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Mark O’ Donnell, Director and Practice Leader, Human Capital Advisory Services, Consulting
Introduction HR Strategy Understanding the business Define your HR Strategy Measuring Impact of HR Assess HR Function Reassess HR Service Delivery Conclusion Questions 2 6 8 14 18 25 34 42
Defining the Value of HR
© 2011 Deloitte Touche Tohmatsu
If you can‟t quantify the value that HR has on the Business, how do you prove your worth?
Defining the Value of HR
© 2011 Deloitte Touche Tohmatsu
Competition for funds and resources is today‟s reality
Major change and turbulent market conditions make it hard for Boards to determine what the strategy should be Top management want to know the Return On Investment for all they spend including leadership development and talent initiatives These more complex economic conditions offer an opportunity not only to rethink business strategies but also HR strategy, if HR is core to the business strategy More and more of our clients are telling us that there is particular focus on HR departments to ensure that All HR investments deliver quantifiable measurable value. How can HR demonstrate a quantifiable return on investment for Human Capital initiatives? Which HR initiatives can be directly targeted at building organisation capability that has a bottom-line impact – either increasing the organisation‟s revenue or reducing costs?
Defining the Value of HR
© 2011 Deloitte Touche Tohmatsu
a global survey on people and business challenges conducted by Deloitte Touche Tohmatsu and the Economist Intelligence Unit © 2011 Deloitte Touche Tohmatsu .People are Critical to Business Performance More than 85% of senior business executives and HR leaders agree that people are “vital” to every aspect of their organisation‟s performance HR leaders and senior business executives agree the most critical people issues are: • Leadership development and pipeline • Talent management • Creating a high-performance culture • Training and development Source: Aligned at the Top.
creating a high-performance culture.g. talent management. HR operating efficiency HR is often out of the loop on strategic issues • Percentage of companies that “rarely” or “never” consult their senior HR team on key business issues: ‒ Mergers and acquisitions (63%) ‒ Compliance and regulation (26%) ‒ Talent (25%) © 2011 Deloitte Touche Tohmatsu . performance evaluations. e. leadership development and pipeline.g. e. training and development • HR issues are perceived as “administrative”.There is a gap between HR capabilities and business needs Senior business executives want HR to be more effective • Only 4% describe HR as highly effective in addressing the needs of the business • 60% describe HR as only moderately effective “People” and “HR” are often treated as separate conversations • People issues are considered “strategic”. compensation and benefits.
HR Strategy 6 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
technology.) to help address the organisation‟s most pressing strategic challenges. The strategy should also outline the foundational HR capabilities required to effectively execute the strategy. the HR strategy will be a two to three year strategy. operations. process. etc. Typically. The strategy should include a roadmap for how the HR function will execute on the strategy. The strategy should identify priorities for investment in HR products and services and in HR service delivery (people.HR Strategy – Deloitte view A HR strategy should help an organisation create unique competitive advantage by outlining how the HR function and the services it offers will create business value and address the company‟s most pressing strategic challenges. Before forming your strategy you need to understand the Business © 2011 Deloitte Touche Tohmatsu . but it should be refreshed every year.
Understanding Business Strategy 8 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
Questions to Ask What does the Business do to drive performance? Who are our shareholders and what do they want? What does our Business do? © 2011 Deloitte Touche Tohmatsu .
What do the sections of the EVM HC represent? 1. Value Drivers How value is created © 2011 Deloitte Touche Tohmatsu .
How Value is Created © 2011 Deloitte Touche Tohmatsu .Value Drivers .
service. and innovation are people. Behind every great product. S HAR E H O LD E R VALU E Revenue Growth Operating Margin Asset Efficiency Expectations Price Volume Direct Costs (COGS) Indirect Costs (SG&A) Income Taxes Property. Inventory Receivables & Payables Company Strengths External Factors Sustained Growth • Merger Integration • New Market Entry • Sales force Transformation • Rewards Transformation Global Labor Shortage • Workforce Planning • New Market Entry • Global Mobility • Learning and Development • Outsourcing and Offshoring Risk & Compliance • Global Workforce Security • Regulatory Compliance • Risk Management Future Capabilities • Change Management • Global Program Management • Leadership Development © 2011 Deloitte Touche Tohmatsu .EVM HC: Changing the Mindset of How HR Operates HR has traditionally been viewed as an overhead cost that is highly transaction-based. Plant & Equip.
Human Capital Dimensions Talent Strategies: Talent-focused activities to execute short and long term business objectives Learning and Development: Activities in support of employee and executive development Change Management and Transformation: Activities focused on the people implications of major business events Organizational Strategies: Activities in support of business initiatives that focus on developing organization and team structures Employee Rewards and Benefits: Activities that link employees‟ work experience to their commitment and contribution to business value Governance.Human Capital Dimensions .Categories of Improvement Focus The Human Capital Dimensions embedded within the map show the seven major Human Capital categories of improvement within an organisation. security. regulations. and ethics HR Strategy and Services: Activities focused on HR strategy and service delivery © 2011 Deloitte Touche Tohmatsu . compliance. Risk. and Compliance: Activities to proactively manage the people-related aspects of risk.
