how can hr shape the business?
DESCRIPTION
The entry into analytics has to be well prepared. The guidelines for analytics initiatives presented a month ago already turned out the benefits of evidence-based management and outlined a process model, which is based on the guidelines set out in this post. These guiding principles provide practical knowledge for analytics initiatives.TRANSCRIPT
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STRIM at a glance
Analyses & Workshops Strategy & Execution Webinars & Conferences
Administration & Reporting Assessments & Coachings Surveys & Publications
Strategy Execution Human Capital Management Talent Management
…...
Range of
Services
Focus
Topics
For more information please have a look at www.strimgroup.com
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CEO Challenges 2014The Top 5
An appetite for change: Leveraging people to build a customer-centric, performance-based culture.
Human Capital was named the top challenge of global CEOs (first in Europe and Asia, second in
North America and Latin America). It is also intimately linked with all the other top challenges for 2014.
1 Human Capital
2 Customer Relationships
3 Innovation
4 Operational Excellence
5 Corporate Brand and Reputation
Source: http://www.conference-board.org/publications/publicationdetail.cfm?publicationid=2681
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CEO Challenges 2014Derived Strategies on Human Capital
Provide employee training and development1
Raise employee engagement2
Improve performance management processes
and accountability3
Require the use of analytics to articulate the
business impact of key human capital …
The strategy to require the use of analytics to articulate the business impact of key human capital
initiatives and programs is one of the lowest ranked strategies to meet the human capital challenge.
1 Human Capital
19
:
Increase efforts to retain critical talent4
Source: http://www.conference-board.org/publications/publicationdetail.cfm?publicationid=2681
5
View on HRC-Level and BU leaders view HR as lagging in strategic performance
Source: McKinsey & The Conference Board Research, 2012
Legend: Rating on scale of 1-6, 1 = “needs improvement”, 6 = “best practice”
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Shaping the business means …Note Guiding Principles
Standards of practise lead to a reliable and credible approach to human capital analytics. There are
four key themes:
Source: Human Capital Analytics, A Primer, The Conference Board
1Human capital analytics must drive strategic
outcomes
2Human capital analytics must represent multiple
perspectives
3Human capital analytics must balance analysis
with information needs
4Human capital analytics must be sustainable
and transferable
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Shaping the business means …Rely on Evidence-Based Management
Identification of general
causal relations (theories)
Identification of specific
practices (instruments)
Science Practice
Based on: Brodbeck, F.; Woschée, R.: Grundlagen und Möglichkeiten eines evidenzbasierten Personalmanagements, 2013
exte
rna
l e
vid
en
ce
, so
un
d s
cie
ntific
kn
ow
led
ge
, g
en
era
lizab
le
ca
use
-effe
ct re
latio
nsh
ips
inte
rna
l evid
en
ce
, org
an
iza
tion-
sp
ecific
facts
ba
se
d o
n
syste
ma
tica
lly c
olle
cte
d d
ata
the interaction creates a collective intelligence
Meta-
analyses
Controlled
laboratory/field
experiments
Comprehensive
correlation studies
Systematic
reviews
Systematic
evaluation
Systematic
Follow-up
Expert
survey
Case
study
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Shaping the business means …Unterstanding the Decision Framework: Overview
Source: Beyond HR. John W. Boudreau, 2010
Do we achieve our effects
where they matter most to our
sustainable strategic success?
How much resource is
invested in the portfolio of
our policies and practices?
How much effect do our
policies and practices have
on their target population?
Impact
EfficiencyEffectiveness
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Shaping the business means …Following the LAMP Framework: Overview
HR Metrics and
Analytics That Are
A Force For
Strategic Change
„The Right Logic“
Rational Talent Strategy
(Competitive Advantage, Talent
Pivot Points)
L„The Right Measures“
Sufficient Data
(Timely, Reliable, Available)
M
„The Right Analytics“
Valid Questions and Results
(Information, Design, Statistics)
A
„The Right Process“
Effective Knowledge Management
(Values, Culture, Influence)
P
Source: Investing in People. Financial Impact of Human Resource Initiatives. Wayne Cascio and John Boudreau
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Shaping the business means …Following the LAMP Framework: Logic – Employee Turnover
Voluntary versus Involuntary Turnover
Functional Versus Dysfunctional Turnover
Employee Turnover (pivotal talent pools): Each separation is replaced by an acquisition.
Source: Investing in People. Financial Impact of Human Resource Initiatives. Wayne Cascio and John Boudreau
Starting Workforce Value
Quantity of employees
X
Quality of employees
Effect of Separations
Quantity of employees removed
X
Quality of employees removed
Ending Workforce Value
Quantity of employees
X
Quality of employees
Effect of Acquisitions
Quantity of employees added
X
Quality of employees added
Change in Workforce Value
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Shaping the business means …Following the LAMP Framework: Logic – Map of causalities
Managerial
Leadership
TrainingHuman
Capital
Relational
Capital
Structural
Capital
Human
Capital
Effectiven.
