Measuring Talent Management Effectiveness With Integrated Analytics
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Transcript of Measuring Talent Management Effectiveness With Integrated Analytics
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Measuring Talent Management Effectiveness With
Integrated Analytics
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Speaker: Kim Lennon
Senior Product Manager
SumTotal Systems
Moderator: Kellye Whitney
Managing Editor
Talent Management magazine
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Measuring Talent Management Effectiveness With
Integrated Analytics
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Kellye Whitney
Managing Editor
Talent Management magazine
Measuring Talent Management Effectiveness With
Integrated Analytics
#TMwebinar
Measuring Talent Management Effectiveness With
Integrated Analytics
Kim Lennon
Senior Product Manager
SumTotal Systems
Presented by:
■ Kim Lennon – Sr. Product Manager
Measuring Talent Management Effectiveness With Integrated Analytics
Page 8 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Agenda
■ Challenges Facing HR
■ All About the Numbers
■ Improvements to Top and Bottom Line
■ Tools – What’s Available Today
■ SumTotal
■ Discussion
Page 9 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Level 2: Fundamental HR Services HR strategy partially or fully defined. Siloed HR functions.
Some standardized processes and policies; core services managed well.
Some automated talent systems, but little integration of data.
Level 3: Strategic HR Department HR aligned with business strategy.
HR functions supporting business needs.
Initiatives split between HR process improvements and talent needs.
Level 4: Business-Integrated HR HR strategy part of the business strategy.
HR helps to drive business decisions through people, data and insights.
Business and HR systems integrated and advanced.
Human Resources Maturity Model
Level 1: Compliance-Driven HR Services No HR strategy.
Personnel function, mostly separate from business and talent needs.
Line managers perform HR activities as they see best.
Bersin & Associates, 2010
Page 10 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
HR Maturity Has Direct Impact on Business
0%
10%
20%
30%
40%
HR is a full partner in developing and
implementing the business strategy
Low Market Performers
High Market Performers
HR’s Relationship to
Business Strategy
Bersin & Associates Institute for Corporate Productivity
Page 11 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Bersin 2011 HR Factbook
shows organizations that
have reached maturity
(Level 4) by having
business-integrated HR
functions rather than
compliance drive (Level 1)
HR show significantly higher
performance in the following
metrics
Why Talent Analytics? Analyst research shows direct correlation to business performance
Page 12 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Poll Question # 1: What is your level of maturity?
1. Compliance-Driven HR Services – little to no strategy identified, departments
are still in charge of HR activities
2. Fundamental HR Services – definition of strategy began, still siloed HR
functions, some automated talent systems, but little data integration
3. Strategic HR Department – HR aligned with business strategy with HR support
business needs with initiatives split between employees and process
improvements
4. Business – Integrated HR – HR strategy is part of business strategy and HR
influencing business decisions through integrated and advanced systems
Page 13 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Talent
Management
Learning
Management
Workforce
Management
Payroll
Management
HR
Transformation
Integrated processes are mission
critical for certain industries
Need Integrated Talent management
across Organizational Models
Need Integrated Visibility and
Analytics Across HCM processes
Need Integrated Strategic
HCM Business Processes
Employees Contingen
t
Extended
Enterprise
Visibility of critical talent issues, gaps
and development plans
Align workforce strategy with
business objectives
Learning development suggestions and
assignments based on competency gaps
Demand driven talent succession, hiring, and
development plans based on gaps
Why Integrate Talent Management? Integrated business processes enable HR transformation
Page 14 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
CEO
• Alignment and agility to respond to strategic business objectives
• Do we have the right talent and systems to support the growth?
VP of Sales • How can I get my team to meet it’s numbers?
• What are my people risks and mitigation plans?
CLO • Lack of visibility into how learning is impacting talent and
business
• Meet the needs of new multifaceted global organization
VP of Consulting
• Need control to align my teams schedules to spend and demand?
• How do I get schedule based on competencies and certifications ?
Head of HR • Need global view of talent and develop and recruit for talent
gaps?
• Self-service system for business to empower the organization
Why Integrate Talent Management? Typical pain points without integrated Talent Management
Page 15 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Business Drivers, How Will They Measure Success?
■ Improve / automate manual processes
■ Gaps within business visibility (compensation budget)
■ Improve data accuracy and consistency
■ Compliance for training
■ Provide visibility to feeder populations for executives through
senior management around the org
■ Provide good reporting (standard and ad hoc) for management to
“see” into these feeder groups
■ Provide flexible reporting structures since they have a globally
diverse, “non-flat” organization
Page 16 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Business Problem ■ Difficult to timely enforce
adherence of compliance
across divisions
■ Lack of global view of talent
■ Lack of business alignment
■ Low predictability in
performance
■ Inconsistency in business
decisions
■ Inability to quickly pinpoint
leading and lagging parts of the
business
■ Time wasted gathering
information – cycle time to pull
data together
■ Low data quality of data and
gathered results
Problem
Cannot Get Integrated Data for HCM
HRMS
Recruiting
Perf. Comp.
