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GESNA - Human Capital Insights Magazine - Volume 5
1. Maximizing Performance, Productivity, and Profitability
1
A more human resource.
SM
®
ROI
for Your Organization’s
Wallet & Heart:
Three Game-Changing HCM Strategies
In This Issue:
Flexible Work
Arrangements:
Optimizing Your
Workforce Productivity
& Retention
Five Eco-Friendly
Strategies
for Global
Organizations
Data Security
Checkup: Protecting
Employee Health
Information
ADP Human Capital Volume 5
2. 2 ADP Human Capital Insights®
People
Flexible Work Arrangements:
Optimizing Your Workforce
Productivity & Retention
Flexible work arrangements (FWAs) are
gaining ground as a way to optimize
scheduling. Here’s what you need to know to
make them work for your organization.
Employee Happiness: The Link Between
Positivity & Productivity
Leaders know that an unhappy workforce
affects a company’s overall performance, so
they’re building strategies to increase the
good vibes. Find out how large enterprises
are prioritizing happiness.
Using Social Media to Prescreen:
Is it Lawful?
Although it’s common to screen the social
media presence of potential employees
during the hiring process, many states and
countries have legislation addressing this
practice. Are you on the right side of the law?
Trends
Five Eco-Friendly Strategies for
Global Organizations
As global climate change tops the minds of
many, eco-friendly organizations use their
positions to shape public perception. Learn
how eco-consciousness differs from one
company to the next around the globe.
The New Way We’ll Work
From technology to philanthropy, new
research reveals how employers should
think about and prepare for the workplace
of the future.
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7
10
13
16
18
21
24
27
Contents
Change
ROI for Your Organization’s Wallet
& Heart: Three Game-Changing
HCM Strategies
HCM is gaining importance and making its
way to the forefront of business strategy. Here
are three strategies that can facilitate change.
Prepping for Expansion:
Tools to Know Before You Grow
Expansion can affect how top managers run
their teams, carry out processes and use
technology. Find out key areas of focus that
support expansion now and in the future.
Risk
Data Security Checkup: Protecting
Employee Health Information
When company-supported wellness programs
don’t keep employee information secure,
large businesses face big consequences.
Learn five best practices to ensure
confidentiality.
Real Stories, Real Impact
Learn how two organizations are driving
business impact with a strategic approach
to HCM.
For more articles and insights
that can help you ignite the
power of your workforce, visit
our blog for large business
leaders at adp.com/spark
4
4. 4 ADP Human Capital Insights®
People
Flexible Work Arrangements:
Optimizing Your Workforce
Productivity Retention
Scheduling optimization can take many forms: telecommuting,
compressed workweeks and flextime, for example. At its most base
level, it allows employees to perform work duties outside of work, and
technological improvements have made those options available to a larger
segment of the workforce. Some arrangements, however, have yet to
garner widespread acceptance in many organizations’ current cultures.
5. 5
But research by the Society for Human
Resource Management1
(SHRM) shows that
participation in some type of optimization
has risen in recent years and yielded positive
results for employee recruitment, retention,
development and productivity.
The Importance of FWAs
According to the SHRM 2015 “Employee
Job Satisfaction and Engagement Report,”2
scheduling optimization options, or flexible
work arrangements (FWAs), are important to
employees and affects their willingness to
stick around. Fifty-five percent of employee
respondents, for example, noted work-life
balance flexibility as a “very important aspect
of their job satisfaction.”
FWAs are also vital for retention according
to SHRM’s 2015 HR Jobs Pulse Survey,3
in
which 38 percent of respondents indicated
they continue at their current enterprise
because of the “flexibility to balance work and
life issues.”
Without FWAs, an enterprise could put itself
at risk of understaffed shifts which, according
to the latest “U.K. Health and Safety Enterprise
Report”4
on staffing levels, can lead to:
• Safety-critical tasks going uncompleted,
or completed later than they should
have been
• Maintenance becoming backlogged
• Increases in overtime
• Increase in complaints and absences
related to stress, fatigue and other ill health
• Turnover due to high workload, stress
and fatigue
• Bottlenecked communications
• Customer complaints and increased
delivery times
Trending Up
In the SHRM 2015 “Employee Benefits Report,”5
more than half of employers surveyed said they
now offer the following FWAs: telecommuting (60
percent), telecommuting on an ad hoc basis (56
percent), flextime (54 percent) and flextime during core
business hours (52 percent). Other common options
include compressed workweeks (31 percent), full-time
telecommuting (22 percent) and shift flexibility (21
percent), all in an effort to appease employees while
keeping shifts at full strength.
Employers’ participation in some options has
substantially increased over the past five years,
according to the report. Fifty-six percent, for example,
offered ad hoc telecommuting in 2015, up 14 percent
from 2011.
1
SHRM Research: Flexible Work Arrangements, Society for Human Resource Management, 2015.
2
Employee Job Satisfaction and Engagement, Society for Human Resource Management, 2015.
