This document provides an overview of a training program on Strategic Human Resource Management (SHRM) and Human Resource Business Partnering (HRBP). The program covers fundamental SHRM concepts, applying strategic principles to the HRM value chain, the strategic HRM process, HRM risk management, HRBP best practices, and transforming the HR function into strategic business partners. It includes learning activities such as discussing how organizations can improve their HRM functions and applying HR risk management processes. The goal is to help participants understand how to position HRM as strategic partners that deliver value to the business.
1. STRATEGIC HUMAN RESOURCES MANAGEMENT
(SHRM) AND -BUSINESS PARTNERING (HRBP)
CHARLES COTTER
22-23 AUGUST 2016
AFRICAN REGENT HOTEL, ACCRA, GHANA
www.slideshare.net/CharlesCotter
2. TRAINING PROGRAMME OVERVIEW
• Fundamental strategic HRM concepts
• Applying strategic management principles across the HRM value
chain
• Applying the strategic HRM process
• HRM Risk Management
• Strategic HRM Business Partnering (SHRBP) Best Practice
Principles
• Transforming to a SHRBP
• HRM Metrics and Analytics
3. INTRODUCTORY ACTIVITY
• Individual activity:
• Complete the following statement by inserting one
word only. As a HR Manager, in order to be regarded as
a strategic business partner, I need to/to
be………………………………………………
• Jot this word down and find other learners who have
written down the same word. Write this word down on
the flip-chart.
• Each learner will have the opportunity to explain their
choice of word.
4. STRATEGIC HUMAN RESOURCES
MANAGEMENT (SHRM)
• SHRM is defined as an approach to managing people that deals with how
the organization’s goals will be achieved through its human resources by
means of integrated HR strategies, policies and practices.
• SHRM propositions:
The HR of an organization play a strategic role in it’s success
Human capital is a major source of competitive advantage
It is people who implement business strategy
A systematic approach should be adopted to planning and implementing HR
strategies
HR strategies and plans should be integrated with business strategies and
plans
14. LEARNING ACTIVITY 1
• Group Discussion:
• By referring to Ulrich’s Strategic HRM model; HRM
processes and systems; the HRM architecture and
compliance with strategic management principles e.g.
Balanced Scorecard and Strategy Mapping etc.
evaluate whether your organization’s HRM function is
currently strategic.
• Identify areas of improvement (gaps) and recommend
improvement strategies i.e. Identify how the HR
function can enhance performance (efficiency) and
value add (effectiveness).
25. LEARNING ACTIVITY 2
• Group Discussion:
• Conduct an environmental scan – both internal and external – by
means of a SWOT Analysis of your organizational HRM
department/function. Identify at least x5 Strengths; x5
Weaknesses; x5 Opportunities and x5 Threats.
• Develop alternative and integrated HRM strategies in which you
demonstrate:
How to capitalize on strengths
How to minimize and eliminate weaknesses
How to exploit opportunities
How to counteract/negate threats
27. DEFINING HR RISK MANAGEMENT
• HR risk is thus any people, culture or governance factor causing
uncertainty in the business environment that could adversely
impact on the company’s operations.
What are the HR risks that could jeopardize management in achieving
its business objectives?
How serious are these risks, i.e. what are the impact of these HR risks?
What can we do about it, i.e. how can we mitigate the HR risks?
• HR Risk Management is a systematic approach of identifying and
addressing people factors (uncertainties and opportunities) that
can either have a positive or negative effect on the realization of
the objectives of an organization. (SABPP)
31. DISCUSSION QUESTIONS
• Indicate whether you believe that people risk is
a serious/priority risk and a strategic imperative
in your organization. Substantiate your answer.
If not a priority/strategic imperative, describe
how HRM can transform this process.
• By referring to the guidelines to HR Risk
Management, critically review and evaluate
current HRM Risk Management practices.
Identify gaps and recommend improvement
strategies.
32.
33. STEP 1: IDENTIFY HR RISKS
• The identified risks must be recorded and documented in a HR risk management
register.
• This process will be guided and defined by the organizational Risk Management
procedure.
Identify the HR risks that you'll either need to manage or accept
List all of the likely HR risks that your organization faces
• Every activity of an organization poses a risk so brainstorm and document the risks.
