Measuring Talent Management Effectiveness With Integrated Analytics

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Understanding the effects your talent management program is having on your organization’s top and bottom line can ensure greater success of your initiatives. Having the right tools in place to track and analyze in real time is key.

Join this webinar to see how integrated analytics can make your organization more effective. You’ll interact with the speaker as she demonstrates the impact of integrated analytics on the top and bottom line.

During this interactive webinar, you will learn how to:

• Leverage key performance indicators for talent management.
• Create a closed-loop framework to measure and improve workforce effectiveness and efficiency.
• Make a good analytics tool work for you.
• Demonstrate the impact of integrated talent management analytics.

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Measuring Talent Management Effectiveness With Integrated Analytics

  1. 1. Measuring Talent Management Effectiveness With Integrated Analytics You can listen to today’s webinar using your computer’s speakers or you may dial into the teleconference. If you would like to join the teleconference, please dial 1.408.600.3600 and enter access code: 491 777 946 #. You will be on hold until the seminar begins. #TMwebinar
  2. 2. Measuring Talent Management Effectiveness With Integrated Analytics Speaker: Kim Lennon Senior Product Manager SumTotal Systems Moderator: Kellye Whitney Managing Editor Talent Management magazine #TMwebinar
  3. 3. Tools You Can Use• Q&A – Click on the Q&A icon on your floating toolbar in the bottom right corner. – Type in your question in the space at the bottom. – Click on “Send.” #TMwebinar
  4. 4. Tools You Can Use• Polling – Polling question will appear in the “Polling” panel. – Select your response and click on “Submit.” #TMwebinar
  5. 5. Frequently Asked Questions1. Will I receive a copy of the slides after the webinar? YES2. Will I receive a copy of the recording after the webinar? YES Please allow up to 2 business days to receive these materials. #TMwebinar
  6. 6. Measuring Talent Management Effectiveness With Integrated Analytics Kellye Whitney Managing Editor Talent Management magazine #TMwebinar
  7. 7. Measuring Talent Management Effectiveness With Integrated Analytics Kim Lennon Senior Product Manager SumTotal Systems #TMwebinar
  8. 8. Measuring TalentManagement EffectivenessWith Integrated AnalyticsPresented by: ■ Kim Lennon – Sr. Product Manager
  9. 9. Agenda ■ Challenges Facing HR ■ All About the Numbers ■ Improvements to Top and Bottom Line ■ Tools – What’s Available Today ■ SumTotal ■ DiscussionPage 8 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  10. 10. Human Resources Maturity Model 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. 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 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 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, 2010Page 9 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  11. 11. HR Maturity Has Direct Impact on Business HR’s Relationship to Business Strategy 40% 30% 20% 10% 0% HR is a full partner in developing and implementing the business strategy Low Market Performers High Market Performers Bersin & Associates Institute for Corporate ProductivityPage 10 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  12. 12. Why Talent Analytics? Analyst research shows direct correlation to business performance 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 metricsPage 11 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  13. 13. 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 systemsPage 12 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  14. 14. Why Integrate Talent Management? Integrated business processes enable HR transformation Talent Learning Workforce PayrollManagement Management Management Management  Learning development suggestions and assignments based on competency gaps Need Integrated Strategic  Demand driven talent succession, hiring, and HCM Business Processes development plans based on gaps Visibility of critical talent issues, gaps and development plans Need Integrated Visibility and Align workforce strategy with Analytics Across HCM processes business objectives HR TransformationEmployees Contingen Extended t Enterprise Need Integrated Talent management across Organizational Models Integrated processes are mission critical for certain industriesPage 13 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  15. 15. Why Integrate Talent Management? Typical pain points without integrated Talent Management • Alignment and agility to respond to strategic business objectives CEO • Do we have the right talent and systems to support the growth? • How can I get my team to meet it’s numbers? VP of Sales • What are my people risks and mitigation plans? • Lack of visibility into how learning is impacting talent and CLO business • Meet the needs of new multifaceted global organization • Need control to align my teams schedules to spend and demand?VP of Consulting • How do I get schedule based on competencies and certifications ? • Need global view of talent and develop and recruit for talent Head of HR gaps? • Self-service system for business to empower the organization Page 14 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  16. 16. 