Define HR Strategy 14 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
Step 1: Understand Strategic Priorities & Business Context Example: +10% Annual Growth Target Improve Product Development Pipeline and Deployment Increase Share of Revenue Capture from Advertising Improve Product and Service Mix Volume Revenue Growth Price Realization Acquire New Customers Retain and Grow Current Customers Leverage IncomeGenerating Assets Strengthen Pricing Marketing & Sales Product & Service Innovation Account Management Cross.Sell/ Up -Sell Retention Cash /Asset Management Demand & Supply Management Price Optimization © 2011 Deloitte Touche Tohmatsu .
and employee development. HR Organization Transformation: Optimize the HR function. operational efficiencies. Post Merger Integration: Support rationalization of core process. technology. retention practices. and policy with a defined project portfolio. © 2011 Deloitte Touche Tohmatsu . and process excellence. Focus on Customer Service: Build a culture of high performance and innovation with a focus on the customer.Step 2: Identify Issues & Challenges Example – Strategic priorities and HR strategic actions: Exponential Headcount Increase: Focus on recruiting and selection. Enterprise Cost Reduction: Maximize investments and spend on human capital to focus on business issues. people. talent placement.
Define HR strategy 3. Identify HR‟s meaning HR Align HR Services 4. Communicate the value of HR services © 2011 Deloitte Touche Tohmatsu . Upgrade the company‟s HR capabilities 9. Segment stakeholders 5.Deloitte’s HR strategy framework Deloitte HR Strategy Framework Define Value 1. Continuously improve HR operations 10. Understand business strategy 2. Design HR services Strategy Deliver Value Deliver Value 7. Prioriti`se HR investments 6. Establish a delivery model for HR services 8.
Measuring Impact of HR 18 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
skills and attitudes and on-the-job behaviours Process and Innovation: Can we continue to improve and create value? Financial Focus: How do we look to shareholders? The HR Balanced Scorecard aligned to business strategies measures improvement in customer value 19 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu . 1996).HR Balanced Scorecard? “The Balanced Scorecard fills the void that exists in most management systems – the lack of a systematic process to implement and obtain feedback about strategy” (Kaplan & Norton. The Balanced Scorecard is a means of connecting key decisions and control. that measures the value created by initiatives to the core business areas. compares program benefits to costs including: Customer Experience: How do customers see us? Business Impact & Satisfaction Measurements Talent Strategies: What must we excel at? Learning and application measures – knowledge.
Best Practice Design: Characteristics of a Successful Scorecard Characteristics Reason Involves the scorecard owner in the design Only this person knows the answers Makes efficient use of managers‟ time Management time is scarce Understandable & transferable Must be communicated across the organisation Easily aligned across the organisation Help the whole company work towards a common goal 20 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
ways of thinking and management tools. HR Value HR Value 21 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu . HR can fuel more sustainable employee initiatives with longer-lasting results The Balanced Scorecard works as an „umbrella‟ concept that links together organisational objectives.Value of a Balanced Scorecard The Balanced Scorecard examines the evidence of key HR Initiatives linking them to business performance measures that drive Business Strategy The value of using a Balanced Scorecard.
Overall HR Scorecard – Client Example Potential Metrics Financial • Average termination cost • Cost of turnover • Cost of acquisition per hire ♦ HR Training spend (per Manager / Director / Executive) HR FTE Ratio SLA compliance Vendor Management FTE Ratio+ HR Operating Expense/FTE Customer Experience • Hiring Manager satisfaction with quality of new hires • Employee satisfaction with Career Zone ♦ Employee satisfaction with career progression Business unit satisfaction with organisation design support Employee engagement index Frequency of communication Response rates on effectiveness surveys Employee HRO satisfaction Self-service availability rate Portal usage penetration rates Talent • Number of critical positions and critical workforce segments identified • Retention of new hires • Retention rates by critical workforce segments • Leadership stability rates ♦ Number of internal leadership appointments ♦ Share of leaders reviewed in talent review process ♦ Timeliness of talent reviews Number of employee referrals Diversity of leadership team Outsourcer turnover rate Process / Innovation • Line manager use of recruitment centers • Share of employees with basics in place “day one” • Time to efficiency for new hires ♦ Time to identify & approve leadership training request ♦ Course enrollment and completion rates ♦ Share of positions with successor identified ♦ Number of job families for which there are established career paths Share of business using consistent change leadership framework Number of issues at level 1. level 2 or level 3 support Legend (Link to Critical HR Capabilities) • Talent Management ♦ Leadership Development Organisational Development HR Administration © 2011 Deloitte Touche Tohmatsu .
etc) • Time to efficiency for new hires • Number of lateral moves within a business unit • Number transfers between business units • Time to fill positions with internal transfer • Share positions filled with internal candidates • Number of recognition awards granted • Cost of on-boarding process On-Boarding & • Employee / Manager satisfaction with on-boarding process Orientation • • • • Cost of recognition practices Average termination cost Cost of turnover Compensation impact of replacement hires • Employee satisfaction with recognition practices • Recognition rate of the employment brand by critical workforce segments • Management accountability for onboarding process • Retention of new hires • Voluntary turnover rate (by department.Metrics for critical HR capabilities and services can be identified… Potential Talent Management Metrics – Client Example Financial • Cost of workforce planning process Customer Experience • Business unit satisfaction with workforce planning process Process & Innovation • Workforce planning process performed annually and linked to budgeting process Talent • Number critical positions and critical workforce segments identified • Share of critical jobs held by those with high / low performance levels • Share of new hires receiving top performance rating • Management accountability for the quality of new hires • Share of new hires leaving the organizations within 6 months • Employee tenure by sourcing method • Poor quality hire rate Workforce Planning & Segmentation Talent Sourcing & Acquisition • Cost of sourcing & acquisition process • Cost of acquisition per hire • Business case savings realization for Career Zone implementation • Referral bonus cost per hire • Hiring Manager satisfaction with recruiting process • Hiring Manager satisfaction with quality of new hires • Employee satisfaction with Career Zone • Number of positions where talent pool is already identified • Time to fill positions • Recruitment source ratio • Requisition response rate • Referral conversion rate • Applicant conversion rate • Interview conversion rate • (First) offer acceptance rate • Ratio of contractors to full-time staff • Share of employees with basics in place day 1 (phone computer. level. workforce segment) • Retention of high performers • Retention of critical segments • Leadership stability rate • Accession rate • Percentage of referral hiring Retention client x Case – use in Roadmap Section © 2011 Deloitte Touche Tohmatsu .