Consider both the general risks and the risks specific to your organization.
• Refer to list of typical risks
• Tip: Involving staff, volunteers and board members in the risk identification
process will give you a comprehensive picture of the risks based on different
people's involvement in different areas of the organization.
34. STEP 2: ANALYZE HR RISKS
• The chart allows HR Managers to rate potential risks on
these two dimensions.
The probability that a risk will occur is represented on one axis
of the chart
The impact of the risk, if it occurs, on the other.
• HR Managers can use these two measures to plot the risk
on the chart.
• HR Managers can then decide what resources they will
allocate to managing that particular risk.
• Risk Impact/Probability Chart.
38. RISK RESPONSE IMPLEMENTATION
• When you have decided which risk management
strategies will be the most effective & affordable for
your organization, practically outline the steps and
who is responsible for each step in the risk
management plan.
• Provide training for all organizational staff and
volunteers so they understand the rationale of the risk
management plan as well as the expectations,
procedures, forms etc.
• Communicate the plan and ensure that there is buy-in
from all who are involved in the organization.
39.
40. STEP 5: RISK EVALUATION
• Risk Monitoring
Is your plan working?
Have your risks changed?
Have you expanded or reduced your programs and services?
Are changes or updates required?
Are staff and volunteers following the risk management plan?
Do they need re-training on the details?
Do we need to better communicate the plan?
• Tip: Risk management is an evolving field. Therefore, it is a good
practice to keep current and re-evaluate your organization's risk
management system on an annual basis.
• Risk Control
42. LEARNING ACTIVITY 3
• Group Discussion:
• Apply steps 1-5 of the HR Risk Management
process to a selected organization.
43.
44. DEFINING HR BUSINESS PARTNERING
• Partnership: A relationship between individuals or groups
characterized by mutual co-operation and responsibility, for the
achievement of a specified shared goal.
• HR business partners are HR professionals who work closely with
an organization’s senior leaders in order to develop an HR agenda
that closely supports the overall aims of the organization. The
process of alignment is known as HR business partnering.
• Strategic business partners: A long-term relationship (alliance) to
achieve defined objectives common to all partners.
• In the context of strategic human resource management, the HR
function and activities are intended to ensure the organization's
financial success and prosperity (business continuity).
45. DIAGNOSIS: 10 BEST PRACTICE
GUIDELINES FOR HRBP
• #1 Embedding HRM strategy in business strategy and able to translate
that strategy into deliverable actions
• #2 Well-defined, implemented and reported HRM performance and ROI
metrics (creating credibility and accountability)
• #3 Generating business intelligence e.g. predictive and strategic analytics
(that shapes, informs, guides and ultimately, influences strategic business
decisions)
• #4 Offering a professional, value-adding business proposition sensitive
to and supportive of business needs, interests and strategic priorities
• #5 Ongoing line management consultation, engagement, coaching and
building trusting, collegial and mutually beneficial business relationships
46. DIAGNOSIS: 10 BEST PRACTICE
GUIDELINES FOR HRBP
• #6 HR Management and practitioners possess business and
industry knowledge, acumen and insight
• #7 HRM collaborates with line management to broker
meaningful and impactful business solutions
• #8 HRM processes, systems and practices are horizontally
integrated (bundled), agile, responsive and stream-lined (that
enhance productivity and efficiency)
• #9 HRM is a transformational initiator, driver and implementer
of business change
• #10 HRM is technology-savvy innovator, enabling and leveraging
best practices (e.g. CoE; Shared Services and e-HRM)
47. LEARNING ACTIVITY 4
• Individual Diagnostic Activity:
Critically review and evaluate your current HR
processes and function against the ten (10) best
practice criteria.
• Group Discussion:
Identify gaps. Recommend improvement
strategies.
48. RESEARCH-BASED HRBP MATURITY
(HAY GROUP)
• Only 34% believe HR is making a significant
strategic contribution to their organization; the
majority (60%) positioned themselves
somewhere in the middle
• Only 36% say talent management and
organizational effectiveness are closely aligned
• Slightly more than 39% say they have moved
away from traditional silos, but this leaves 61%
that haven’t – or worse still, are unsure.