3
HR Jobs Post Survey Report, Society for Human Resource Management, Summer 2015.
4
U.K. Health and Safety Enterprise Report, 2015.
5
Employee Benefits, Society for Human Resource Management, 2015.
38% of
respondents
continue at their
current enterprise
because of the
“flexibility to
balance work
and life issues.”
6. 6 ADP Human Capital Insights®
Looking Forward
Over the next few years, many HR professionals
(89 percent) believe flexible scheduling and
telecommuting options will increase in some way,
according to the SHRM 2014 “Workplace Flexibility:
Overview of Flexible Work Arrangements Survey.”6
The survey also shows that 83 percent believe
telecommuting, in particular, has improved certain
aspects of organizations’ operations and will be more
commonplace overall.
Similarly, the survey revealed that “one-quarter (26%)
reported the productivity of employees who previously
worked 100% on-site had increased, and one-third
(32%) reported absenteeism rates had decreased.”
FWA Success and Effects
In the 2014 survey, HR professionals were asked
to comment on the success of FWAs. Ninety-
one percent said a compressed workweek “has
had some degree of success” (61 percent said
“very successful” and 30 percent said “somewhat
successful”). In addition, more than 50 percent
of the respondents also believed that FWAs
“had a positive effect on various business
operations, including recruitment and retention,
employee excellence, and organizational
success.” Most critically, support or buy-in from
top management, employee commitment and
“a supportive organizational culture” determine
scheduling optimization success.
Another benefit of FWAs comes in recruiting
various demographics. Thirty-seven percent
of the survey respondents of SHRM’s “Aging
Workforce: Recruitment and Retention Survey”7
cited using “flexible scheduling as a means
of attracting older workers,” and 97 percent
said flexible scheduling has been effective for
recruitment and retention of older workers (63
percent said “very effective”).
Millennials are another demographic that
appreciates FWAs. They “have shown an
increased preference for having greater control
over their own schedules, and many place
greater emphasis on organizational culture,
rather than on compensation-related aspects
of a job,” according to SHRM’s 2015 “Strategic
Benefits Survey: Leveraging Benefits to Recruit
Employees.”8
If you’re struggling to show positive results
in recruitment and retention of a diverse
population, while raising overall productivity,
flexible work arrangements might be a key to
help unlock the full potential of your workforce.
6
Workplace Flexibility Survey, Society for Human Resource Management, 2014.
7
The Aging Workforce — Recruitment and Retention, Society for Human Resource Management, January 2015.
8
Strategic Benefits — Leveraging Benefits to Retain Employees, Society for Human Resource Management, 2015.
83% believe
telecommuting,
in particular,
has improved
certain aspects
of organizations’
operations.
7. 7
Employee Happiness:
The Link Between
Positivity Productivity
Is your workforce happy? Does it really matter? The answer to both questions
is definitely yes. According to a 2014 study on employee happiness by the
University of Warwick,1
emotionally healthy and supported employees are
more productive. Happy employees are 12 percent more productive than
the average worker, and unhappy employees are 10 percent less productive.
1
Happiness and Productivity, University of Warwick, February 2014.
8. 8 ADP Human Capital Insights®
How Much Does Unhappiness Cost?
Lost productivity, due to the poor state of
employee happiness, costs American enterprises
billions of dollars: 300 billion, to be exact,
according to the Gallup-Healthways Well-Being
Index.2
That study details how increasingly
unhappy people are with their jobs, managers,
coworkers, and work environments. It also reveals
that employee unhappiness results in absenteeism,
presenteeism (at work, but mentally elsewhere),
lower productivity, and lower-quality work.
What Should Your Enterprise Do?
Take a page or two from Intuitive Research and
Technology Corporation’s (IRT) playbook. They have
been named, for the second year running, the number
one place to work for midsized organizations by Great
Place to Work.
IRT, which provides engineering and analytical
services, focuses on five main areas:
Bonus and
Profitsharing
The bonus and profit-sharing program
is special, because it’s robust. It includes
significant OTS (On-the-Spot) bonuses
throughout the year, along with an
organization-wide bonus in November that’s
based first on organization-level performance,
then group, then individual. IRT also shares
profits with everyone in March, and the cash
goes into 401(k) accounts.
Certification
Boot Camps
To promote employees’ professional
development, IRT provides “boot camps”
in-house to assist employees who need to
prepare for specific certification courses,
e.g., Certified Systems Engineer Professional
(CESP). The organization brings in instructors,
provides materials, and also pays for the exam
(once passed).
Productivity loss isn’t the only place where
employers are feeling the pinch of unhappiness.
They’re also feeling it in the form of turnover.
When you lose employees, you lose revenue. The
cost of that, according to the Society for Human
Resource Management (SHRM),3
can be as high
as 100 to 300 percent of the recently departed
employees’ base salary.
2
1
9. 9
What’s a CHRO to Do?