Define HR strategy 3. Assess HR Function 5. Understand business strategy 2. Establish a delivery model for HR services 8. Design HR services HR Strategy Deliver Value Deliver Value 7.Align HR Services Deloitte HR Strategy Framework Define Value 1. Continuously improve HR operations 10. Upgrade the company‟s HR capabilities 9. Identify HR‟s primary performance levers Align HR Services 4. Communicate the value of HR services © 2011 Deloitte Touche Tohmatsu .
Assessing your HR Function 25 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
HR customers. HR roles. and HR enables. as well as for each of the key elements of our HR service delivery model: HR strategy. The HR Maturity Model captures our views on leading practices for talent management. © 2011 Deloitte Touche Tohmatsu .HR Maturity Assessment • • We have developed an HR Maturity Model to meet this objective.
Process. & Compliance Integrated Technologies HR Portal & Self-Service Reporting & Analytics Governance. Policy.g.Deloitte Global HR Maturity Tool Dimensions Talent Maturity • Talent Strategy & Plan • Talent Metrics • Talent Geographic Reach & Diversity • Attraction • Development • Retention • Work Environment • Innovation • Employer Brand & EVP • Talent Governance & Leadership • Talent Infrastructure • Talent Attitudes & Culture HR Strategy & Service Delivery Maturity HR Strategy Alignment • • • • • • • • • Business Strategy Impact HR & Talent Strategy Alignment Business Alignment Customer Segmentation HR‟s Role in Key Talent Decisions HR Planning Effectiveness HR Metrics HR Capability HR Enablers (e. Reporting & Technology) HR Customer Segmentation • • • • • • Employees Managers Executives Non-Employees Applicants Retirees • HR Credibility HR Service Delivery Roles • • • • • Business Partner CoE SSC Outsourcer Vendor Manager HR Service Delivery Enablers • • • • • • Processes Procedures. Service-Level Agreements (SLAs) & Metrics © 2011 Deloitte Touche Tohmatsu . Governance.
information and service delivery capability TALENT INFRASTUCTURE We have limited talent systems. but we are considering implementing some innovative ideas Our working environment is flexible and adjusts to meet the evolving needs and desires of our talent while continuing to support our mandate We continue to evolve and improve our talent management approach – often we build on what has worked well in other organizations We put our talent at the heart of our organization. and we are well positioned to continue to do so in the future We are always able to attract the talent that we need. most of the time to achieve our organization‟s goals DEVELOPMENT We are evaluating which talent and leadership development programs to invest in Our talent and leadership development programs exist in pockets and are often tactical in nature We have a number of significant talent and leadership development programs that are coordinated across our organization Our talent and leadership development programs are highly inter-connected and have beneficial effects on our talent Our talent and leadership development programs deliver all the benefits that both our organization and talent demands RETENTION We typically struggle to retain our talent We can retain some of our talent some of the time We have structured and organized our working environment to support our mandate and meet the needs of our talent We can retain selected talent We can retain most of our talent most of the time The way that we are structured and organized enables us to maximize the contributions that our talent makes to our mutual success We regularly compare our approach to managing talent with other organizations and we typically remain ahead of our competitors We are able to retain our talent all of the time and proactively manage turnover WORK ENVIRONMENT There are ways that we could improve our working environment to support our mandate and meet the needs of our talent Our talent initiatives are rudimentary in nature. our talent itself drives how we are structured and organized We are originators of industry leading talent management thinking and best practices – our competitors typically copy what we do INNOVATION We have implemented a number of innovative talent focused initiatives EMPLOYER BRAND & EMPLOYEE VALUE PROPOSITION We are beginning to develop our employer brand and define our employee value proposition We proactively manage our employer brand and have a well defined employee value proposition We are an employer of choice and have a clearly articulated and supported employee value proposition We are the leading employer of choice for the talent that we need now We are able to adjust our employer brand and employee value proposition to meet our evolving organization and talent requirements Our executives eagerly devote substantial amounts of their time to talent. and are able to predict the returns that we will get We take full advantage of the global diverse talent market today. our processes are being developed and our service delivery capability is evolving As an organization we believe that the management of talent is important to the success of our organization We have most of the talent systems. processes. and in the quantities required to achieve all our organization‟s goals STRATEGY & PLAN METRICS We have a small number of talentfocused metrics that provide us with some of the information that we require We have a set of talent-focused metrics in place.Talent Maturity Model DEVELOPING We do not have a talent strategy or our talent strategy is in development or under revision BASIC Our talent strategy and our organization‟s strategy are aligned PROGRESSING Our talent strategy is an essential component of our organization‟s strategy. with input from senior executives Our talent initiatives are sponsored by senior executives. in addition their rewards are also directly linked to talent KPIs Our talent systems. processes. and are implemented within a common governance structure Talent is a significant and regular item at our executive and board meetings. however we are not sure of what we invest in talent and what our overall return is We have a regional / national talent focus and are making some progress on our diversity agenda We know how much we invest in our talent. information and service delivery capability that we need ATTITUDES & CULTURE Talent management is embedded in our ways of working Successful people in our organization generally have a talent mindset Talent management is in our organizational DNA © 2011 Deloitte Touche Tohmatsu . effective and integrated talent systems. although it is not always clear what return we get for that investment Our approach to talent has an international dimension to it and we have made significant progress on our diversity agenda We are able to attract some of the talent that we need. we use agreed protocols to facilitate our decision making We have a full suite of efficient. information and service delivery capability are flexible and have industrial scale capacity GOVERNANCE & LEADERSHIP Our HR function is responsible for all the talent initiatives in our organization Our HR function typically leads our talent management initiatives. without it our business strategy would be incomplete ADVANCED Our talent strategy and our organization‟s strategy are seamlessly integrated and directionally consistent MARKET LEADING Our organization‟s strategy is informed and influenced by our talent insights and predictions We make informed business decisions about where to place our talent investments. some of the time to achieve our organization‟s goals We know how much we invest in our talent and we know what return we get for that investment GEOGRAPHIC REACH & DIVERSITY We have a local focus on talent and limited diversity The global diverse talent market is of value to us today ATTRACTION We consistently face challenges in attracting the talent we need to achieve our organization‟s goals We sometimes find it difficult to attract the talent that we need to achieve our organization‟s goals We are able to attract most of the talent that we need. though we are beginning to identify some initiatives to rectify this Some of us believe that the management of talent is important to the success of our organization We have a handful of tactical talent systems. when we need it. processes and service delivery capability. processes.