49. RESEARCH-BASED HRBP MATURITY
(OTHER)
• Research shows that HR business partners
have a presence in 43% of high-performing
organizations (i4cp)
• The 2013 Global Assessment Trends Report
(GATR) - SHL.com found that 41% of firms
surveyed are confident that their human
capital strategy is properly embedded in their
organizational strategy.
50. HRBP CRITICAL SUCCESS FACTORS
• Strategic focus and thrust (on issues that contribute to business growth
and competitiveness)
• Adopting a “big picture” perspective (regarding the organization’s
priorities and goals)
• Having personal impact and credibility (to influence key decision-makers)
• Adopting an Key Account Management, (internal) client-centric approach
• Possessing a set of value-adding skills and knowledge (customers and
business)
• Being a diplomat and negotiator (in harmonizing the HRM agenda with
business needs)
52. EXPECTATIONS AND PRIORITIES OF
BUSINESS EXECUTIVES
• CEO’s expect the Human Resources function to play a
much more active and participatory role in enabling
business strategies.
• Senior business leaders consider talent to be perhaps
the critical factor in the push for sustainable growth
and the need to manage new opportunities and risks
in a more complex and interdependent world.
• According to The Conference Board CEO Challenge
(2013), Human Capital is rated 10% higher than
operational excellence as a major challenge for
businesses.
53. WHAT BUSINESS EXECUTIVES ARE
LOOKING FOR IN HRBP?
• Catalytic Driver of Change
• Pro-active Business Thinker
• Collaborative Consultant
• Purpose-directed Coach
• Delivery (results-oriented HR practices)
• (Credible and Accountable) Performance Advisor
• Strategic Facilitator
54.
55. ENABLERS OF TRANSFORMATION/RE-
POSITIONING TO HRBP – “RIGHTING THE SHIP”
“HR needs to follow the right process, applying
the right skills, in the right manner/method,
fulfilling the right roles, for the right reasons, to
achieve the right results.” (Cotter, 2014)
59. HRBP TRENDS
• Optimization of systems, processes and structures (architecture)
• Re-organizing HR service delivery and operating models e.g.
Shared Services
• Sourcing “Stars” from outside HRM
• Implementation of HR Academies and Business Partner training
programmes
• There is a particular focus on developing consulting, project and
change management skills as well as general business and
commercial acumen
• Establishing HR Centres of Excellence/Expertise (CoE’s)
63. ACTION STEPS/PLAN TO TRANSFORM
HR INTO HRBP
• Step 1: Strategic Review and Analysis
• Step 2: Strategic Role Clarification and Contracting
• Step 3: Formulation and Development of
Transformational Strategies
• Step 4: Implementation of Transformational Strategies
• Step 5: Measure and evaluate business impact and
results
64. STEP 1: STRATEGIC REVIEW AND ANALYSIS
• Objective: The focus of the analysis should be on understanding the
needs of the business as a sustainable entity, its strategic direction
and identifying initiatives that will help your business grow.
• Review of current HRM and business strategies
• Identification of resources and capabilities
• Tools:
Environmental scan (PESTEL)
Gap Analysis
S-W-O-T Analysis
65. STEP 2: STRATEGIC ROLE CLARIFICATION AND
CONTRACTING
• Objective: The concluding of Service Delivery
Agreements with line/operational and
senior/executive management
• Consultation, engagement and communication
with operational management
• Clarification of expectations, needs and value-
adding roles of HRBP
• Contracting agreements
66. STEP 3: FORMULATION AND DEVELOPMENT OF
TRANSFORMATIONAL STRATEGIES
• Objective: Development of HRBP transformation strategic
plan
• Formulation of goals and objectives
• Development of alternative transformational strategies
• Choice of most appropriate strategies
Viability
Feasibility
Sustainability
67. STEP 4: IMPLEMENTATION OF
TRANSFORMATIONAL STRATEGIES
• Project-based, cross-functional team approach
• Organizing, assigning and deploying resources
• Leading and directing (the implementation
process)
• Monitoring and Controlling
68. STEP 5: MEASURE AND EVALUATE BUSINESS
IMPACT AND RESULTS
• Measure and calculate the ROI
• Amend and review strategies (remediation
action)
• Report back to business partners (to
demonstrate transparency and accountability)
• Aspire to continuous improvement processes
69.