As you help your enterprise find ways to create
a happier work environment, HR can support
the process by paying closer attention to the
screening process to ensure new hires fit into the
culture. A Globoforce4
“work mood tracker” report
adds that it’s important to also ensure employees
feel appreciated. Sixty-nine percent of employees,
according to the survey, say they will work harder
when they feel recognized for their achievements,
no matter how small.
Savvy CHROs also help employers attend
to employees personal needs. A Net Impact-
Rutgers University5
study shows that 88 percent
of employee believe it’s not just important, but
crucial, to have a healthy work-life balance along
with a positive atmosphere in the workplace.
A big part of that balance doesn’t cost a
dime: It can be as simple as fostering workplace
friendships. A Jobsite UK6
study shows that 70
percent of participants say cultivating friendships
while at work creates a positive influence on both
their productivity and happiness.
Finally, CHROs should help managers and
supervisors understand the importance of focusing
on their employees’ individual strengths. This,
ultimately, could double the number of happy
employees, according to research from Gallup.7
The Bottom Line
Statistics have plenty to say about employee
happiness and its affect on productivity and
the bottom line. That’s why clever HR leaders
pay more attention to the concept of creating
a workplace climate conducive to overall
satisfaction, not just job satisfaction. Yes,
implementing changes may cost more in time and
money, but if research results are to be believed,
the payoff is invaluable — in employee retention,
productivity, and earnings.
2
Healthways Well-being Index, Gallup, 2015.
3
Measuring and Mitigating the Cost of Employee Turnover, Society for Human Resource Management, July 2012.
4
Workforce Mood Tracker Report, Globoforce, September 2011.
5
Talent Report: What Workers Want in 2012, Net Impact and Rutgers University, 2012.
6
Jobsite UK, 2012.
7
State of the American Workplace Report, Gallup, 2012.
CARE Day
For the quarterly CARE Day program,
IRT brings in a clinician, physical therapist,
nutritionist, health food store representative,
and massage therapist. IRT pays for
treatments, tests and consultations, and
blood work and other test results are sent to
employees’ homes.
VIP Leave
The Veterans Information Program
(VIP) Leave is a special program to assist
veterans prior-to-hire, post-hire, and
throughout the year through Lunch ‘n’ Learn
programs on veteran-related topics. VIP
Leave provides up to three days off each year,
with pay, for VA hospital visits and mid-tour
return visits for active-duty spouses.
Benefits
Allowance
IRT provides a general annual allowance to
full-time employees to help pay for voluntary
benefits. If the allowance is not used for
benefits, it becomes additional income.
3
4
5
10. 10 ADP Human Capital Insights®
Using Social Media
to Prescreen: Is it Lawful?
According to the Society for Human Resource Management (SHRM)–
Ascendo Resources survey1
published in September 2015, 65 percent
of organizations actively searched and made new hires using social
media in the past year. More than half (57 percent) found people through
LinkedIn. Thirty percent hired people found on professional or social
networking sites (SNSs), and 19 percent made hires from Facebook.
11. 11
Laying Down the Law
What is the current state of
legislation on prescreening
employees? Well, it isn’t unlawful
to find and vet candidates using
social media. But how and when
you obtain information, as well
as how you use it, can pose
problems. Why? Bias can slip into
decision-making when trying to
make decisions on screening,
interviewing and then hiring.
There are avenues of guidance
that give employers a road map
for what they can and cannot do.
Outside of the courts, information
comes from the Equal Employment
Opportunity Commission (EEOC)
and the National Labor Relations
Board (NLRB) cases due to alleged
social media abuse.
65%of organizations
actively searched for and
made new hires using social
media in the past year.
Employers get into trouble
when they access social media
too early in the process. Social
media accounts have profile
pictures that can reveal what
the EEOC deems “protected
characteristics,” such as gender
and race. Online profiles and
posts may reveal even more
protected characteristics such
as gender identity, sexual
orientation, religion or disability.
Sometimes, you can even learn
of home life issues that affect
a person’s ability to be on
time. If you obtain this type of
information prior to a face-to-face
interview, ensure you design your
interview questions and keep
your decision-making strictly
within legal interview limits.2
Taking it to Court
Today, the courts are paying
attention to the use of social
media in prescreening
employees. The Neiman v.
Grange Mutual Insurance Co.
(GMIC) case is a current example
of a violation of the Age
Discrimination in Employment
Act (ADEA).3
In that case, a U.S.
District Court denied GMIC’s
motion to dismiss the plaintiff’s
age discrimination claim. The
employer argued that the
plaintiff’s age was unknown
because the interview was
conducted over the phone. The
plaintiff alleged the defendant
knew his age because, on his
LinkedIn profile, he clearly stated
he graduated from college
in 1989. The court found the
allegation sufficient to place
GMIC on notice that Neiman
belonged to a protected class
because a reasonable person
would assume someone who
graduated college in 1989 was
over the age of 40.
1
The Importance of Social Media for Recruiters and Job Seekers, Society for Human Resource Management, September 2015.
2
Keep the Interview Legal, Monster.com, 2015.
3
Neiman v. Grange Mutual Insurance, 2013.