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” organizationPage 15 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  17. 17. Business Problem ■ Difficult to timely enforce Problem adherence of compliance across divisions Cannot Get Integrated Data for HCM ■ Lack of global view of talent ■ Lack of business alignment GOAL OPERATIONAL ■ Low predictability in SETTING PLANNING MONITOR performance RESULTS ■ Inconsistency in business ANALYZE MODELING decisions PERFORMANCE Manual & ■ Inability to quickly pinpoint Inconsistent leading and lagging parts of the HRMS Succession business ■ Time wasted gathering Recruiting LMS information – cycle time to pull data together ■ Low data quality of data and Perf. Comp. gathered resultsPage 16 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  18. 18. Agenda ■ Challenges Facing HR ■ All About the Numbers ■ Improvements to Top and Bottom Line ■ Tools – What’s Available Today ■ SumTotal ■ DiscussionPage 17 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  19. 19. How to Transform Your HR? Source – Adapted from Bersin & Associates 2010Page 18 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  20. 20. Why Measure Performance? Control & Monitor People Report Externally & Demonstrate Compliance Learn & ImprovePage 19 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  21. 21. 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 20 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  22. 22. Workforce Measurement Strategy ■ Employee Engagement ■ Recruiting ■ Retention ■ Overall HR Costs ■ Manager Satisfaction ■ Compensation and Benefits ■ Employee Relations ■ Training and DevelopmentPage 21 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  23. 23. Key Performance Indicators $ Cost of Turnover $ Cost of Benefits $ Cost of Employee Training % Employee Satisfaction % Employee Motivation % Employee Demographics # Lost Time % AbsenteeismPage 22 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  24. 24. Key Performance Indicators % Turnover % Involuntary Turnover % Voluntary Turnover # Hiring Cycle # Average Length of EmploymentPage 23 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  25. 25. HR Questions Answered Through KPIs Is time-to-fill positions impacting company performance? • % New hire retention • % Vacancies filled internally • # Average open time of positions Do we have sufficient labor to meet next quarter’s demand? • % Average employee tenure • % Talent retention • # Bench strength penetration Does compensation policies for top performers impact retention? • % High performing employees • % Turnover • % Total compensation tied to performancePage 24 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  26. 26. Agenda ■ Challenges Facing HR ■ All About the Numbers ■ Improvements to Top and Bottom Line ■ Tools – What’s Available Today ■ SumTotal ■ DiscussionPage 25 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  27. 27. How do you quantify ROI? Typical “Soft” Measures, what research shows… ■ "A mere 7% of employees today fully understand their companys business strategies and whats 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, 2000Page 26 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  28. 28. “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 BrochurePage 27 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  29. 29. “Soft” ROI Measures Engaged Employees = EPS Growth ■ High employee engagement translates to improvements across the business "Companies that increase employee engagement see improvement in operating margins.“ Towers Perrin, New Realities in Todays Workforce Gallup Research, 2011- Employee Engagement Overview BrochurePage 28 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  30. 30. How do you quantify ROI? Sample Calculations ■ 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)Page 29 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  31. 31. How do you quantify ROI? 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 Assumptions Annual IT FTE Fully-Loaded Cost $ 75,000 Existing Systems Consolidated System 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 Typically calculate based on cost per incident or dedicated support Help Desk Cost $ 37,500 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 $ - Typically calculate based on cost per incident or dedicated support Help Desk Cost $ 18,750 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!Page 30 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  32. 32. How do you quantify ROI? Performance Management Typical factors to consider related to Performance Management: ■ HR Productivity ■ Employee/Manager Productivity ■ Improved Organizational Effectiveness Existing Systems Consolidated System 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 (2) review sessions per year with Roundtable/Ratings Calibration Support $ 6,442 100 hours time per session $ 1,442 25 hours per review session Employee and Manager Productivity 2 hours per manager and 1 hour per 1.5 hours per manager and .75 hour Time spent writing performance reviews $ 399,038 employee $ 299,279 per employee .05% improvement in overall $570M Optimization of compensation budget $ (335,000) comp budget 30 mins per goal (5 goals per 20 minutes per goal (5 goals per Time spent creating/aligning goals $ 161,058 employee) $ 96,635 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 .5% increase in productivity per Improved productivity based on global performance employee. 