If the Great Recession of 2007 has taught us anything, it’s that we must learn to manage our human capital as efficiently and effectively as we manage all of the other parts of our business. Up to this point, we’ve automated and analyzed every aspect of our business except for HR. You know all these acronyms: ERP, JIT, and CRM. But do you know about HCSC (Human Capital Supply Chains) and how they affect your HCFR (Human Capital Financial Reports)?
Tim Giehll introduced the concept of Human Capital Supply Chains in 2009 to define the business processes and technology for planning, hiring, on-boarding and off-boarding a company’s human capital. His presentation explains how Human Capital Supply Chains link business strategy, business performance, strategic workforce planning, staffing, on-boarding and off-boarding for improved corporate financial management and success.
Translating manufacturing and distribution supply chain lessons learned at Toyota, Wal-Mart and Dell to the Human Capital Supply Chain makes perfect business sense.
And evaluating those lessons through new Human Capital Financial Reports is critical.
Through this presentation, industry expert and author Tim Giehll provides a method for companies to calibrate and fine tune their workforce, quickly responding to changing market conditions in small steps rather than in painful mass layoffs or mass rehire campaigns where workforce quality is likely to suffer. He also outlines a 4 Human Capital Financial Report system akin to 4 GAAP Financial Statements knowing that the human capital health of an organization is just as important to investors as its financial health.
As the economy rebounds, companies will all be competing for the same top talent. Firms that have been strategic during the downturn by investing in streamlined processes and best-in-class technologies will be best poised to react quickly and snap up the most qualified talent first – and be able to better manage their global workforce and profits.
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Human Capital Supply Chains and Financial Reports Explained
1. Tim Giehll, CMO Bond-US &
Author of Human Capital Supply Chains and
Human Capital Financial Reports
2. Here’s what you’ll learn in this session:
1. What a Human Capital Supply Chain (HCSC) entails.
2. What Human Capital Financial Reports (HCFR) entail.
3. The benefits a company will experience with HCSC
and HCFR.
3. to review the industry:
The recession of 2008/09 gives reason
• 7 million people laid off
since November 2008
and unemployment is still
at +8%, four years later
• Nearly 14 million people
are still unemployed
• Unemployment jumps to 16% if you include Underemployed
• Most HR Executives still do NOT have a Board Seat
• Some CFOs (Google) are taking over the HR Function
4. 1970s CFO: Financial systems are automated and spreadsheets born.
1980s COO: Manufacturing and Distribution are automated with ERP
systems and new JIT processes.
1990s CSO: Sales is automated with CRM systems, but many
implementations fail due to poor process re-engineering and bad user
interfaces.
2000s CIO: Customer interaction is automated using the internet and
content explodes.
2010s CHRO: Decade that Human Capital Supply Chains and
Financial Reports streamline and automate the flow of workers.
5. 1970s CFO: Financial systems are automated and spreadsheets born.
1980s COO: Manufacturing and Distribution are automated with ERP
systems and new JIT processes.
1990s CSO: Sales is automated with CRM systems, but many
implementations fail due to poor process re-engineering and bad user
interfaces.
2000s CIO: Customer interaction is automated using the internet and
content explodes.
2010s CHRO: Decade that Human Capital Supply Chains and
Financial Reports streamline and automate the flow of workers.
6. 1970s CFO: Financial systems are automated and spreadsheets born.
1980s COO: Manufacturing and Distribution are automated with ERP
systems and new JIT processes.
1990s CSO: Sales is automated with CRM systems, but many
implementations fail due to poor process re-engineering and bad user
interfaces.
2000s CIO: Customer interaction is automated using the internet and
content explodes.
2010s CHRO: Decade that Human Capital Supply Chains and
Financial Reports streamline and automate the flow of workers.
7. 1970s CFO: Financial systems are automated and spreadsheets born.
1980s COO: Manufacturing and Distribution are automated with ERP
systems and new JIT processes.
1990s CSO: Sales is automated with CRM systems, but many
implementations fail due to poor process re-engineering and bad user
interfaces.
2000s CIO: Customer interaction is automated using the internet and
content explodes.
2010s CHRO: Decade that Human Capital Supply Chains and
Financial Reports streamline and automate the flow of workers.
8. 1970s CFO: Financial systems are automated and spreadsheets born.
1980s COO: Manufacturing and Distribution are automated with ERP
systems and new JIT processes.
1990s CSO: Sales is automated with CRM systems, but many
implementations fail due to poor process re-engineering and bad user
interfaces.
2000s CIO: Customer interaction is automated using the internet and
content explodes.
2010s CHRO: Decade that Human Capital Supply Chains and
Financial Reports streamline and automate the flow of workers.
9. • US GDP Forecasted Growth at a SLOW 2-3%
• New Recruiting Complexities as Social Media explodes
• Ongoing Global Mergers and Acquisitions
• Movement to Cloud-based SaaS Solutions
• Demand for Mobile Access 24/7
• Complexities of a Global Workforce
10. • Starting this year, 10,000 baby boomers will turn 65 every day for
the next 19 years. (Source: Pew Research Center)
• In the US, employees eligible for retirement are outnumbering their
teenage counterparts for the first time in 60 years. (Source: Time Magazine 2008)
• By 2018, 63% of all jobs will require some postsecondary education.