LMS
Succession
Manual &
Inconsistent
MODELING ANALYZE
PERFORMANCE
GOAL
SETTING
OPERATIONAL
PLANNING
MONITOR
RESULTS
Page 17 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Agenda
■ Challenges Facing HR
■ All About the Numbers
■ Improvements to Top and Bottom Line
■ Tools – What’s Available Today
■ SumTotal
■ Discussion
Page 18 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
How to Transform Your HR?
Source – Adapted from Bersin & Associates 2010
Page 19 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Why Measure Performance?
Learn & Improve
Report Externally & Demonstrate Compliance
Control & Monitor People
Page 20 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
KPI Checklist
1. Which strategic objective is this indicator relating to?
2. What question do you want to have an answer to? What are
your information needs?
3. Who is asking this question? Who is the information customer?
4. What will they do with the information? Why are they asking?
■ Additional considerations:
■ What is the data collection method?
■ What is the source of the data?
■ What is the formula / scale / assessment method?
■ How often, when and for how long do you collect the data?
■ Who collects the data?
■ What is the target or performance threshold(s)?
■ What are the costs for collecting the data? Justified?
Page 21 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Workforce Measurement Strategy
■ Employee Engagement
■ Recruiting
■ Retention
■ Overall HR Costs
■ Manager Satisfaction
■ Compensation and Benefits
■ Employee Relations
■ Training and Development
Page 22 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Key Performance Indicators
$ Cost of Turnover
$ Cost of Benefits
$ Cost of Employee Training
% Employee Satisfaction
% Employee Motivation
% Employee Demographics
# Lost Time
% Absenteeism
Page 23 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Key Performance Indicators
% Turnover
% Involuntary Turnover
% Voluntary Turnover
# Hiring Cycle
# Average Length of Employment
Page 24 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
HR Questions Answered Through KPIs
• % New hire retention
• % Vacancies filled internally
• # Average open time of positions
Is time-to-fill positions impacting company performance?
• % Average employee tenure
• % Talent retention
• # Bench strength penetration
Do we have sufficient labor to meet next quarter’s demand?
• % High performing employees
• % Turnover
• % Total compensation tied to performance
Does compensation policies for top performers impact retention?
Page 25 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Agenda
■ Challenges Facing HR
■ All About the Numbers
■ Improvements to Top and Bottom Line
■ Tools – What’s Available Today
■ SumTotal
■ Discussion
Page 26 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
■ "A mere 7% of employees today fully understand their company's business
strategies and what's expected of them in order to help achieve company
goals." Robert S. Kaplan and David P. Norton, "The Strategy-Focused Organization," Harvard Business School Press, 2001
■ “The performance differential between top and average performers is as
high as 10:1. Jack Welch, Former CEO, GE and Jerry Yang, Former Chairman of Yahoo
Corporate Executive Board Research shows the ratio to be 12:1 for “superstars”
■ “Organizations with superior human capital practices not only are correlated
with financial returns, but are a leading indicator of increased shareholder
value” Watson Wyatt’s Hyman Capital Index Research Report, 2004
■ “Cost of replacing an employee ranges from 25% - 200% of annual salary” Keeping the People Who Keep You In Business, American Management Association, 2000
How do you quantify ROI? Typical “Soft” Measures, what research shows…
Page 27 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
“Soft” ROI Measures Employer of Choice = Best Employees
■ Compensation isn’t as important as career advancement and
working for an “employer of choice”
Gallup Research, 2011- Employee Engagement Overview Brochure
Page 28 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
“Soft” ROI Measures Engaged Employees = EPS Growth
■ High employee engagement translates to improvements across
the business
Gallup Research, 2011- Employee Engagement Overview Brochure
"Companies that increase
employee engagement see
improvement in operating
margins.“
Towers Perrin, New Realities
in Today's Workforce
Page 29 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
■ Human Capital Return on Investment (HCROI) – relation of human
capital investments to the profitability of the organization (The ROI of
Human Capital, Jac Fitz-enz, 2000)
■ HCROI = (Revenue – Pay and Benefits)/(Pay and Benefits)
How do you quantify ROI? Sample Calculations
Page 30 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Typical factors to consider related to IT Systems expenses:
■ Fewer systems, fewer data centers, less infrastructure
■ Lowered helpdesk support cost from fewer tickets and fewer systems to managed
■ Lower administrator cost of administering multiple systems
■ Cost of data not aligned between systems
How do you quantify ROI?
