuncertaingains Employeecosts Productivity Yearsofservice Productivityandemployeecosts perhour Employmentcostsexceedproductivitygains Here significantimprovementopportunitieswerefoundatbothendsofthetenurespectrum Statisticallymodelingbusinessimpactrevealedthebusinessoutcomesofspecificworkforcepractices Disguisedexample Decreases productivity Increases productivity Driversofbusinessresultscanbeexaminedattheunitlevelorattheemployeelevel ifsuchmeasuresofproductivityareavailable Solution Businessdesignheavilyreliedonsellingadditionalbusinesstoexistingcustomers Thiscompanyhaddevotedsignificantresourcestounderstandingcustomerneedsandexpectations Littleresearchhadbeendoneontheemployeesideoftheequation effectively thisorganizationdidn tknowwhatmotivateditsemployees ClientsPerceptions Actions BusinessChalle