Organizations must tread lightly when using social media to screen
potential candidates. Legislation on prescreening employees is in its
infancy when it comes to social media. Viewing a candidate’s social
media profiles, especially before you meet the candidate in person, could
subject your organization to a discrimination lawsuit. Below is a guide to
help navigate the choppy waters of social media screening.
12. 12 ADP Human Capital Insights®
Passwords and
Privacy
As LinkedIn, Facebook,
Twitter and other networks
have become more popular,
some employers have tried
to use social media to gain
personal information on both
candidates and employees.
This would be information
to which they would not
ordinarily have access.
Employers have gone so far
as to ask, and sometimes
require, passwords to gain
full access to personal sites.
As of July 2015, 22 states,5
in response to the potential
privacy issues and risks, passed
laws banning such practices.
As a result, employers may
no longer request or require
passwords. They must instead
obtain personal information
at the appropriate intervals
in the employment process.
To stay ahead of the law,
it’s critical for employers,
especially those doing
business in multiple
jurisdictions, to stay up to
date on all the developments
in this area because
intricacies in the law change
federally and by state.
What’s Happening
Overseas?
In contrast, in other parts
of the world, according
to a recent U.S. social
recruiting study done
by Jobvite,6
”European
employers are lagging
American organizations in
terms of adopting social
recruiting and hiring.”
StepStone,7
one of
Europe’s most successful
online job boards, recently
published its “Recruitment
via Social Media: Fact or
Hype?” study on recruiting
and hiring practices in
Europe. In the study, they
quote another study by
TNS that said the volume
of candidates generated
by SNSs is lower than
other channels, and only
24 percent of organizations
surveyed are happy with the
candidate volume from SNSs.
It’s clear that social media’s
influence on recruiting will
increase as its use continues
to rise. While a valuable
tool, it’s imperative that
your organization dedicates
a watchdog with social
media expertise, but doesn’t
make hiring decisions, who will
keep their finger on the pulse of
changing regulations and guide
your organization as these laws
change over time.
The volume
of European
candidates
generated by SNSs
is lower than other
channels, and
only 24% of
organizations
surveyed
are happy
with the candidate
volume from SNSs.
5
State Laws Ban Access to Workers’ Social Media Accounts, Society for Human Resource Management, 2015.
6
How Social Media is Used for Recruiting in 2013, Link Humans, 2013.
7
Recruitment vs. Social Media: Fact or Hype?, StepStone, 2013.
13. 13
Five
Eco-Friendly
Strategies
for Global
Organizations
Following the Conference of Parties (COP21)1
meeting of the United Nations
Framework Convention on Climate Change in December 2015, 195 nations
agreed to a historic deal to reduce greenhouse gas emissions. According to
The New York Times,2
“the core of the Paris deal is a requirement that every
nation take part” by developing a plan to reduce emissions and publicly
report on the results every five years. Are eco-friendly strategies for global
organizations something you need to worry about? Although the COP21
Accord is binding only for participating nation states, global organizations can
lead by example in adopting the same guidelines and forging new, greener
paths. HR leadership can and should be at the forefront of these initiatives.
Trends
1
Conference of Parties, United Nations Framework Convention of Climate Change, December 2015.
2
Nations Approve Landmark Climate Accord in Paris, The New York Times, December 2015.
14. 14 ADP Human Capital Insights®
Here are five eco-friendly strategies for global organizations to get your business headed in
the right direction:
Be an Early Adopter
The first action global organizations
can take is to publicly and voluntarily agree to
the terms of the Paris Accord, which includes
developing a plan and publicly reporting on results
of environmental initiatives.
Newsweek3
publishes an annual Green
Companies List ranking the largest global
enterprises’ environmental impact, and it’s possible
your organization is already making voluntary
disclosures for this list. If not, the simplest way to
get your organization’s hat into the ring is to make
a firm commitment to be more eco-friendly, using
the framework of the Paris Accord.
Reduce Employees’
Carbon Footprints
Increasing commuting hours are
contributing to both greenhouse gas
emissions and employee stress, according
to an article in The Atlantic.4
So one
specific, eco-friendly strategy for global
organizations is to promote the reduction
of employee commuting. Not every global
enterprise can have a fleet of commuter
buses driving thousands of employees
to and from work every day, a la Google,
Facebook, Yahoo!, Cisco, Box and other
Silicon Valley organizations. However, new
services, such as RidePal, are popping up
so organizations can share in the benefits
of busing employees without the need to
arrange their own transportation systems.
Uber also now offers a service to encourage
carpooling to work, according to the
Verge.5
Not only can organizations promote
public transportation by offering employees
annual bus, subway, and train passes, but
you can also offer Uber credits to promote
more carpooling.
As more corporations move to
centralized, downtown office spaces, and
more employees move to the suburbs,
global organizations could help reduce
commuting by offering more flexible
work-at-home arrangements or opening
suburban satellite office space.
