HCM Training Presentation. for data pptx

HCM Training Presentation. for human data

1. Certified HCM Analytics Professional

2. Intellectual Capital

3. 1. Human Capital

4. 2. Networking Capital

5. Structure Capital

6. What Is Analytics? Arts and Science Logical progression first and a set of statistical tools second

7. Towards Analytics and Prediction Evolution of human capital metrics. Transactional Monitoring HR Management Business Metrics Predictive Analytics There are five ways to measure anything in business. cost, time, quantity, quality, and human reaction 13

8. First Step Recording our work (i.e., hiring, paying, training, supporting, and retaining) . Relating to our organization’s goals (i.e., quality, innovation, productivity, service [QIPS]) . Comparing our results to others (i.e., benchmarking) . Understanding past behavior and outcomes (i.e., descriptive analytics) . Predicting future likelihoods (i.e., prescriptive analytics) . 14

9. Descriptive Analytics Mission-critical—the small group that has the largest effect on performance and revenues Differentiators—the group with unique skill sets that help to generate competitive advantage Important—the operatives who keep the organization functioning day to day Movable—those with capabilities that can be outsourced, retrained, transferred, or terminated 15

10. Prescriptive Analytics This form of analysis relates what we know currently to what we want to know about the future. Whereas descriptive analytics reveals current data patterns, predictive analytics gives meaning to those patterns for the future. With practice, one can look at historical data and foretell, to some degree, the likelihood of a future occurrence. 16

11. IAM—Individual Asset Multiplier Every person is an individual, not just another “head.” They bring a different level of present and potential value to their current role and to the organization. The Individual Asset Multiplier is designed to reflect this. Some people we are happy to lose. There is a replacement cost, but no real asset loss. What factors make the difference? There are four that predominate and determine the worth of an individual to us, as follows: Individual Asset Multiplier Weighted Average assessment of: Capability—the cumulative skills, knowledge, experience, and useful network Potential—to grow and contribute at a higher level Contribution—to stakeholder value Alignment—to organizational values 17

12. Capability Personal capability profile: breadth and depth of experience, personal skills, technical and professional know-how, personal network 0.5 Has some noticeable deficiencies compared to expectations for this role 1.0 Generally has the balance of capability expected for this role 1.5 In several areas exceeds the level needed for the role; has unique knowledge and experience, and capability that can be applied in various other roles 2.0 Has considerable breadth and depth beyond the basic needs of the role; known for unique expertise or has a range of capabilities that can be applied very flexibly 18

13. Potential to grow 0.5 Probably over promoted at current level 1.0 Expected at the very least to grow within the role, or to stay up to date with a specialism, or to move laterally to different roles 1.5 Able to grow to at least one higher level of responsibility, or to one or two further levels of specialist depth 2.0 Considered high potential for management positions or technical/professional leadership 19

14. Personal contribution to stakeholder value 0.5 Makes some measurable contribution to nonfinancial measures 1.0 Makes an average level of contribution to either a financial or a nonfinancial measure, or a combination 1.5 Makes an above-average contribution to either a financial or a nonfinancial measure, or a combination, with a significant proportion being aimed at future value creation 2.0 Contributes considerably more to both financial and nonfinancial value measures than the average employee, with the majority aimed at future value creation 20

15. Alignment to values 0.5 Shows little alignment to corporate values 1.0 Behavior does not explicitly conflict with values 1.5 Makes considerable effort to live as many of the values as possible 2.0 Known throughout as a role model for the organization’s values 21

16. Examples of calculating Human Asset Worth Harriet Smith is a purchasing manager. Her total remuneration package is £60,000 per annum, made up of £45,000 plus benefits of £15,000; social security costs average 9 percent of the combination of salary and benefits. We thus calculate EC as (45,000 + 15,000) / 1,000 × 1.09 = 65.4. 22

17. Harriet’s Individual Asset Multiplier is calculated as follows: Component Factor value Weighting Weighted value Capability 1.5 0.30 0.450 Contribution 1.7 0.35 0.595 Potential: 1.0 0.20 0.200 Values alignment 1.5 0.15 0.225 Individual asset multiplier 1.470 Harriet’s HAW is therefore 65.4 × 1.470 = 96.1. 23

18. Human Capital Mtrics

19. Let’s begin with an illustrative example Showing the difference between “ so what” and “ Omg … I must take action” metrics 22

20. 23 Which metric would a CEO want to know about? Hiring costs (CPH) are a one-time .001% cost item CPH $ returns & impacts of a new-hire last for years LeBron vs. Homer Simpson “So what” Omg But the performance of a great or a weak hire… lasts for years ! (VW or Wells Fargo)