but there are still some business capability gaps (e.. retention. and is viewed only as a back office function HR has some credibility in the organization and is viewed as capable of providing technical expertise in some areas of HR HR has high credibility as an expert in functional HR areas HR has high credibility both in functional HR expertise and ability to contribute to organization success HR leaders are considered strong candidates for succession to broader organization leadership roles © 2011 Deloitte Touche Tohmatsu . reporting and supporting technology We are have the basics in place to enable HR service delivery. terminations. and use this to shape our overall HR & Talent strategies We use our deep understanding of the overall organizational value chain and how people add value to guide our HR & Talent strategies We use our deep understanding of the overall organizational value chain and how people add value to identify and create targeted HR & Talent strategies for critical workforce segments CUSTOMER SEGMENTATION Our HR activities do not target different customer segments and we do not measure customer service levels Our HR activities do not target different customer segments. offer acceptance) We have a balanced scorecard for HR that includes financial. and predictive analysis of metrics is used in HR planning We have a career development rotation program in place to rotate HR talent between Business Partner. leading indicators (e. process efficiency and innovation metrics Key talent/HR metrics are part of the overall organization scorecard. and predictive analysis of metrics is used in organization planning HR CAPABILITY There are significant gaps in HR capability required to deliver on our HR activities We have most of the HR functional capability that we need.g. analytical skills) We are beginning to adopt a systematic perspective on HR enablement. however do not always adjust the appropriate HR enablers when changes are made We have a career development rotation program in place to rotate talent between HR and business roles HR ENABLERS (e. customer service. primarily focused on outputs vs. but we do measure customer service levels Our HR strategy does identify different target customer needs.g. recruiting) We have a rigorous process for assessing HR priorities and impact on the organization and our budget is built on outcomes of the process Our HR strategy and service delivery reflect a higher investment in the most critical customer groups and we measure customer service more rigorously among these customers Our HR team is a sought after advisor for all key talent decisions Our most critical customer groups receive higher investment. governance. Reporting & Technology) We do not take a coordinated approach to enabling our HR service delivery through policy.HR Strategy Alignment Maturity Model DEVELOPING ORGANIZATION STRATEGY IMPACT BASIC Our HR leadership is asked to help create plans to execute on our organization‟s strategy PROGRESSING Our HR leadership has some involvement in organization strategy formulation and is an active participant in execution ADVANCED Our HR leadership is actively involved in organization strategy formulation and execution MARKET LEADING Our HR team leadership has an equal voice at the table in overall organization strategy formulation and execution Our HR leadership is not involved in organization strategy formulation or execution planning HR & TALENT STRATEGY ALIGNMENT We have an HR strategy but no articulated talent strategy We have an HR strategy but it is not clearly aligned to our Talent and Organization strategies We have both a Talent strategy which outlines the organization‟s talent needs and an HR strategy that details how HR will deliver organization requirements Our HR strategy articulates how we will deliver on the organization‟s talent strategy Our HR strategy and our talent strategy are seamlessly integrated and directionally consistent in supporting the organization‟s strategy BUSINESS ALIGNMENT We do not have a clear understanding of the overall organizational value chain and how people add value We have a general understanding of the overall organizational value chain but cannot clearly articulate how people add value We are beginning to be able to articulate how people add value in the overall organizational value chain. Process. Center of Expertise and Shared Services roles We have a systematic perspective on HR enablement and look to adjust the appropriate HR enablers when changes are made Our process of assessing HR priorities includes predictive analytics and measures of ROI to inform our decisions HR METRICS We have very limited HR metrics We have some HR metrics. business acumen. but there are still some HR functional gaps We have identified critical HR capabilities and have most that we need. we ensure our top HR talent is focused on delivering service to them Our HR team proactively identifies talent issues and facilitates business decision making HR‟S ROLE IN KEY TALENT DECISIONS Our HR team learns about key talent decisions and actions after the action is taken Our HR team is asked to execute on talent decisions after a decision is made by the organization HR PLANNING EFFECTIVENESS We react to issues as they arise. Governance. Policy. with no formal process or tools for assessing HR priorities We create an HR budget at the start of the year based on a high level view of priorities Organization and other functional leaders provide input in our process for assessing HR priorities and provide additional budget Our balanced scorecard for HR includes organization metrics in addition to HR metrics. we measure customer service levels for most HR roles and services in our organization Our HR team provides the business guidance on some talent decisions (e...g. but we are lacking in consistency and more advanced capabilities We take a proactive approach to continuously improving service delivery through the adoption of leading practices in HR enablement HR CREDIBILITY HR has low credibility in the organization.g. process.