As more corporations
move to centralized,
downtown office spaces,
and more employees move
to the suburbs, global
organizations could help
reduce commuting by
offering more flexible work-
at-home arrangements or
opening suburban satellite
office space.
3
Green Rankings, Newsweek, 2015.
4
Yes, Rush-Hour Traffic is Getting Worse, The Atlantic, August 2015.
5
Uber Launches Uber Commute, A Carpooling Service Starting in China, The Verge, September 2015.
1. 2.
15. 15
A New Way
for Executive Pay
As an incentive for leaders of global
organizations to develop eco-friendly
strategies, executive compensation plans
could be linked in part to these goals.
According to Newsweek,6
53 percent of the
largest organizations in the United States —
and 69 percent globally — have already
“linked at least part of their executive bonus
payout to green factors like energy use and
greenhouse emissions.”
Thinking Globally
Starts Locally
As an extension of your efforts to change the culture of
your organization from within, there is also a wonderful
opportunity to promote and support your employees’
work to better their own community. For instance, back
in 2009 Wal-Mart launched a “Personal Sustainability
Project,”7
which helps employees “make and keep
commitments to their planet and to their health”
through environmentally friendly activities such as biking
to work, conserving water or otherwise finding new and
different ways to conserve energy in their everyday lives.
A Green Takeover
Making the world around your
organization a better place can go beyond one
initiative and become a core element of your
corporation’s overall culture. Consider IBM’s
“Smarter Planet”8
campaign. It is a marketing
campaign, of course, but also a business
strategy and a global environmental initiative
all rolled into one. IBM employees rally
around this concept of a “Smarter Planet,”
and prospective employees and clients see an
organization that values projects and products
that actually create a smarter, safer planet.
CHROs who push to incorporate eco-friendly strategies into the fabric of their organization will find that these
ideals not only have a positive impact on the environment, but also offer a fantastic return on investment.
6
Corporations are Going Green by Linking Executive Pay to Energy and Emissions Targets, Newsweek, June 2015.
7
Energize Employees with Green Strategies, Harvard Business Review, September 2009.
8
World’s Greenest Companies and What We Can Learn from Them, Environmental Leader, July 2013.
3.
5.
4.
16. The New Way We’ll Work
ADP Research Institute’s Evolution Of Work Study Sheds Light on
How Employers Should Think about the Future Workplace
45% surveyed fear that automation, smart machines and
artificial intelligence will replace people for repetitive work.
92% of those surveyed believe technology will
allow for deeper connections across distance
and time.
While most workplace changes are perceived positively, there
is fear that automation and smart machines will replace work
being done by humans.
Openness to workplace changes varies by region.
92
45
The New Way We’ll Work
ADP Research Institute’s Evolution Of Work Study Sheds Light on
How Employers Should Think about the Future Workplace
45% surveyed fear that automation, smart machines and
artificial intelligence will replace people for repetitive work.
92% of those surveyed believe technology will
allow for deeper connections across distance
and time.
While most workplace changes are perceived positively, there
is fear that automation and smart machines will replace work
being done by humans.
Openness to workplace changes varies by region.
92
45
16 ADP Human Capital Insights®
The New Way We’ll Work
ADP Research Institute’s Evolution of Work Study sheds light on how
employers should think about the future workplace. We surveyed over
2000 employees and employers across the globe to understand the
human-centric needs that are changing the way we work.
92% of those surveyed believe
technology will allow for deeper
connections across distance and time.
45% surveyed fear that automation,
smart machines and artificial intelligence
will replace people for repetitive work.
45% surveyed fear that automation, smart machines and
artificial intelligence will replace people for repetitive work.
In Asia Pacific, 81% of people
surveyed are excited about the
future and embracing change.
Europeans remain wa
workplace shifts as on
respondents feel op
92% of those surveyed believe technology will
allow for deeper connections across distance
and time.
Openness to workplace changes varies by region.
The modern definition of job security requires
employees to adapt to different roles.
45
58
The New Way We’ll Work
ADP Research Institute’s Evolution Of Work Study Sheds Light on
How Employers Should Think about the Future Workplace
45% surveyed fear that automation, smart machines and
artificial intelligence will replace people for repetitive work.
In Asia Pacific, 81% of people
surveyed are excited about the
future and embracing change.
Europeans remain wary about
workplace shifts as only 59% of
respondents feel optimistic.
92% of those surveyed believe technology will
allow for deeper connections across distance
and time.
While most workplace changes are perceived positively, there
is fear that automation and smart machines will replace work
being done by humans.
Openness to workplace changes varies by region.
The modern definition of job security requires
employees to adapt to different roles.
92
45
The New Way We’ll Work
ADP Research Institute’s Evolution Of Work Study Sheds Light on
How Employers Should Think about the Future Workplace
45% surveyed fear that automation, smart machines and
artificial intelligence will replace people for repetitive work.
92% of those surveyed believe technology will
allow for deeper connections across distance
and time.
While most workplace changes are perceived positively, there
is fear that automation and smart machines will replace work
being done by humans.
Openness to workplace changes varies by region.