70. LEARNING ACTIVITY 5
• Group Discussion:
• Apply steps 1-5 of the action steps/plan of
transforming HR to a strategic HR business
partner.
71.
72. • What type of HRM Metrics does your organization currently
utilize?
• Describe the organizational impact, level of maturity and
credibility of these HRM Metrics
• What does your organizational HRM Metrics architecture look
like?
• What is the current degree of HRM practitioner competency of
HRM metrics/analytics?
• Review the benefits of HR Metrics. Is there a business case for
applying HR Metrics?
73. • Metrics are simply measurements. Metrics track activity, but
don’t necessarily show a causal relationship.
• HRM Metrics - Measurements used to determine the value
and effectiveness of HR strategies.
• Differentiation between People and HR Measures
• Human capital analytics examine the effect of HRM metrics
on organizational performance. In more general terms,
analytics look for patterns of similarity between metrics. By
using analytics over time, HRM can become predictive.
• Measures - #1 HRM measure?
DEFINING THE FUNDAMENTAL
CONCEPTS
81. 5-STEP HRM ANALYTICS PROCESS
• Step 1: Identify where HRM can make a strategic
impact in the organization
• Step 2: Develop appropriate metrics around these
areas
• Step 3: Obtain data relating to relevant metrics
• Step 4: Draw out insight from the data
• Step 5: Project and take action to communicate
metrics and related insights information to provide a
robust basis for strategic change and improvement
82. THE 5 E’s OF HRM ANALYTICS
• Exploration
• Examination
• Extraction
• Evaluation
• Extrapolation
83. STEP 1: IDENTIFYING WHERE HRM CAN MAKE A
STRATEGIC IMPACT (EXPLORATION)
• This process step focuses on determining the areas
where HRM can make a strategic impact within the
organizational context.
• It enables HRM management team to identify priority
areas for measurement which are aligned with
organizational goals and strategies.
• Identify capability opportunities or problem areas
from a business partner perspective.
• Sources for information collection, retrieval and
analysis.
84. SOURCES FOR INFORMATION COLLECTION,
RETRIEVAL AND ANALYSIS
• Employee and management surveys and interviews
(for employee contentment, communications, rewards
system)
• Performance appraisals (to measure productivity,
attendance)
• HR records (to track communications, turnover,
recruiting efficiency, retention, promotions, and
succession planning)
• Employee files (to research productivity, attendance,
training)
85. STEP 1: EXPLORATION
• A critical first step is to ensure that HRM is measuring the right things.
• The design and development of relevant HR metrics requires reflection
and discussion in order to determine what it takes for the organization to
succeed and to understand how HR can add value.
• Identify organizational burning issues
• Three issues underpin effective measurement (CIPD, 2011):
Aligning measurement with goals
Take a business partner perspective
Adding value by focusing on building capability
86. STEP 2: SELECTING APPROPRIATE METRICS FROM
WHICH ORGANIZATIONAL INSIGHTS CAN BE DRAWN
(EXAMINATION)
• HRM Measures:
Efficiency (10%)
Effectiveness (20%)
Impact (70%)
• Categories of HRM Metrics:
First Tier (most valued)
Second Tier (lesser valued)
• Commonly used HRM Metrics
90. 10
TYPICAL STATISTICS OBTAINED IN COMPILING HRM METRICS
Revenue factor, which is company total revenue divided by the
amount of full time employees
Human capital value added (revenue minus operating expense and
cost of compensation/benefit divided by the total amount of full time
employees)
Human capital return on investment: Revenue minus operating
expenses and cost of compensation benefit divided by cost of
compensation/benefit
Total compensation revenue ratio which is cost of
compensation/benefit divided by revenue
Labour cost revenue ratio, which is cost of compensation/benefit plus
other employee costs (bonuses, mileage paid, incentives) divided by
revenue
91. 10
TYPICAL STATISTICS OBTAINED IN COMPILING HR METRICS
• Training investment factor equals the total cost of training divided
by total amount of training attendees
• Cost per hire, which includes advertising, agency fees, relocation,
and others divided by operating expenses
• Health care costs per employee (total health care cost divided by
total amount of employees)
• Turnover costs, which is equal to hiring costs plus training costs plus
other costs (turnover rate during first year of employment is key)
• Voluntary separation rate is the total number of people who quit
or retired divided by the total amount of employees
92.