50% contribution margin, management $ 250,000 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 $ 542,875Page 31 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  33. 33. How do you quantify ROI? Performance Management Systems Integration Category Existing Consolidated System 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 ROIPage 32 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  34. 34. How do you quantify ROI? Other Modules ■ 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 performersPage 33 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  35. 35. 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 34 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  36. 36. Agenda ■ Challenges Facing HR ■ All About the Numbers ■ Improvements to Top and Bottom Line ■ Tools – What’s Available Today ■ About SumTotal ■ DiscussionPage 35 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  37. 37. Levels of Analysis Required Visibility Analysis Strategy Excellence • Pre-built reports • Dashboards • Target and • Management • Self service & • Key benchmarking and operational Configurable Ad- performance • Top & bottom excellence hoc reporting indicators performers • Actionable • Guided (prebuilt & • Proactive intelligence Navigation adhoc) strategy and • Continuous • Alerts • Trend Analysis planning ImprovementPage 36 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  38. 38. Intelligence Through Analytics Now and PastCompetitive Advantages Standard Drill Down Statistical Predictive Reports (Through) Analysis Modeling Ad Hoc Alerts Forecasting Prescriptive Reports Modeling Future Degree of Intelligence Page 37 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  39. 39. 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 IntelligencePage 38 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  40. 40. 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 PlatformPage 39 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  41. 41. Strategic Workforce Analytics ■ Most comprehensive Strategic HCM-Talent Data warehouse ■ 200+ HCM interlinked business objects Talent/ Role Alerts across learning, performance, succession, Custom Based & compensation hiring and career development Dashboards Portal Actions ■ Rationalized data and security across these dimensions and processes ■ Pre-built & Ad-hoc key performance Pre Built Interactive & indicators for most industry needs Key Performance Ad-hoc Indicators (KPIs) Reporting ■ Pre-built role based dashboards and 50+ KPIs most critical to companies ■ Flexible and quick ad-hoc KPIs and reports to enable dynamic analysis Integrated Strategic HCM - Talent Data Warehouse ■ Strategic workforce analysis integrated with external business data Learning Performance Succession ■ Measure the impact of strategic HCM processes based on impact to any business drivers and data like financial, sales, Career Hiring Compensation customer satisfaction Development ■ 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 3rd Party systems - SAP, Oracle, PeopleSoft Legacy & Custom External Flat Files ■ Drive closed loop execution and continuous Data Warehouse Business Data (CSV, XLSX) improvement with integration transactional actions from reportsPage 40 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  42. 42. You cant manage what you dont measure!Page 41 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  43. 43. 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 42 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  44. 44. Agenda ■ Challenges Facing HR ■ All About the Numbers ■ Improvements to Top and Bottom Line ■ Tools – What’s Available Today ■ About SumTotal ■ DiscussionPage 43 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  45. 45. SumTotal Making HR More Strategic Company and Business Executive Right talent strategies to meet my business objectives Enable actionable insight and align Global visibility of Talent workforce strategy with company Pool and Gaps objectives Employee or Contractor Driving Engagement and Retention HR Executive/Manager Making HR more strategic Scale to the needs of globalEnforce compliance across growing organizationemployees, partners, and contractors Information Technology Low TCO; Scalable for global diverse organization Page 44 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  46. 46. About SumTotal Worldwide Leader in Strategic Human Capital Management Solutions SumTotal Worldwide Leader in Strategic HCMMarket Share (users) 3,500+ Customers Over 43+ Million End-Users Leader in SMB, Mid-Market & Enterprise Solutions Global Scalability Page 45 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  47. 47. Agenda ■ Challenges Facing HR ■ All About the Numbers ■ Improvements to Top and Bottom Line ■ Tools – What’s Available Today ■ About SumTotal ■ DiscussionPage 46 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  48. 48. It’s your turn! Ask our expert… Kim Lennon klennon@sumtotalsystems.comPage 47 - April 9, 2012 – PROPRIETARY AND CONFIDENTIAL
  49. 49. Join Our Next TM WebinarThe Evolution of Reference-Checking Into a Strategic Hiring Solution Tuesday, April 17, 2012 • TM Webinars start at 2 p.m. Eastern / 11 a.m. Pacific Register for upcoming TM Webinars at www.talentmgt.com/events Join the Talent Management magazine Network http://network.talentmgt.com/ #TMwebinar

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