Presented by:Loretta P. Dodgen, Ed. D.Malinda B. Lowery, Ed. D.      June 7, 2012                            1
   To familiarize participants with key Human    Capital Metrics and their application   To outline the decision framewo...
   Human Capital drives the strategic vision    and goals of the organization   Is 60% of the operating expense and    c...
   There is a movement from    Human Resources metrics    to Human Capital metrics.   Pressure for financial    performa...
Does your credit union use: a. Human Resources metrics (tactical) b. Human Capital metrics (strategic) c. Both Human Resou...
   Goal is not to have metrics but to obtain    information that will help make better    decisions.   Effective measure...
   Without a standard or benchmark, the metrics    are meaningless no matter what is measured.   Have consistent and imm...
   Human Resource Metrics- looks inward toward    what the HR department is doing (Tactical)    • Turnover Rate    • Aver...
Human Capital Metrics- looks outward to the total credit union (Strategic) •   Operating Income/employee •   Compensation ...
Human Capital ROI       Revenue – (Operating Expenses –       Compensation + Benefits Costs)/       Compensation and Benef...
Profit/Employee    (Revenue – Operating Expenses)/    Number of FTE’s Illustrates the degree of leverage of Human Capital;...
HR Expense Factor    Total HR Expenses/    Total Operating Expenses Illustrates the degree of leverage of Human Capital; p...
Human Capital Value Added    Revenue –    (Operating Expenses-Compensation +    Benefits Costs)/    FTE’s Shows the value ...
Compensation Efficiency Ratio    Operating Income per Employee/    Salaries and Benefits per EmployeeTarget ratio of 2.5 f...
What is your leading challenge in the use andapplication of Human Resources and HumanCapital metrics?a. Selection of metri...
Selecting Metrics   Include both Human Resources and Human    Capital metrics   Differentiate Performance Appraisal and ...
Establishing Benchmarks/Performance Targets   Internal and External view   “It depends.”   Peers   High performers    ...
   32 credit unions   Asset sizes from $222.9 M to $46.9 B   Members from 26,400 to 3.9M   All geographic regions   M...
Performance        2009 Average   2010 Average   2011 Average     Gains   Factors/Ratios        Assets         $1,870,713,...
   Strategic alignment with vision, goals, core    values   Human Capital included in development of    strategic goals...
   Clear “brand”   Support risk, empower, and engage   Fair and competitive compensation   Clear linkage between achie...
For additional Information Contact:Loretta P. Dodgen, Ed. D. ldodgen@hcsgroupusa.comMalinda B. Lowery, Ed. D. mlowery@hcsg...
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How to Measure Your Credit Union Human Resources (Webinar Slides) | Human Capital

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In order to ensure that you are effectively managing and deploying your staff, you need to identify meaningful measures and a clear framework for evaluating success. In this recorded webinar, learn how to successfully evaluate your credit union staff. You will also learn to understand formulas and benchmarks to help evaluate your people management. This recorded webinar is hosted by our expert presenters, co-founders of Human Capital Solutions Group, Loretta Dodgen and Malinda Lowery, with a combined experience of over 40 years in managing human capital. For more info: www.nafcu.org/hcsgroup

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How to Measure Your Credit Union Human Resources (Webinar Slides) | Human Capital