Assumptions
Annual IT FTE Fully-Loaded Cost 75,000$
System 1 IT Expense Cost Notes Cost Notes
Direct IT Expense 125,000$ 150,000$
System administration cost 75,000$ 1 FTE 75,000$ 1 FTE
Help Desk Cost 37,500$
Typically calculate based on cost per
incident or dedicated support
heads. In this case, using 1/2 FTE 56,250$ 3/4 FTE
System 2 IT Expense
Direct IT Expense 175,000$ -$
System administration cost 37,500$ 1/2 FTE -$
Help Desk Cost 18,750$
Typically calculate based on cost per
incident or dedicated support
heads. In this case, using 1/4 FTE -$
Integration Cost (cost of keeping data integrations in sync between)
Non-TM systems (HRIS, etc.) 11,538$ 2 weeks per quarter 5,769$ 1 week per quarter
Analytics data in sync between applications 5,769$ 1 week per quarter No cost
Total 486,058$ 287,019$
Yearly Savings 199,038$
Notes
You may have more existing systems and more consolidated systems but hopefully you are moving to fewer systems!
Existing Systems Consolidated System
Page 31 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
How do you quantify ROI? Performance Management
Typical factors to consider related to
Performance Management:
■ HR Productivity
■ Employee/Manager Productivity
■ Improved Organizational Effectiveness
HR Productivity Cost Notes Cost Notes
Performance Management Administration 13,846.15$ 2 people 20 hours per month 2,076.92$ 1 person 3 hours per month
Roundtable/Ratings Calibration Support 6,442$
(2) review sessions per year with
100 hours time per session 1,442$ 25 hours per review session
Employee and Manager Productivity
Time spent writing performance reviews 399,038$
2 hours per manager and 1 hour per
employee 299,279$
1.5 hours per manager and .75 hour
per employee
Optimization of compensation budget (335,000)$
.05% improvement in overall $570M
comp budget
Time spent creating/aligning goals 161,058$
30 mins per goal (5 goals per
employee) 96,635$
20 minutes per goal (5 goals per
employee)
Improve organizational effectiveness
Increased revenues based on goal alignment (100,000)$ .01% increase in productivity
Decreased cost based on goal alignment (70,000)$ .01% decrease in cost
Improved productivity based on global performance
management 250,000$
.5% increase in productivity per
employee. 50% contribution margin,
10% attributable to TM integration
Lawsuit avoidance (cost per case) 500,000$ 5 cases per year @100k 400,000$ 5 cases per year @80k
HR Time per case 11,538$ 80 hours per case 4,615$ 32 hours per case
Total 1,091,923$ 549,048$
Yearly Savings 542,875$
Existing Systems Consolidated System
Page 32 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
How do you quantify ROI? Performance Management Systems Integration
Category Existing
System
Consolidated
System
IT Expenses 486,058 287,019
HR Admin Costs 20,288 3,519
Employee/Manager Costs 560,096 60,913
Org Productivity Gains - (420,000)
Wrongful Termination Lawsuit $511,538 $404,615
■ Annual Savings = $1.1M
■ If the new system investment is $500k/yr, that results
in a 5.3 month ROI
Page 33 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
■ Compensation
■ Comp Team Productivity
■ Time developing/deploying comp policies
■ Less time spent planning and approving comp recommendations
■ Reduce compensation budget overspending
■ Reduce time required to develop merit plans
■ Increase results by retaining top talent
■ Attract top talent due to compensation plans
■ Succession Planning
■ Succession Planning Team Productivity
■ Reduce Recruiting Costs
■ Reduce manager time spent on annual assessments
■ Reduce time create management reports
■ Reduce risk of business gaps due to lack of qualified personnel
■ Improve speed/success of entering new markets
■ Proactively develop plans to retain top performers
How do you quantify ROI? Other Modules
Page 34 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Poll Question #2: Which area of ROI is most important to your organization when evaluating Talent Management?
A. Efficiency gains – savings in time to execute HR processes across the company
B. Direct cost avoidance – not having to pay maintenance, hardware or headcount
related to multiple systems
C. Productivity gains – More productive employees /organization due to better
alignment / execution of business objectives
D. Talent Acquisition – Becoming an employer of choice to attract the best
candidates
E. Reduced turnover – better employee morale driving reduced turnover, especially
among high performers in org.
