Investing in the Human Capital The Rhetoric, the Reality and the Solutions

1-Human Capital- The Rhetoric

• Human Capital is the greatest asset

• “The Real wealth of Nations” UN Report.

• The need to focus the Human Capital and business case for investing in HC.

2-Human Capital- The Reality

• Human Capital is absent in the balance sheet (Intangibility)

• The financial impact of the HR strategy is often not measured

• The ROI in HC needs to be established

2- Valuing HC as an asset in Balance Sheet

• Are people an asset or a liability?

• Measuring People’s value through the total employment costs.

• Focusing on the earnings

• Human capital investment realization (objectives and growth).

3- Infosys HC valuation

• Infosys Human Capital Valuation

• Levi-Schwartz Human Resources Accounting Model.

• EV based on present value of the future earnings

• Investment in the L & D

4-Investing the HC and HR Strategy

Pay

• Base Pay

• Sales Incentives

• Collection Incentives

• Star Performers Awards

• Award for Long Service and Persistent Performance

• Award for Exceptional Performance in Project Management

• Award for Extraordinary Achievements and Innovation

• Sincere Cooperation, Devotion and Dedication Award

• Attendance Incentives

Benefits

• Medical Insurance

• Paid time off

• Corporate Wellness Programmes

• social gatherings and celebrations

Work Environment

• Flexible Hour arrangement

• Tools and recourses:

• HRIS

• Training Management System

• Physical Environment

• Employee engagement strategies

Learning & Development

• Training Courses and seminars

• Performance Management

• Career progression

• Transfers

• Coaching

• Investing in our employees is beyond investing L& D

• Investing in the HC should be a part of total reward system managed through HR policy

• How to measure the return of investment in HR strategy?

• Research from the CRF institute in the HR management of 500 companies shows that HR policy has profound impact on the absenteeism rate.

• Absenteeism cost and impact

• Absenteeism rate is a strong indicator of the physical and mental well being of employees.

4-Investing the HC and HR Strategy (Cont)

4- Investing the HC and HR Strategy (Cont)

• Development of the staff

• Flexible Working

• Employee counseling on work-life Balance

• Company Name: Sixpence Consulting S.P.C.

• Established: Established in the Kingdom of Bahrain in

2005.

• Locations: Operating in the GCC with offices in Bahrain,

UAE & Oman.

• Total headcount: Around 600 across the GCC.

Case study : Investing in HC through L & D

-The Principle Business lines - HR role

Case study : Investing in the HC through L & D

Our business partners

Case study : Investing in the HC through L & D

Case study : Investing in the HC through L & D

Main deliverables:

1. Achieving the Sales targets. 2. Work with clients to make sure the

Sales team are delivering the results. Intervene when necessary.

3. Managing the HR related activities

Case study : Investing in the HC through L & D

Sales management projects realities:

• Sales positions

• Demanding and competitive

• Positions that attract young

candidates.

• Do possess the employability skills

however they are often not

experienced.

Case study : Investing in the HC through L & D

198

318

103

39 11 18 6 6

0

50

100

150

200

250

300

350

Year 2012 Year 2013 Year 2014 Year 2015

Total No. of BahrainisEmployed

Total No. of BahrainisEmployed through GEP

• In the years between 2012-2015. We employed

658 Bahrainis

• 62 Through the GEP

Case study : Investing in the HC through L & D

1%

52%

41%

6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Under 20Years

20 - 30 Years 30 -40 Years 40 -50 Years

Employee Age distribution

Under 20 Years

20 - 30 Years

30 -40 Years

40 -50 Years

Year 2013

• Investment in Facilities

• Selections from Projects/Departments based on nominations

• Soft Skills Courses

Year 2014

• Investment in Facilities

• TNA

• Yearly detailed Training Plan

• + Customized training courses

• + Budget Distribution and Proper Allocation of the Cost Drive ( No. of Employees Per Project/Department )

• + Development of training system 6T

Year 2015

• Investment in Facilities

• TNA

• Yearly Training Plan

• Customized training Courses

• Budget Distribution and Proper Allocation of the Cost Drive ( No. of Employees Per Project/Department )

• +Implementation of Training System “6T”

• +Focus on technical training and in line with NVQ

• + Active monitoring of the training delivery activities.

• Reporting training outcomes

Case study : Investing in the HC through L & D

Training Hours delivered 2013-2014

Case study : Investing in the HC through L & D

Case study : Realizing the ROI in L & D

Results:

• Demonstrated track in achieving the deliverables of the Sales Management projects.

• Maximized growth through the investment in L & D

• Competent staff who posses effective skills to achieve the business objectives

• The ongoing training programmes ensured that there is a pool of reserved talent who are ready to move to the next level.

Case study : Realizing the ROI in L & D- cont

• Exceeding expectations: No1 sales team in the EMEA region in Q1 2015

Case study : Realizing the ROI in L & D- Cont

Emergent results

• The Direct Employment of 177 young Bahraini staff in Batelco.

• The Direct Employment of 42 staff in Standard Chartered Bank.

• Direct Employment of 17 staff in Tamkeen.

What is next?

• HRA: Adopting joint Human Resources and Accounting mechanisms to maximize the real Human Capital value

• COPs: Exchange the practices on investing HC and the ROI in Human capital

• The Extra Mile: finance and financial consequences and to work with finance teams to recognize the cost and the value of investing in the Human Capital.

• National Framework for Human Capital Valuation