developing relationships and leveraging our technologies to effectively manage the process RETIREES We provide ad hoc support to retirees as required We provide support to retirees as required through centralized internal or outsourced vendor support for pension and other questions and transactions In addition to providing support for questions and transactions. typically regarding compensation matters We react to a fairly broad set of talent requests from managers. with sophisticated. but continue to deliver „one size fits all‟ HR services and support through faceto-face and phone interactions with generalists/HR BPs PROGRESSING We are beginning to work more frequently with executives on a broader range of HR/talent matters We proactively work with managers on a fairly broad set of HR/talent requests. branded employee portal technologies. but provide few customized services and service delivery options for managers We treat employees and managers as distinct customers. we proactively communicate with retirees regarding organization updates We treat retirees as a potential contributor to our ongoing success. delivering high quality service to meet their needs and providing a channel for them to provide innovative ideas. but our technology is not linked to HRMS requiring duplicative data entry upon hire ADVANCED Our HR leader is a member of the executive team and we work proactively with the executives to address business issues We are viewed as partners in addressing most HR/talent issues. etc. and manage our sourcing. but still provide few customized services and service delivery options We offer „one size fits all‟ employee service through shared service centers and limited self-service options. our employees do most transactions through selfservice EXECUTIVES MANAGERS We respond reactively to requests from managers on a limited set of HR/talent issues EMPLOYEES Employees are our primary customers and we provide basic. employees must use these channels for inquiries and transactions MARKET LEADING Talent is a regular topic at executive meetings. and HR proposes key issues and solutions proposed for discussion We are viewed as partners in addressing most HR/talent issues. „one size fits all‟ HR services and support through face-to-face and phone interactions with generalists/HR Business Partners (BPs) NON-EMPLOYEES (i. candidate referrals. with broad shared services and selfservice options. Contractors) HR does not manage contractors or other „non-employees‟ and does not know what relationships are in place throughout the organization HR does not manage contractors or other „non-employees‟. and we have built significant talent management capability among our managers to handle most issues We are pioneers in creating innovative self-service options for our employees. regular employees and partner with the organization in execution We proactively partner with the organization to consider alternatives to optimize our use of regular and contract or „nonemployee‟ workforce We leverage our sophisticated technologies to target new sources of applicants.HR Customer Segmentation Maturity Model DEVELOPING We rarely interact with customers at the executive level BASIC We react to infrequent requests for information from Executives. we provide access to retirees to organization portals for information In addition to providing support for questions and transactions. but accountability is not clear and the processes are not supported by technology and are cumbersome We treat applicants as an important customer segment.e. © 2011 Deloitte Touche Tohmatsu . selection and new hire processes effectively and efficiently APPLICANTS We do not have processes in place to effectively manage applicants We have varied processes in place to track and manage applicants. strengthen relationships. but we do track relationships with them through manual processes We have a strategy in place for the effective utilization of contractors or other „non-employees‟ vs. and we provide customized HR services for managers and tailored service delivery options We offer tailored employee services for critical employee segments. employees can still access information through generalists / HR BPs We have tailored processes and policies in place to manage contractors and other „nonemployees‟ and HR provides support to the organization in execution Our automated application process and tracking capability allows us to be responsive to all applicants.
with support for negotiation and management of contracts We have built sophisticated vendor management capability in HR or other functions in our organization to ensure we optimize our vendor relationships and services provided. most still spend 30-50% of their time on administrative activities ADVANCED Our HR BPs are senior resources who focus their time on providing coaching and advice on talent issues and opportunities to leaders and are rarely involved in day to day administrative activities We have leading edge capability in some of our CoEs which focus on developing innovative solutions to our most challenging organizational needs and our CoE talent has strong consulting and change management skills MARKET LEADING Our HR BPs are strategic advisors who provide coaching and advice to leaders on both talent and broader business issues. we have created an overall vendor management strategy and carefully manage our SLAs © 2011 Deloitte Touche Tohmatsu . our organization and our vendors both benefit from enhancements in service delivery VENDOR MANAGER We do not have vendor management capability in HR and have limited access to vendor management capability in other functions of our organization We have limited vendor management capability in HR or other functions in our organization. but have no overall strategy for outsourcing We currently outsource specific services. in depth understanding of the organization‟s needs Our CoEs develop new programs and policies to support the organization‟s needs based on input from our HR BPs. and did complete a sourcing analysis before making the decision to outsource We have developed an overall sourcing strategy for HR. however. assessing benefits and challenges of outsourcing several HR processes Our sourcing strategy included an assessment of full outsourcing of our shared services capabilities We monitor changes in the outsource service provider market and benchmark our internal shared service capability or our outsourced services to ensure we are leading edge We effectively manage large outsource relationships as an integral component of our overall HR service delivery model and governance structure. effectiveness and cost metrics. our HR talent rotates through CoE. HR BP and line roles in our organization HR BUSINESS PARTNERS (BP) CENTERS OF EXPERTISE (CoE) We have some CoEs which focus on developing policies and programs based on HR expertise vs. employee and manager inquiries. we have well defined performance indicators and service level agreements Our shared services organization delivers with leading efficiency.HR Roles Maturity Model DEVELOPING Our HR business partners (BPs) are generalists who spend the majority of their time processing administrative activities and responding to employee or manager inquiries We have HR technical specialists but they are not organized in Centers of Expertise (CoE) and may not have the depth or breadth of expertise we need to support the organization‟s needs BASIC Some of our HR BPs are developing relationships with leaders which allow them to have greater impact. we are frequently approached by other organizations to share leading practices in shared services OUTSOURCER We may currently outsource specific services. and some advisory services Our shared service organization leverages leading edge workflow. most still spend a significant amount of time on administrative activities PROGRESSING The majority of our HR BPs are developing relationships with leaders which allow them to have greater impact. including transaction processing. many of our HR BPs come from line roles in the organization We have leading edge capability in all our CoEs and frequently assess their focus to ensure we are supporting the most pressing organization needs. but no formal accountability exists for management of HR vendors We have clarified accountability for management of HR vendors within HR or other functions in our organization. case management and self-service technologies to optimize efficiency and enhance effectiveness. primarily with respect to payroll and benefit administration processing and limited employee inquiry capability We leverage shared services to support multiple HR processes. and our leaders and employees SHARED SERVICES We do not leverage HR shared services in our organization We leverage limited shared services capability. however.
