linking leadership to workforce productivity webinar
TRANSCRIPT
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7/30/2019 Linking Leadership to Workforce Productivity Webinar
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December13,2012
HumanCapitalManagementInstitute
Presents:
LinkingLeadershiptoWorkforceProductivity
HUMAN CAPITALMANAGEMENT INSTITUTE
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7/30/2019 Linking Leadership to Workforce Productivity Webinar
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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
HumanCapitalManagementInstitute
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ValueCreationinTodaysMarketplace
PostIndustrialMarketplaceMarketvalueIsdrivenprimarilybyfactorsthatdonotshowuponthebalancesheet.ThelargestbeingIntellectualorHumanCapital*.
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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
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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
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WorkforceProductivity
HumanCapitalManagementInstitute 7
Workforceproductivityistheamountofgoods,services,productionorwork
unitsproduced
in
agiven
amount
of
time
with
agiven
amount
of
inputs.
Thiscanbeexpressedasanorganizationtotal,orasanaverageperemployeeorFTE.
Definition:
ExampleProductivityMetrics:
UnitsProduced HoursWorked TimetoProductivity OpenPositionLostRevenueorProductivity EmployeeEngagementRevenueLinkage
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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
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QuantifyingManagerEffectiveness
Canyouquantifywhichmanagersaremoreeffectiveatmanagingtalent?
ManagerA Manager
B
Hiresexperiencedemployees
Exceededbusiness
performancegoals
Highemployeeturnover
Lowemployee
mobility
Hiresjunioremployees
Exceededbusinessperformancegoals
Trainsandgrowsteammembers
Employeesstayandmoveupintheorganization
Highemployeeperformance
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LeadershipandtheTalentManagementLifeCycleQuantifyingWorkforceandHRImpact
Butwhatarekeymeasuresateachstageinthetalent
managementlifecycle?
Howshouldthesemetricsbereportedandanalyzed?
Leadershiphastheabilitytoaddvalueandimpactproductivity
acrossallelementsofthetalent
managementlifecycle.
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Recruiting&Hiring
Training
(L&D)
Performance&Engagement
MobilityCareerPath
Turnover&Retention
Leadership&
Management
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HumanCapitalFinancialStatements(HCF$)
GreaterTransparency intoanorganizationsgreatestasset:theworkforce
AMethodtoValueKnowledgeCapital: measureknowledgecapital,the80%ofmarketcapitalizationnotcapturedbytraditionalfinancialstatements
ImprovedInvestmentDecisions: betterinformation=moreinformedinvestmentdecisions
StandardsinHumanCapitalMeasurementandReporting:enableadvancedbenchmarkingcapabilities forindustry,geographic,specificjobrolesandmore
DefinitiveMethodologyforQuantifyingWorkforceProductivity:quantifiesproductivityandtalentmanagementimpactacrossthetalentmanagementlifecycle
TrueLinkageofHumanCapitaltoFinancialResults
DeliverHRValuewithHumanCapitalFinancialStatements:
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HighLevelOrganizationProductivity
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Traditional
Productivity
Metrics
LeadingProductivity
Metrics
SummaryHumanCapitalImpactStatement
HumanCapitalROIRatio PriorYearCurrentYear%Chg
RelativeValueAdd(Productivity)by
JobGroup
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ProductivityAcrosstheTalentManagementLifecycle
HumanCapitalManagementInstitute 13
TalentManagement
Impact
Leadershipimpactsmetricsandcreatesordestroysvalueacrossmultipleareasofthetalentmanagementlifecycle.
CriticalMetric:TalentManagementIndex
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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.
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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.
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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.
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16HumanCapitalManagementInstitute
CaseStudies
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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).
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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
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$58$110
$148
$203$222
$250
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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
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SOLVE:DeliverAnalyticsValuein3EasySteps
21HumanCapitalManagementInstituteSourceSystems
1. SourceandLoadData
2. AnalyzeTrendsandModelScenarios
3. QuantifyWorkforceROIandDeliverInsights
DataIntegrationBlueprint
Dashboards
Human CapitalFinancial Statements
Metrics
WorkforceROI
Standards
WorkforcePlanningSOLVEWORKFORCEINTELLIGENCESOFTWARE
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22HumanCapitalManagementInstitute
QuestionandAnswer
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ContactInformation:
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HumanCapitalManagementInstitute
Presenterinformation:JosephMorrissey,VPSales
GrantCooperstein,[email protected]
Formoreinformationaboutthefollowingproductsandservices,pleasevisitthelinksbelow:SOLVE WorkforceROICalculator HumanCapitalFinancialStatements
Training HumanCapitalMetricsHandbook ThoughLeadership
WorkforceIntelligenceConsortiumGroup
@HCMI
HumanCapitalManagementInstitute