93. STEP 3: OBTAIN DATA RELATING TO RELEVANT
METRICS (EXTRACTION)
• The top performing companies were using a variety of
drilled-down metrics, having the people to analyze
them, and communicating them effectively.
• This process step focuses on how HRM can most
effectively communicate the insights drawn from
metrics to inform action and hence enable HRM to
deliver maximum strategic impact.
• Effective decision-making, based on robust measures
and metrics, therefore, requires HR professionals to
think carefully about the relationships that need to be
established to enable appropriate information-sharing
of these insights.
94. STEP 3: EXTRACTION – PROCESS STEPS
• #1: There is the initial “harvesting” or gathering of unstructured
data from the web.
• #2: The normalization stage—preparing harvested data for analysis.
Normally, a relational database such as MySQL is used, but NoSQL
can also be used.
• #3: The data is given additional structure with metadata, or
tagging. Analytics can then be presented through a dashboard.
• The process of collecting and updating the data from the myriad of
internet sources has to be automated. Advanced Programming
Interfaces (APIs) can enable different digital platforms to share
dynamic data and feed it into other applications, such as a
company’s own database.
95. STEP 3: EXTRACTION – CHALLENGES
CONFRONTED
• Struggling to use unstructured data
• Difficulty tying talent acquisition data to business results
• Problems with storing, retrieving and integrating data
• There is rarely a systematic approach to integrating disparate systems. Legacy data
systems often don’t talk to each other. There are missing links between ATS and
HRIS systems.
• The data exchange is often clumsy at best, requiring rekeying of data and manual
interventions.
• The successful transfer of data from multiple sources, such as an ATS, a recruiting
site or a social network with an HRIS System is the most problematic part.
• Failure to get the most of ATS
96. Source: The State of Workforce Analytics and
Planning 2014 Survey Report
97. Source: The State of Workforce Analytics and
Planning 2014 Survey Report
98. STEP 4: DRAWING OUT INSIGHTS
FROM DATA (EVALUATION)
• The HRM function and measurement capability
• HR professionals have long been data collectors, amassing and
keeping track of employees’ personal information, salary rates and
the annual number of retirements. But to grasp the potential of HR
analytics, HR managers need to become data interpreters.
• Top performing companies invest in personnel who have analytic
and process-oriented capabilities, those people who can install the
necessary methodological disciplines necessary to use the
information effectively.
• Identify root causes and cause-effect linkages and -relationships
• Action planning – interventions and solutions
101. STEP 5: PROJECT AND TAKE ACTION TO COMMUNICATE METRICS AND
RELATED INSIGHTS INFORMATION TO PROVIDE A ROBUST BASIS FOR
STRATEGIC CHANGE AND IMPROVEMENT (EXTRAPOLATION)
• Projection of data – forecasting (PREDICTIVE ANALYTICS)
• To communicate HRM Analytics, tell a story (NARRATIVE)
• “Data is abundant, but if you don’t give it context, it’s just
a bunch of numbers.”
• Internal benchmarks (to compare their business units to
others in the organization)
• Support comes after results are delivered, not before. “It
really comes back to how credible you are. You get buy-in
when you show up repeatedly with accurate numbers and
you can relate the story to how the company’s performing.”
102. STEP 5: EXTRAPOLATION - REPORTING
• HR analytics reporting
• How the information is communicated to the organization, particularly
the C-suite, is critically important.
• Companies simply produce spreadsheets that offer no easy and timely
way to present what is happening in the business.
• Like any good research report, it is vital to present meaningful
information and identify actionable insight that can be used to make
positive change.
• Tactically, the best practice organizations, distribute multiple reports to
multiple levels. Tailored reporting to address the specific needs, and
ideally focuses on very specific business impacts.
• If the metrics being shown convey business impact, quarterly reporting of
5-10 of the most critical, agreed-to KPIs is warranted.