Page 35 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Agenda
■ Challenges Facing HR
■ All About the Numbers
■ Improvements to Top and Bottom Line
■ Tools – What’s Available Today
■ About SumTotal
■ Discussion
Page 36 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Levels of Analysis Required
Visibility
• Pre-built reports
• Self service & Configurable Ad-hoc reporting
• Guided Navigation
• Alerts
Analysis
• Dashboards
• Key performance indicators (prebuilt & adhoc)
• Trend Analysis
Strategy
• Target and benchmarking
• Top & bottom performers
• Proactive strategy and planning
Excellence
• Management and operational excellence
• Actionable intelligence
• Continuous Improvement
Page 37 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Intelligence Through Analytics
Standard Reports
Ad Hoc Reports
Drill Down (Through)
Alerts
Statistical Analysis
Forecasting
Predictive Modeling
Prescriptive Modeling
Degree of Intelligence
Com
petitive A
dvanta
ges
Now and Past
Future
Page 38 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Don’t Do All the Heavy Lifting Yourself
■ Web based / desktop based
■ Mobile (phone / tablet)
■ Export formats
■ Office Integration
■ Dashboard and scorecards
■ Alerts and subscription delivery
■ External data imports
■ Database Versions
■ Rich design environment (WYSIWYG)
■ Drill-down & drill-through
■ Actionable Intelligence
Page 39 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Analytics Tools of the Trade
■ External applications
■ Spreadmarts - heavily siloed Microsoft Excel workbooks
■ Business Intelligence vendors
■ Hardware / Software / Model
■ Company business intelligence platform (ERP Analytics)
■ Data warehouse supporting business areas – such as finance
■ Embedded reporting applications (HCM Analytics)
■ Existing reporting platform in your Talent Management or Learning
Management Platform
Page 40 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Strategic Workforce Analytics
Learning Performance
Compensation
Succession
Career
Development Hiring
Legacy & Custom Data Warehouse
3rd Party systems - SAP, Oracle, PeopleSoft
Flat Files (CSV, XLSX)
External Business Data
Role
Based
Dashboards
Pre Built
Key Performance
Indicators (KPIs)
Interactive &
Ad-hoc
Reporting
Alerts
&
Actions
Talent/
Custom
Portal
Integrated Strategic HCM - Talent Data Warehouse
■ Most comprehensive Strategic HCM-Talent
Data warehouse
■ 200+ HCM interlinked business objects
across learning, performance, succession,
compensation hiring and career development
■ Rationalized data and security across these
dimensions and processes
■ Pre-built & Ad-hoc key performance
indicators for most industry needs
■ Pre-built role based dashboards and 50+
KPIs most critical to companies
■ Flexible and quick ad-hoc KPIs and reports to
enable dynamic analysis
■ Strategic workforce analysis integrated with
external business data
■ Measure the impact of strategic HCM
processes based on impact to any business
drivers and data like financial, sales,
customer satisfaction
■ Easy to add any external data source and
create integrated reports
■ Actionable Intelligence for execution
excellence
■ Drill down into the detail transactional
information from any analysis
■ Drive closed loop execution and continuous
improvement with integration transactional
actions from reports
Page 41 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
You can't manage what you don't measure!
Page 42 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Poll Question # 3: When do you think your organization will deploy actionable analytics?
A. Already using analytics to make a difference
B. Within next six months
C. From six to twelve months
D. Not on the radar – but should be…
Page 43 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Agenda
■ Challenges Facing HR
■ All About the Numbers
■ Improvements to Top and Bottom Line
■ Tools – What’s Available Today
■ About SumTotal
■ Discussion
Page 44 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
SumTotal Making HR More Strategic
Company and Business Executive Right talent strategies to meet my
business objectives
HR Executive/Manager Making HR more
strategic
Employee or Contractor Driving Engagement and
Retention
Information Technology Low TCO; Scalable for global
diverse organization
Global visibility of Talent
Pool and Gaps
Enable actionable insight and align
workforce strategy with company
objectives
Enforce compliance across
employees, partners, and contractors
Scale to the needs of global
growing organization
Page 45 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
About SumTotal
Global Scalability
Mark
et S
hare
(users
)
SumTotal Worldwide Leader in Strategic HCM
3,500+
Customers
Over 43+ Million
End-Users
Leader in SMB, Mid-Market &
Enterprise Solutions
Worldwide Leader in Strategic Human Capital Management Solutions
Page 46 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
Agenda
■ Challenges Facing HR
■ All About the Numbers
■ Improvements to Top and Bottom Line
■ Tools – What’s Available Today
■ About SumTotal
■ Discussion
Page 47 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
It’s your turn! Ask our expert…
Kim Lennon
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