92
45 Europeans
remain
wary about
workplace
shifts as only 59%
of respondents
feel optimistic.
Openness to workplace
changes varies by region.
While most workplace changes are
perceived positively, there is fear that
automation and smart machines will
replace work being done by humans.
In Asia Pacific, 81%
of people surveyed
are excited about
the future and
embracing change.
18. 18 ADP Human Capital Insights®
ROI for Your Organization’s
Wallet Heart:
Change
As government regulations grow, CEOs are relying even more on their
HR leaders to unlock the benefits of their Human Capital Management
(HCM) solution to inform business strategies. In fact, according to the
Harvard Business Review,1
71 percent of CEOs view human capital as
the top factor contributing to sustainable economic value.
1
The Big Data Opportunity for HR and Finance, Harvard Business Review, 2013.
Three Game-Changing HCM Strategies
19. 19
Economist Gary Becker2
describes human capital
as the “knowledge, information, ideas, skills, and
health of individuals.” If the C-suite believes human
capital is the component that contributes most to
sustainable value and growth, then CHROs must
be ready to execute Human Capital Management
business strategies to help their organization
develop. In other words, CHROs need innovative
approaches to investments in education, training
and health.
Here are innovative HCM ideas that can improve
employee and organizational performance.
Implement a Data-Driven
Approach
CHROs must change the HR culture
and get the right tools in place
so they can measure the results
of human capital investment. In
a world of big data and cloud
computing, the list of excuses for
not having the means to measure
human capital’s contribution to
organizational results is shrinking
rapidly. The CHRO cannot have
a seat at the table in the C-suite
without the ability to report
business results directly tied to
investing in human capital.
Educated Employees
Drive Economic Value
The American Society for Training
Development (ASTD) has been
collecting data on employee
training and development for many
years. A joint study with HR.com3
was done to find out if there’s
a link between the investment
made in employee training and
organizational value measures
(defined by stock performance,
income per employee, gross profit
margin and market value per
employee). According to the study,
almost all financial measures are
higher for those organizations that
spend an “above average amount”
on training per employee. Not only
that, the training investment is the
single most important statistical
predictor of total stockholder return
for the following year.
2
The Age of Human Capital, Gary S. Becker, 1993.
3
Investing in Companies that Invest in People, HR.com, February 2002.
20. One example of an organization
showing a financial result is the
Cheesecake Factory. It invests
$2,000 per year per employee on
training and its sales per square
foot (a top metric used to measure
retail performance) is almost
double the industry average, per
SkilledUp.4
Training may not be considered
an innovative approach to
improving business results, but
linking an investment in training
to a financial result is a strategic
approach more CHROs must take.
Investing in Health:
Good for Employees and
Your Organization
In addition to education and
training, investing in health is a
major factor of human capital
effectiveness. Anecdotally, it’s
easy to understand that people
who are healthy, in the broadest
sense, will generally be happier,
more satisfied with their work, and
more productive. But there’s also
evidence to support this.
As reported in the Harvard
Business Review,5
Towers Watson
and the National Business Group
on Health conducted a study
that showed organizations with
wellness programs reported
“lower voluntary attrition.” SAS,
the analytics, business intelligence
and data management software
firm, attributes much of its four
percent voluntary attrition rate to its
wellness program. Employee health
programs can save organizations
big money as well. Johnson
Johnson estimates that its wellness
initiative has saved the organization
$250 million on health care costs
over the past decade.
Another innovative way CHROs
can improve employee wellness
is to incentivize movement. For
example, Target now offers FitBits®
to all 335,000 employees, according
to an article in Bloomberg
Business.6
At a cost of $59.95
for each FitBit (plus the cost of
the service), Target is making a
huge investment in trying to help
employees be healthier. However,
according to Target, “the cost of
a FitBit device and the associated
services is very small compared
to the savings from a healthier
employee population.”
Your organization can take a
cue from these innovators and see
a sharp ROI from a data-driven
approach to investing in human
capital, as long as you also go
the extra mile to ensure you have
the tools in place to measure and
report the results.
Another innovative way CHROs
can improve employee wellness
is to incentivize movement.
For example,
Target now
offers FitBits
to all 335,000
employees,
according to
an article in
Bloomberg
Business.
4
How Top Companies Make the ROI Case for Employee Training, Skilledup, December 2014.
5
What’s the Hard Return on Employee Wellness Programs?, Harvard Business Review, December 2010.
6
Target Offers Fitbits to 335,000 Employees, Bloomberg Business, September 2015.
20 ADP Human Capital Insights®
21. 21
Prepping for
Expansion:
Tools to
Know Before
You Grow
During times of transition,
HR should be a key strategic
player. Tools, such as automated
technology and Big Data can
help your HR team maximize
its energy and keep the focus
on optimizing Human Capital
Management (HCM) practices for
your organization’s future.
As an enterprise leader, you know
that human resources and business
growth must work in tandem.