Retention
of Key
People
Business
Perfor-
mance
Knowledge
Generation
Employee
Engage-
ment
Employee
Satisfaction
Employee
Motivation
Value
Alignment
Strategy
Execution*
Knowledge
Integration
Knowledge
Sharing
Human
Capital
Depletion
Remark: Referring to Nick Bontis and Jac Fitz-Enz: Intellectual Capital ROI, 2010
* for further remarks: Mark A. Huselid, Brian E. Becker, Richard W. Beatty: The Workforce Scorecard, 2005
Motivation Risk
Failure and Availability Risk
Occupational
Skill Risk
Integrity
Risk
Alignment
Risk
Resignation
Risk
0,506
0,442
0,530 0,326 0,360
R2=68,2%
R2=28,5%
R2=44,1%
R2=28,5%
0,751
0,3580,307
0,475
0,327
-0,337
0,439
0,456 0,4290,394
0,430
0,285 -0,233
0,262
-0,372
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Shaping the business means …Following the LAMP Framework: Measures – Employee Turnover: Measuring separation costs
Total separation costs (ST) = S1 + S2 + S3 + S4
Source: Managing Human Resources: Productivity, Quality of Work Life, Profits. Wayne F. Cascio;
Investing in People. Financial Impact of Human Resource Initiatives. Wayne Cascio and John Boudreau
relevant in the
United States
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Shaping the business means …Following the LAMP Framework: Measures – Employee Turnover: Measuring replacement costs
Source: Managing Human Resources: Productivity, Quality of Work Life, Profits. Wayne F. Cascio;
Investing in People. Financial Impact of Human Resource Initiatives. Wayne Cascio and John Boudreau
Total replacement costs (RT) = R1 + R2 + R3 + R4 + R5 + R6 + R7 + R8
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Shaping the business means …Following the LAMP Framework: Measures – Employee Turnover: Measuring training costs
Source: Managing Human Resources: Productivity, Quality of Work Life, Profits. Wayne F. Cascio;
Investing in People. Financial Impact of Human Resource Initiatives. Wayne Cascio and John Boudreau
Total training costs (TT) = T1 + T2 + T3
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Shaping the business means …Following the LAMP Framework: Analytics – Retention Rate / (www.tronox.com)
Retention Rate = (Start of Quarter HC + External Hires – Terminations) / (Start of Quarter HC +
External Hires) * 100. Percentage of all HC in the quarter that did not terminate.
Global HR
Dashboard
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Shaping the business means …Following the LAMP Framework: Analytics – Employee Turnover
Total cost of turnover (CT) = ST + RT + TT + DP
The purpose of measuring turnover costs and using analytical strategies to reveal their implications is
to improve managerial decision-making.
Compen-
sationEmployee
Signs
Benefits
Co-
Determination
Training &
Development
implications
Employee Turnover
Firm-spec.
Human Capital
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Shaping the business means …Following the LAMP Framework: Process – Employee Turnover / (http://superiorenergy.com/)
Managerial
Leadership
TrainingHuman
Capital
Relational
Capital
Structural
Capital
Human
Capital
Effectiven.
Retention
of Key
People
Business
Perfor-
mance
Knowledge
Generation
Employee
Engage-
ment
Employee
Satisfaction
Employee
Motivation
Value
Alignment
Strategy
Execution*
Knowledge
Integration
Knowledge
Sharing
Human
Capital
Depletion
Remark: Referring to Nick Bontis and Jac Fitz-Enz: Intellectual Capital ROI, 2010
Source: Investing in People. Financial Impact of Human Resource Initiatives. Wayne Cascio and John Boudreau
= Workforce Value
Pay for
Perfor-
mance
(+)
(-)
One-on-
one-
coaching
voluntary vs. involuntary turnover
functional vs. dysfunctional
turnover
(+)
(-)
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Key Lessons To Take Away
Create buy-in and ownership whilst taking guiding principles into account
Be committed to fact based / evidence-based decision making
Ensure close alignment between strategic and operational level / use of data
Start with logic, followed by measures, analytics and process (LAMP framework)
Create focus on data quality throughout the business
Create tighter integration between business KPIs (leading indicators) and analytics
Focus reporting and analytics on the future (predictive HR, maturity process of analytics)
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Learn more about it
Talent Relationship Management: May 22
Human Capital Analytics: September 19
Talent Relationship Management : June 6
Human Capital Analytics : October 17
Talent Relationship Management : June 26-27
Human Capital Analytics : October 30
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Your Personal Point of Contact
Chairman and CEO at
STRIMgroup AG, Zurich / CH
Senior Fellow at The
Conference Board in New York
Lecturer in the Master's
program in Human Capital
Management at Lake
Constance Business School /
Germany
845 Third Avenue
New York, NY 10022-6600
Telefon: +49 (0)172 7590 688
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CH-8122 Binz (Zürich)
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