up-to-date. integrating external data sources into workforce analysis and vice versa) to drive management decisions We focus reporting on generating insight rather than numbers. consistent and centrally available data is used for predictive and truly differentiating reporting We have a cohesive HR governance structure with clearly defined roles and responsibilities and an HR scorecard is in place that links to the overall organization metrics GOVERNANCE. annual hires. SLAs & METRICS We do not have HR governance structures or metrics in place We have informal HR governance structures and metrics but they are not clearly articulated We have some formal HR governance structures and metrics but their mandates are not clear Our HR governance structures are well defined and are followed most of the time and metrics are in place to assess overall HR efficiency and effectiveness © 2011 Deloitte Touche Tohmatsu . we do not have an HR portal or any self-service functionality We have a basic HR portal in place with basic self-services and the functionality for downloading and printing online forms for a wider range of processes. policy documentation is centrally held We have global policies with minimal local variations. annual turnover. most of our policies are inconsistent across our organization There are some global policies. with some local variations. there is some enhanced workflow and basic OCR functionality in place HR PORTAL & SELF-SERVICE We do not have an HR portal.g. and make standard reports available electronically. comparability and controllability across the organization We have an HR portal that is integrated with robust employee and manager self-service (ESS and MSS) functionality and the HR knowledge base REPORTING & ANALYTICS We do very limited HR reporting Our reporting is heavily manual with few standard reports defined Our reports are extensively automated and provide analytical insight (e. Talent Management.HR Enablers Maturity Model DEVELOPING BASIC There is significant local variation in process. Compensation. corporate HR takes a proactive role in driving harmonization enabling further standardization and automation of processes We have a fully functioning. however. robust HRMS that includes all modules (i. with some local variations. and Learning). etc. and metrics for each process are defined MARKET LEADING We have a clear process architecture. entities. there is some automation however data and interpretation inconsistencies make it difficult to ensure full transparency.g. process documentation is centrally held POLICIES & COMPLIANCE We have not documented any of our HR policies and they are very diverse across sites.e. we have little or no documentation of local processes There are some global processes. countries. the resulting impact on further process standardization and automation is limited INTEGRATED TECHNOLOGY We do not use a comprehensive HR technology platform and data is not maintained in a central location We have an HR technology platform to manage personnel administration but do not use all functionality or it does not adequately meet the needs of the organization We have a strong HR management system (HRMS) with some basic workflow but no Optical Character Recognition (OCR) functionality in place Our HRMS supports the main people priorities of the organization and goes beyond administration to include functions like Recruiting or Performance Management. etc). Recruitment. the HR knowledge base is not linked to portal Our reporting is transactional based (e. global processes with minimal local variations are held on an accessible knowledge base Our HR policies and procedures are globally consistent. We have documented some of our more „global‟ HR policies and procedures. Organization and Positions. with Six Sigma compliant process documentation. units. period over period trending. processes are held centrally and are readily accessible. policies are held centrally and are readily accessible. selfservice functionality or HR knowledge base We have an HR knowledge base that is paper-based. the knowledge base is completely integrated PROCESSES We do not have any global processes. secured by portal roles. Payroll and Time. process documentation is held locally and is not easily accessible PROGRESSING ADVANCED We have global processes with minimal local variations. and can be easily accessed electronically. workflow and OCR functionalities are fully leveraged We have an enhanced HR portal that includes a wide range of selfservice and workflow functionality using advanced technology such as interactive forms. Benefits.
Identify HR‟s primary performance levers HR Align HR Services 4. Communicate the value of HR services © 2011 Deloitte Touche Tohmatsu .Deliver Value Deloitte HR Strategy Framework Define Value 1. Define HR strategy 3. Establish a delivery model for HR services 8. Upgrade the company‟s HR capabilities 10. Understand business strategy 2. Prioritise HR investments Strategy Deliver Value Deliver Value 7. Segment stakeholders 5.