Attracting and retaining talent while
developing your existing workforce’s
skills will be top priorities for any
growing enterprise. For HR leaders,
staying abreast of upcoming changes
no longer means simply hiring
new talent and preparing current
employees for expansion. It also
means spearheading the adoption
of tools and practices that will better
support your enterprise’s growth.
Big
Data
Benchmarking
Automation
Training and
Development
22. 22 ADP Human Capital Insights®
Automation: Enabling
Strategic Focus
Even if your business is not
looking to expand globally,
there’s a strong chance that
other organizations outside
your home country are looking
to expand internationally
into your market, unleashing
a variety of disruptive
competitive forces. To compete
effectively, your HR team will
need to shift focus toward
employment branding efforts,
compensation structures,
leadership development,
succession planning, and skills
enhancement to continue to
hire and retain the best people.
In order to free your team
from transactional burdens and
enable them to work on these
strategic areas, it may be wise
to invest in more automated
solutions. According to an
ADP study,1
Harnessing Big
Data: The Human Capital
Management Journey to
Achieving Business Growth, the
average large organization has
33 payroll systems and 31 HR
systems. Taxing your team with
manually keying in and moving
data across these disconnected
systems, or other tasks that a
computer could do just as well,
is not efficient and not likely
to build employee loyalty and
engagement. You have built a
solid team, so use their energy
and skills where they count.
Big Data:
Optimizing Insights
Using insights gleaned from Big
Data has become increasingly
important for HR leaders.
The same ADP study advised
that “strengthening the data
infrastructure is clearly a critical
first component” in growing
organizations. Big Data helps
uncover trends and insights into
your workforce, which can then
be used to optimize the efficiency
1
Harnessing Big Data: The Human Capital Management Journey to Achieving Business Growth, The ADP Research Institute, 2015.
2
Why You Need to Embrace the Big Data Trend in HR, Entrepreneur, April 2015.
of both new and old practices to
support business growth.
As an article in Entrepreneur2
explained, HR leaders can use
big data analytics in four key
areas: performance management,
retention, training, and hiring to
enable and support a workforce
that can deliver real business
impact. Xerox, for example used
insights from Big Data analytics to
cut attrition rates in its call center by
20 percent.
The average
large organization has
33 payroll systems
and 31 HR systems
23. 23
3
Using Big Data Smartly, ADP Blog, 2015.
4
Age and Retirement Benchmarks: Key Analytics that Drive Human Capital Management, ADP Research Institute, 2013.
5
Preparing Your Organization for Growth, McKinsey Company, May 2011.
The Takeaway
Today’s HR leaders play a strategic role in successful business growth that comes directly from maintaining
and grooming talent. Automation frees up valuable HR resources for more strategic activities, and activating
Big Data provides critical insights that will drive retention and inform your decision-making. Utilizing these
tools will give you a host of advantages as your organization expands, allowing for human resources to play
a key role in developing a workforce that will support continued business growth and success.
Contemporary
Benchmarking
Big Data is also a great tool for
benchmarking compensation3
in a specific role or industry,
helping you identify flight
risks proactively, thus driving
retention. Benchmarking
age and retirement with Big
Data can also be a strategic
advantage. As an ADP Research
Institute®
report4
explains,
organizations “gain tremendous
strategic insight when they
measure Human Capital
Management (HCM) data and
then benchmark, or compare,
that data to organizations of
analogous size within the same
or similar industries.”
For example, Big Data
analytics might highlight that
some of your organization’s
talent is nearing retirement
age, which should provide the
impetus to create opportunities
for these retiring employees to
share their outgoing know-how
with younger employees
who will eventually fill those
vacated roles.
Training and
Development:
Enhancing
Organizational
Capabilities
Analytics and insights are only
useful if they result in optimized
organizational capabilities. This
might mean refreshed training
and development protocols,
for example, since the skills
necessary for success are sure
to change as your organization
expands.
HR leaders have an essential
task in providing training and
support so that new and old
employees, at every level of
the organization, can adapt to
changing markets. As a report
from McKinsey Quarterly5
notes,
“many underestimate the
importance of organizational
factors in translating a
growth strategy into reality.
This oversight can dampen
a company’s growth plans.
Organizational processes and
structures that are well suited
to today’s challenges may well
buckle under the strain of new
demands or make it impossible
to meet them.”
Organizations
“gain tremendous
strategic insight
when they
measure HCM
data and then
benchmark
that data to
organizations of
analogous size
within the same or
similar industries.
24. 24 ADP Human Capital Insights®
Risk
Employee wellness programs give organizations the opportunity to provide
better health outcomes to their valued employees and help increase
workplace productivity. Better health outcomes can lead to positive results,
such as reduced company-paid health costs and reduced absenteeism. Yet,
employee wellness programs come with a risk relating to the security of
private health information collected in connection with those programs.
Data
Security
Checkup:
Protecting
Employee
Health
Information
Hackers are getting more technically capable every day and
are increasingly targeting health records. According to the U.S.