  1. 1. Presented by:Loretta P. Dodgen, Ed. D.Malinda B. Lowery, Ed. D. June 7, 2012 1
  2. 2.  To familiarize participants with key Human Capital Metrics and their application To outline the decision framework for selecting the Human Capital Metrics for your credit union To provide baseline industry performance targets To learn from the leaders 2
  3. 3.  Human Capital drives the strategic vision and goals of the organization Is 60% of the operating expense and consumes 40% of the revenue More than 85% of organizations report that they track HR data and use that data to measure performance and profitability If you can measure it, you can understand it. If you understand it, you can improve it. 3
  4. 4.  There is a movement from Human Resources metrics to Human Capital metrics. Pressure for financial performance drives need to maximize the impact of human capital and align human resource processes with the overall business strategy. Human Capital practices are a lead indicator of good financial performance (Towers Perrin). 4
  5. 5. Does your credit union use: a. Human Resources metrics (tactical) b. Human Capital metrics (strategic) c. Both Human Resources and Human Capital metrics d. Neither 5
  6. 6.  Goal is not to have metrics but to obtain information that will help make better decisions. Effective measurement requires effective tools, technology, and process. Target a manageable number of key metrics. Data is just data. The questions give the meaning and context for interpretation. 6
  7. 7.  Without a standard or benchmark, the metrics are meaningless no matter what is measured. Have consistent and immediate access to internal measures Access good advice/data 7
  8. 8.  Human Resource Metrics- looks inward toward what the HR department is doing (Tactical) • Turnover Rate • Average time to fill positions • FTE to HR Staff • Members to FTE • Benefits as % of Compensation increase 8
  9. 9. Human Capital Metrics- looks outward to the total credit union (Strategic) • Operating Income/employee • Compensation Costs/employee • Human Capital Efficiency Ratio • Human Capital ROI • Total Realized Value 9
  10. 10. Human Capital ROI Revenue – (Operating Expenses – Compensation + Benefits Costs)/ Compensation and Benefits Costs or Net Income/ Compensation and Benefits Costs (.65 target) Represents pre-tax profit for amounts invested in employee pay and benefits after removal of capital expenses 10
  11. 11. Profit/Employee (Revenue – Operating Expenses)/ Number of FTE’s Illustrates the degree of leverage of Human Capital; provides a benchmark for overall expense analysis relative to targets or budgets 11
  12. 12. HR Expense Factor Total HR Expenses/ Total Operating Expenses Illustrates the degree of leverage of Human Capital; provides a benchmark for overall expense analysis relative to targets or budgets 12
  13. 13. Human Capital Value Added Revenue – (Operating Expenses-Compensation + Benefits Costs)/ FTE’s Shows the value of employee knowledge, skills and performance and how Human Capital adds value to the organization 13
  14. 14. Compensation Efficiency Ratio Operating Income per Employee/ Salaries and Benefits per EmployeeTarget ratio of 2.5 for high performing creditunions shows how efficient the investment isbeing managed. 14
  15. 15. What is your leading challenge in the use andapplication of Human Resources and HumanCapital metrics?a. Selection of metrics to useb. Collection and interpretation of datac. Setting performance targets and benchmarksd. Consistent use and implementatione. Management engagement 15
  16. 16. Selecting Metrics Include both Human Resources and Human Capital metrics Differentiate Performance Appraisal and Performance Management Link to the credit union’s overall strategy, objectives, and core values 16
  17. 17. Establishing Benchmarks/Performance Targets Internal and External view “It depends.” Peers High performers 17
  18. 18.  32 credit unions Asset sizes from $222.9 M to $46.9 B Members from 26,400 to 3.9M All geographic regions Multiple sources and factors: financial performance, services and products, growth ratios ◦ www.findthebest.com ◦ NCUA ◦ Raddon Group ◦ Filene Institute 18
  19. 19. Performance 2009 Average 2010 Average 2011 Average Gains Factors/Ratios Assets $1,870,713,615 $3,299,862,460 $3,580,557,923 91%ROAA Pre-stabilization 0.56 0.70 0.88 57% Operating Income $93,648,158 $124,360,750 $144,360,569 54%Op Income/Employee $157,144 $193,210 $214,473 37% Net Income Pre- $24,562,524 $36,265,738 $43,791,027 78% stabilization FTE 596 644 673 13% Members 271,737 282,674 297,590 10% Members to FTE 379 380 383 1% Salaries and Benefits $40,623,491 $42,617,285 $47,735,683 18% Salaries and $61,139 $61,172 $63,496 4% Benefits/EmployeeComp Efficiency Ratio 2.23 2.62 2.74 20%ROI in Human Capital 53% 61% 74% 41% 19
  20. 20.  Strategic alignment with vision, goals, core values Human Capital included in development of strategic goals Target and track human capital metrics Consistent and transparent feedback and all employee celebration of progress toward goals 20
  21. 21.  Clear “brand” Support risk, empower, and engage Fair and competitive compensation Clear linkage between achievement and rewards and recognition Accountability to the team Training and employee development to grow talent and bench strength 21
  22. 22. For additional Information Contact:Loretta P. Dodgen, Ed. D. ldodgen@hcsgroupusa.comMalinda B. Lowery, Ed. D. mlowery@hcsgroupusa.comwww.nafcu.org/HCSGroup2815 Coliseum Centre DriveSuite 220Charlotte, NC 28217704-716-3451Visit us at the NAFCU Annual Conference in Nashville, TN Booth #3 22

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