21. 24 CEO’s would want to know about… the performance differential between new-hires What is the % of increased output added by top performers ? The top 1% of your workforce produce what % of your total output? The top 5% produce An innovator produces what “multiple” more ? (i.e. H ow many times more than the average new-hire in the same job ? - 10 times the average - 25 times more than average employee - 300 times more than the average GE, Netflix & Yahoo 10 % (or 10 times their expected output) Apple Google 26 % (over 5X their expected output) ( U of Indiana study by O’Boyle and Aguinis) Conclusion : there may be an 80/20 rule when it comes to employee performance… so you should prioritize your employees

22. Also focus your hiring on high priority jobs … to maximize your visible business impacts Hire the top sales managers Hire top people in revenue generating positions Hire top people that are innovators Hire the best in product development positions Hire great executives & managers Hire the top recruiters of salespeople Also Hire into already measured jobs ($ or quantified) Hire the best away from your competitors Hire those that also have leadership capabilities Hire top people that stay longer Hire those with a high career trajectory Omg – stop this equal treatment or hiring based on req. date…and focus on the jobs that really matter!

23. 26 CEO’s would want to know… the tremendous cost of weak hires and employees A weak employee causes errors and disruptions each year up to ___ times their annual salary (Source: O’Boyle and Aguinis, U of Indiana) Weak employees take up a manager’s time, so a manager must… spend what % of their time dealing with them Toxic employees make their teammates what % more likely to quit (Source: Cornerstone Selection survey) Replacing a weak manager equals the impact of adding 1… to an 8 person team Source: National Bureau of Economic Research Bad ones stay forever … weak hires may stay 20 years , multiplying their negative impacts 2 ¼ 1 day a week (17%) (Source: Robert Half) 54 Omg – let’s clean house… and… send them to Lucent!

24. The Omg approach also changes how you report metrics… For example… just changing the way turnover is reported… changes it from a “so what” metric… into a Omg! metric 27

25. Here is a standard turnover report Last year we had a 18% turnover rate Among that 18%... 98 salespeople left But we aren’t concerned… because it seems like every firm in our industry is having sales turnover problems That’s interesting… but “so what?” 28 CEO’s care about metrics that… show them that they must act immediately

26. This 10 point quantified reporting approach is guaranteed… to get a CEO’s attention With the CFO, we calculated actual turnover costs as: Of the 98 that quit… 26% were top-ranked performers At 3X salary for average and 4X for top performers, the initial loss was $30.3 mil. In vacant sales territories , we lost 4… $10 mil customers Also the turnover resulted in 303 sales vacancy days @ $4000 per day (a loss of $1.2 mil .) And new-hires performed 8% below those they replaced ($80k (8% of $1 mil.) X 98 = $79 mil. a yr. ) And 50% or $13 mil . of that turn was preventable And 26% of the turn went to competitors ( cost 2X ) Total cost $166 mil or 6.2 % of corporate rev. The projected turn for next year is up 10% BTW the stay interview tool cut’s turnover in ½ 29

27. As a foundation… let’s understand HR’s potential Jack Welch, former CEO of GE and Fortune’s “Manager of the Century” has made HR’s potential crystal clear … “When it is used appropriately”, HR… “is the most important department of a company” Source : https://blog.kissmetrics.com/winning-and-profitability/ 30

28. But are we using HR appropriately? 31

29. 32 Almost everyone agrees that HR must… become more strategic When CEO’s and board-level executives rank strategic business functions … Which one is listed as the most strategic ? Sales Where was HR ranked on the list? “ The least strategic function ” Source: DDI survey 32

30. 33 Almost everyone agrees that HR must… increase its business impacts Of the 18 business factors that contributed the most to business outcomes … #1 - With the highest impact was… Reducing operational cost structures And talent was ranked… “Talent was dead last” (#18 out of 18) (Source: KPMG / HfS research)

31. 34 What percent of CEO’s have faith in HR metrics? Unfortunately, “ Only 12% of CEO’s are confident with the quality of Human Capital metrics” AICPA survey BTW… C- Level execs. rated “new hire quality” as the most important performance metric (Source: Survey by staffing.org)

32. 35 Where does HR rank among functional metric users ? R&D 13.2% 11.4% Executive team 12.4% 8.8% Finance 12.2% 5.7% Operations 10% 8.3% Marketing 9.1% 9.4% Sales 5.3% 11.4% HR 4.4% 16.7% Learning : compared to the executive team, HR has only 1/3 of the experts and double the number of poor users Source: AMA/i4cp 2013 Conquering Big Data Rank in analytical ability Experts Poor