Establish and Re-assess HR Service Delivery Model 34 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
Assess how effectively service is being delivered through retained and outsourced HR Roles Evaluate the effectiveness of Enablers that HR can leverage to deliver efficient and effective service. basic relationships and players in the transformed HR organization. Business Partners and Centres of Excellence interacted with managers and employees. © 2011 Deloitte Touche Tohmatsu . Review Customers to determine if unique HR requirements exist for different customer segments.Leading Practices The Evolution of HR Service Delivery HR Service Delivery Framework (mid-90‟s) Deloitte HR Service Delivery Framework Traditional „Ulrich‟ model was used to describe the high level. showing how the three building blocks of Shared Services Operations.Service Delivery Models . Ensure HR service delivery model is aligned to deliver effectively on Business & HR Strategies.
Provides input to the prioritisation of HR-owned business projects. Sets the tone and pace of the HR strategy. Manages SBU/country-specific HR issues but does not perform local transactions. delivering high quality. Provides SBU/division with local geographical input for Group policy blueprint development. Shared Services Provides standardised. fit for purpose transactional and functional expertise to HR. © 2011 Deloitte Touche Tohmatsu . Responsible for continuous improvement of delivery of HR processes and technology utilisation by HR. Innovates. Resolves complex issues escalated from the Shared Service Centre and HRBPs.Service Delivery Models . Group HR is the business partner to the Exco. Acts as a business consultant maximising the value talent brings to the SBU.Leading Practices The Four Building Blocks The building blocks that make up the four key roles in the operating model are Group HR. guidance and query resolution. aligning group and SBU/Divisional HR strategies. SSC and Business Partners Represents HR at the Exco level. policies and processes in line with latest industry thinking. designs and develops HR strategies. in line with the Group business strategy. Responsible for managing succession planning and HR issues for Exco -2. Provides expert guidance to HRBPs and senior executives in the SBUs/Divisions. efficient administration for all HR transactions. Owns the maintenance of the strategic framework for the CoEs to develop the HR policy blueprint. CoEs. Group HR Business Partners Drives the strategic people issues. Customer-focused contact centres providing the first point of call for employees and managers for advice. providing subject matter expertise to HR projects and acting as the change management agent. consistent. Centres of Expertise Designs and develops deep technical capability in areas of HR that drive strategic agenda. accurate.
liaising with Business Partners to ensure customer satisfaction Manages queries form managers and employees Business Partners “The face of HR to the business” BPs provide input to Group HR on the current and future needs of the business from HR. and some of the key responsibilities.Leading Practices Service Provision RECIPIENT OF SERVICES FROM… This matrix summarises the relationship each team within the model has with the other HR teams. along with direct and indirect feedback on customer satisfaction with HR service delivery BPs provide guidance to CoEs on the strategic direction and priorities of the business including future needs BPs act as a conduit between the business and CoEs translating business priorities and needs © 2011 Deloitte Touche Tohmatsu . succession planning and career planning of HR professionals” Group HR Centre of Expertise Shared Services Business Partners P R O V I D E S S E R V I C E S T O… Group HR provides the CoE with the framework for developing HR policies that enable the execution of the corporate HR strategy Provides the cohesiveness for the CoE teams to work together to deliver the strategy in an aligned way Group HR ensures the HR service delivery model operates effectively. operating efficient high quality processes and providing front line support to managers and employees BPs act as a conduit between the business and SSC. maximising self-service and emulating the brand in the way it delivers customer services” SSC provides the appropriate HR services support requested by Group HR. ensuring clarity of roles and responsibilities in the delivery of all HR services Provides BPs with a framework for the consistent execution of the BP role. interpreting customer needs and feedback “from the coal face”. integration between processes and provides guidance to the SSC for continuous improvement in HR process delivery Resolves complex issues escalated from the SSC The CoE provides strategic consulting support to the BPs. Group HR • “Owns the skills development. advising on complex and strategic people-management issues and provide guidance on the use of HR policies and tools to meet the business‟s needs Shared Services “Delivers high quality and efficient HR services to managers and employees. within the dynamics of different SBU/Divisional cultures and environments Owns succession planning working with BPs who manage the talent pipeline Centre of Expertise •“Internal Consultants to the business” The CoE provides expert input into the development of the corporate HR strategy by Group HR The CoE owns the end-to-end processes for HR delivery. for example administration of HR issues The SSC operationalises strategies and policies developed by the CoE. managing the performance expectations of the business and SSC Resolves complex queries escalated from the SSC SSC delivers high quality and efficient HR processes to the SBU to agreed SLAs.Service Delivery Models .
including any required changes and ensures client complies Coach line managers in people management Ensure effective execution of HR policies and processes in their business Ensure compliance with local legislation and regulatory requirements Interact with the Workers‟ Council on individual issues Business Partners Attributes Client relationship management People strategy development Contracting/stakeholder management Influencing Business acumen Consulting Resource management Policy implementation/ communication Negotiation Conflict resolution Change management Marketing Business planning Program Management Analytical skills (Interpret reporting) Business Partners don‟t: Support line managers and employees in day-to-day administration Execute design and development of HR programs.g. Total Rewards) and the business Collaborate with Centers of Expertise to create innovative HR solutions Provide feedback to Centers of Expertise about HR solution effectiveness Support culture change taking direction from the business leadership Develop the leadership and manage the talent pipeline in the Business Unit Business Partners do: Analyze and investigate business / people issues and trends within the bank Deliver HR services in line with business needs Focus on consultative support and HR solution delivery to senior line management Challenge the business in order to ensure aligned and integrated people strategy. employee relations Responsible for implementing initiatives at the business unit level and may support the design of specialized or customized training. and fair people management Support all HR products and services. performance management. and recruiting “Broker” of services between specialized internal groups (e. talent management. employee engagement. have non-managerial employees as clients Undertake people management responsibilities on behalf of line managers Interact with the Workers‟ Council on group issues Capabilities Facilitating organization change Business acumen Client service delivery Organizational design Consulting Personal and professional impact Coaching and influencing © 2011 Deloitte Touche Tohmatsu .Leading Practices The Business Partner Role Assumptions / Attributes Business Partners Role Work with Business Unit to translate business needs into HR requirements and working environment Identify the organizational capabilities required to execute the business strategy Acts as a consultant most frequently on issues related to strategy execution and change.Service Delivery Models . procedures or policies Manage employee data Report on workforce-related data Resolve individual EE queries. communications.