The U.S. will fall short by three million workers with postsecondary
degrees. (Source: Georgetown University Center on Education and the Workforce)
• By 2020, the demand for U.S. labor will outstrip supply by almost 18
million people. (Source: ManpowerGroup 2011)
11. • Current HR systems have been built around a steady state
type model – thinking of human resources as “fixed assets“
• This “lifer” model will not work in today's environment
• Need to be able to assess need (demand),
deliver resources quickly (supply) and
accurately view resources in “real time”.
– this assigns resources as a more
variable cost, rather than fixed cost
– providing more flexibility
12. • Create systems to manage HR
with more people coming
in/going out at a faster pace
• Operate with Talent as
inventory vs. a fixed asset
• Optimize Workforce via supply
chain management concepts
• Use Human Capital Financial Reports to measure Success
13. All US Dollars are in BILLIONS
US Non US Global
Temp Help employed via staffing firms 93 381 474
Internal Part-time & Other Temp Help 89 182 271
Independent Contractors (1099) 243 503 746
Consultants 79 93 172
Total Contingent Worker Spending 504 1,159 1,663
$1.7 Trillion Each Year (40 million workers)
(from Staffing Industry Analysts and Kennedy Information)
14. Phase 1: Implement a Human Capital Supply Chain strategy:
• Manage human capital as efficiently and
scientifically as other supply chains
“Think Six Sigma”
• Translate manufacturing and distribution
supply chain Best Practices from companies
like Wal-Mart to human capital
• Streamline, optimize and apply integrated
technology, just like ERP for manufacturing and
CRM for sales
16. Phase 2: Collect & Report the Data
• Work with your HR team to
develop new global Human Capital
Financial Reporting (HCFR)
for their entire Human Capital spending
• Define Human Capital as ALL full-time,
part-time, temps, contractors, consultants
and outsourced workers
•Ask your HR executives to present your Boards with new strategic
initiatives such as Human Capital Supply Chains and Human Capital
Financial Reports
17. • Include all fulltime, part-time, temps, 1099 contractors and
consultants
• Include performance reviews for all
five categories of individuals
• New focus on individual skill
competencies and related experience,
not degrees/titles
• Need the ability for individuals to
move between the five categories
• Track Employees “forever”, like Colleges
18. Help your company see the advantages:
• Finally knowing total spending on all human capital categories
• Understanding Workforce Planning needs in real time
(i.e.: Annual Quarterly Monthly Weekly)
• Being in tune with market dynamics
enables quick Daily adjustments
• The ability to ramp down a
workforce less aggressively or
pick up talent without delay
19. QUOTES:
• “The most common challenge reported by all organizations is lack of
appropriate skills within HR to analyze and interpret data”
(Inform Metrics Utilization Research)
• “Our job is to innovate, innovate, innovate in everything we’re doing”
(Jack Welch, former chariman and CEO GE, 1981-2001)
• “People are our most important asset”
(every CEO on Earth)
• “Very few top executives know the true status and costs of their fluid
workforce, which is similar to not knowing the cost of inventory”
(Jac Fitz-enz, Founder, Saratoga Institute and “father” of HR Metrics)
20. THE TEST:
• # of Full-time employees
• # of Part-time employees
• # of Temporary workers
• # of Contract (1099) workers
• # of Consultants
• # of Outsourced workers
• Total as of 12/31/20XX = ____________
• Did YOU know all 6 numbers ??? Why Not ???
21. HCFR is a new worldwide concept being reviewed by the SEC,
FASB, SHRM, ISO and global investors.
• It is THE Game Changer!
• Assumes that the Human Capital health of a company is just as
important as its Financial Statement health.
• Human Capital Financial Reports can impact a company’s stock price,
valuation and future earnings potential.
• GAAP IFRS HCFR
22. GAAP Features HCFR Features
Industrial economy Knowledge economy
Land, buildings, equipment Talent Management
Local markets Global markets
Long-term employees Short-term, multiple jobs
Primarily full-time employees Blend: FT, PT, temps,
contract, consultants
Obsession with Profits Revenue per Worker
Obsession with Stock Price Workforce Flexibility
24. • 4 GAAP Financial Statements = 4 HCFR Human Capital Financial
Reports
– P&L (Past Period) = R&E (Revenues vs. all Human Capital
Expenses)
– Balance Sheet (Specific Date) = Talent Sheet
(Assets = Talent, Liabilities = Risks)
– Cash Flow (Use of a Resource) = Human Capital Talent Flow
(Changes in Flow of Talent = Fulltime + Contingent + Non-working)
– Financial Ratios (% analysis of the other 3) = Human Capital
Metrics (% analysis of relationships between data)
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29. This is the “window of opportunity” for us to rise up and say:
“We Have A Better Way This Time Around.”
30. Thank You For Your Time
Tim.Giehll@Bond-US.com
(Office) 1-800-456-5660 X4240
www.HumanCapitalFinancialReports.com
www.HumanCapitalSupplyChains.com