Department of Health and Human Services (HHS),1
there have
been over 1,300 “large” incidents of breaches (500 records or
more breached) of protected health information since 2009,
impacting tens of millions of people. These breaches have
happened via laptops, desktops, network servers and portable
electronic devices, as well as old-fashioned paper files.
25. 25
Direct and Indirect Penalties for Breaches of Health Information
In addition to the public embarrassment and the justifiable anger from those who gave out their health
information (assuming it would be kept confidential), there are regulatory penalties for failing to comply with
privacy standards defined in the 1996 Health Insurance Portability and Accountability Act2
(HIPAA). Each
violation of the law will cost you from $100 to $50,000,3
and even more if you don’t have adequate protective
systems in place. HIPAA applies to anyone collecting and managing protected health information, which
would include employee wellness programs. Whether you outsource your wellness program or manage it
in-house, you’ll need to maintain the data security of employee health information.
1
U.S. Department of Health and Human Services, 2015.
2
Health Insurance Portability and Accountability Act, 1996.
3
HIPAA Violations and Enforcement, American Medical Association, 1996.
1. Establish Protocols
First and foremost, you should have clear
privacy policies and procedures in place for
anyone handling employee health data. Of
course, those policies and procedures should
be fully compliant with HIPAA and other
related state laws. A firewall should also be
installed between those handling the data on
behalf of the wellness program and the people
making all operational decisions. Because
employees are already hesitant to disclose
private health information, freely communicate
that this information is only for the wellness
program and no other purpose.
2. Educate Systematically
Have regular and effective security
and awareness training for all staff and
vendors who work with protected health
information. Every organization is only as
strong as its weakest link, so employees
who become casual about compliance
(for example, leaving a sticky note with
their passwords on their computer) put the
entire reputation of the wellness program
at risk. When staff working on the wellness
program violate the rules, take it seriously
and deal with the situation swiftly.
5 Best Practices for Health Data Security in Wellness Programs
3. Encrypt Data
Use strong data encryption, whether on a
desktop, laptop, server or other device, as
a way to keep data confidential. Encryption
makes data unintelligible to anyone without
the code to decrypt, so it’s a pivotal layer
of security against hackers. When sharing
protected health care information by email,
these messages should also be encrypted.
26. 26 ADP Human Capital Insights®
4. Employ Secondary Verification
Use multi-factor authentication as an additional security
measure. This would require users who have access to
protected information to have both a password and additional
method, such as a smartcard, authentication app or biometric
(a fingerprint, for example). Similar to encryption, multi-factor
authentication represents a further level of data security in your
efforts to prevent unauthorized disclosures of information.
5. Examine Internally
Review and audit your policies and
procedures, ensuring that your
staff and partners are following
them. Always retain your audit
records in case your compliance
efforts are called into question by
regulators, who will then audit you
independently. In every partner/
supplier agreement, be certain
that you reserve the right to
audit said partner for compliance
related to the protection of
employee health information.
Work with your partners to
carefully define HIPAA compliance
best practices, including the
necessity of your partner’s use
of encryption and multi-factor
authentication, which will help
to certify that they don’t transfer
protected employee health data
to anyone without your approval.
The Office of the National Coordinator for Health Information Technology also offers a detailed, 21-page
approach to protect employee health information, containing a wealth of related links and pertinent resources.4
3
Guide to Privacy and Security of Electronic Health Information, Office of the National Coordinator for Health Information
Technology and U.S. Department of Health and Human Services Office for Civil Rights, April 2015.
27. Dell, an end-to-end computing solutions
company, has transformed computing for 32
years and counting. As a global organization,
they needed HCM solutions that could handle
the volume of their employees across 22
countries and 91 entities. The company sought
a partner that understood their needs and
the needs of their team members to provide
scalable solutions, help streamline their services,
secure their data and ensure payroll accuracy.
Watch Dell’s story at bit.ly/1S4JLhy and hear
from Najuma Atkinson, Executive Director,
Global HR Services.
Challenges:
· Scaling HCM solutions
· Securing employee data
· Maintaining accurate global payroll
· Supporting business growth
Student Transportation Inc. is North America’s largest
independent provider of school bus transportation
services, operating more than 13,000 vehicles,
transporting over one million students per year and
employing more than 14,000 team members. Diverse
payroll schedules — hourly, salary, full-time and part-time
— prompted the need to streamline and centralize payroll
into one unified solution. And with employees working
across 146 terminal locations, an efficient tracking system
was critical to smooth operations. Integrated solutions
from ADP®
helped the organization to streamline its
payroll, effectively track and manage employee leave and
improve the workflow of their HR managers.
Watch Student Transportation’s story at
bit.ly/1ZxwzTP and hear from Sharon Phillips,
Manager of Corporate Payroll.
Challenges:
· Managing employee growth
· Ensuring ACA compliance
· Streamlining payroll
· Efficiently tracking employee time
Centralizing solutions to support
growth and improve HR workflows
The right business intelligence to make
impactful workforce decisions
Real Stories,
Real Impact
27
Student Transportation Inc.Dell