Divisional level Metric definition e. transactions and requests that the SSC cannot resolve CoEs do: Lead the development of product strategy Partner BPs in consulting with the business to create innovative solutions when standardized products are not sufficient Provide subject matter expertise.Service Delivery Models . products and processes and create strategy. advice and guidance to BPs and HRS Support functional specialists in the resolution of complex technical queries and the delivery of streamlined products and services Research and develop / source best solutions and new concepts with respect to people management. across the whole of the enterprise Customers of the CoEs are typically the BP. and tools for local implementation Align policies and solutions across the enterprise as appropriate Collaborate with each other to deliver comprehensive solutions to the Business Partners Monitor solutions. org effectiveness and product impact Analytical skills (Interpret reporting) Quality and risk management CoEs don‟t: Undertake operational administrative processing Manage and administer data Manage and perform any operational transactions Consult in systems and administrative process design and development Manage services vendors Interact with employees on day-to-day matters Get involved in the execution of HR policies Capabilities Facilitating change Innovation Personal and professional impact Business acumen Thought leadership Consulting skills Client focus © 2011 Deloitte Touche Tohmatsu . monitor and evaluate future legislation and market trends in their areas of specialty Align the innovation agenda with the needs and directions of the SBUs/divisions Develop and deploy innovative HR policies. and employee feedback to drive continual improvement Act as the final escalation point for advice on customer queries. Regional. products and services Coordinate and work with results of internal and external benchmarking to create and share pools of best practice Design organizational metrics for CoE products and interventions when weaknesses are detected Partner with HRS when developing new products to ensure effective deliverability Communicate product changes and updates to BP and HRS CoEs Attributes Subject matter expertise Content strategy development Solution design Policy development Innovation Advisory Consulting Contracting /stakeholder management Matrix management Market intelligence/ best practice (push) Business understanding at Organisational. policy. May also be contacted by the business and / or contact the business themselves Keep appraised of leading practices.g. programs. vendors.Leading Practices The CoEs Role Assumptions / Attributes CoEs Role Provide expert solutions and services to the Business Units. SSC processing.
.Service Delivery Models . Payroll.g. training Have responsibility for implementing necessary changes process changes in partnership with global process owner Process HR transactions Shared Services Attributes Customer service Transactional processing Policy measurement/ metrics tracking Reporting e. including: Manage and process HR transactions (e.g. guidance and query resolution Significantly reduce HRBP and CoE involvement in routine administrative tasks and inquiries Provide answers to basic and more complex inquiries Focus on solution delivery and execution Perform organizational and data analytics and quality management Support problem solving. pay changes.g. metrics and vendor management to ensure continuous improvement Control operational cost and quality Are governed by service level agreements that meet the needs of the Business Units Use technology to support customer contact Shared Services do: Provide first point of contact for the provision of employee and manager advice. case management and issue resolution Deliver commoditized products and standardized services Deliver and maintain self service offerings Monitor HR compliance Have specialist expertise e. changes in terms/conditions) Maintain employee data Serve as single point of contact for HR queries and requests (when questions can not be answered through self-service) Resolve queries and requests and escalating to other HR areas as appropriate Liaise with HR Business Partners and Centers of Expertise to achieve resolution of customer‟s queries and requests Have performance management processes.g. standard letters.Leading Practices The Shared Services Role Assumptions / Attributes Shared Services Role Provide administrative support for the rest of HR. performance management) and provide any retained administrative/ transactional process support Produce outputs (e.. provision of reports Technology efficiency improvement Process efficiency Cost effectiveness Management of consistent delivery of services Vendor management Query resolution Analytical skills (KPIs) Contracting /stakeholder management Shared Services don‟t: Work with managers in solving business challenges Allow deviation from agreed standard processes and procedures © 2011 Deloitte Touche Tohmatsu .
Communicate the value of HR services Understand the value of HR services Develop execution plans for specific constituencies Implement an integrated communication process and obtain feedback Create an innovative brand statement and/or logo that helps reinforce the HR value proposition © 2011 Deloitte Touche Tohmatsu .Key steps in delivering value through HR 1. Continuously improve HR operations Implement robust systems and leading practices to deliver HR services Establish appropriate service levels and performance targets Maintain a competitive cost structure relative to industry benchmarks Implement Lean Sigma or other continuous improvement methods to help improve operational excellence 2.
Conclusion 42 Defining the Value of HR © 2011 Deloitte Touche Tohmatsu .
Understand the Business Define your Strategy Build Measures Assess Current Re-evaluate how HR is Delivered Communicate © 2011 Deloitte Touche Tohmatsu . 6. 3.Conclusion 1. 5. 2. 4.
44 © 2011 Deloitte Touche Tohmatsu .
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