Talent Management - planning, acquisition, retention and analytics processes, principles and best practice

1. TALENT MANAGEMENT - PLANNING,
ACQUISITION, RETENTION AND
ANALYTICS MASTERCLASS
CHARLES COTTER
29-30 SEPTEMBER 2016
EMPIRE HOTEL, SANDTON
www.slideshare.net/CharlesCotter

2.  Strategic Talent Management
 (Strategic) Talent Planning
 Talent Acquisition
 Employee Selection principles and practice
 Employment negotiations
 Talent Retention, Employee Engagement and Succession Planning
 Talent Metrics and Analytics
TRAINING PROGRAMME OVERVIEW

4.  Individual activity:
 Complete the statement by inserting one (1) word only. As a HR
Manager, in order to effectively apply Strategic Talent
Management, I need to/to be .…………………………………..
 Now find other learners with the same word as you.
 Jot these words down on the flip-chart.
 Each learner will have the opportunity to elaborate on their
chosen word.
INTRODUCTORY ACTIVITY

5.  Strategic Human Resources Management (SHRM)
 Ulrich’s view of SHRM and Roles Model
 Norton and Kaplan’s Balanced Scorecard
 (Strategic) Talent Management
 (Strategic) Talent /HR Planning
 HRM Value chain
DEFINING THE FUNDAMENTAL
CONCEPTS

6. 6 STRATEGIC MANAGEMENT
PRINCIPLES (APPLICABLE TO HRM)
 (Vertical) Alignment with business strategy, goals and objectives
 (Horizontal) integration of HRM value chain functions (bundling)
 HRM conducts environmental scanning and is highly attuned,
sensitive to and pro-actively responsive of change
 HRM is future-focused (ensuring that the organization is future-
proof)
 HRM adopts a measurement culture e.g. scorecards, dashboards,
metrics, risk analysis and audits etc.
 Enables the organization to gain a sustainable, strategic competitive
advantage

12. BALANCED SCORECARD

13.  Talent Management is an integrated process which focuses on
attracting, developing, deploying and retaining the best
people and the other HRM value chain functions.
DEFINING TALENT MANAGEMENT

14. DEFINING WORKFORCE PLANNING
(WFP)

16.  Step 1: HR/Workforce planning
 Step 2: Acquiring qualified workers
 Step 3: Retaining qualified workers
 Step 4: Motivating qualified workers
 Step 5: Evaluating qualified workers
 Step 6: Training and developing qualified and competent
employees
HRM PROCESS/VALUE CHAIN

18. MODERN: STRATEGIC HRM VALUE
CHAIN

19.  Group Discussion:
 By referring to step 1: HR Planning and Step 2: Talent
Acquisition of the HRM process, evaluate the efficiency and
effectiveness of these two steps. Identify areas of
improvement (gaps) and recommend how the HR function can
enhance performance and value add.
LEARNING ACTIVITY 1

21. WFP - GETTING IT “RIGHT”

23. INTEGRATING HR AND BUSINESS
PLANNING

24.  Inventory of available organizational core competencies?
 Inventory of organizational scarce skills?
 Mission critical organizational jobs (to enable strategy
achievement)?
 Critical employee segments (to promote business
continuity/sustainability)?
 Competitivity and readiness of organizational talent pipeline?
 Identification of organizational talent gaps?
CLEAR VIEW?

25. CURRENT: HRM-BASED WORKFORCE
PLANNING ARCHITECTURE

26. REQUIRED: BUSINESS-BASED SWP
ARCHITECTURE

27.  #1: Aligned with organization’s strategic business plans and priorities.
 #2: Future-focused, adopting a strategic, medium to long-term forward-
looking approach.
 #3: Pro-active, sensitive and responsive to (internal and external)
environmental change and trends.
 #4: Provides accurate and reliable (clear view) talent
planning/management information e.g. available core competencies;
scarce skills; critical jobs and employee segments and talent gaps.
 #5: Collaborative, well coordinated and partnering effort (HRM has co-
opted business partners e.g. line managers to the process).
DIAGNOSIS: 10 BEST PRACTICE
GUIDELINES FOR EFFECTIVE SWP

28.  #6: Integrated (bundled) with other HR value chain processes e.g.
Recruitment, Succession Planning, Retention and Leadership Development.
 #7: Generates meaningful business intelligence which shapes, informs and
influences business planning and supports strategic decision-making.
 #8: Integrates both scientific (HRM metrics, predictive analytics and
strategy maps) with artistic (planning) principles.
 #9: Dynamic - regularly and systematically monitored, reviewed, evaluated
and adapted (committed to continuous improvement processes).
 #10: Yields a positive ROI, with tangible/demonstrable outcomes and
impact i.e. creates sustainable HCM competitive advantages
DIAGNOSIS: 10 BEST PRACTICE
GUIDELINES FOR EFFECTIVE SWP

29.  Individual Activity:
 Diagnose your current Workforce Planning practices against
the ten (10) best practice criteria.
 Group Discussion:
 Identify gaps and recommend improvement strategies.
LEARNING ACTIVITY 2

30. LEVELS OF SWP MATURITY

31.  Although 92% of companies have some level of workforce planning, only 21%
take a strategic, long-term approach to addressing the talent demand, talent
supply and the actions necessary to close the gap between the two.
 Only 11% of organizations have currently reached Level 3 of Maturity.
 Only 10% have reached Level 4.
 Although best-practice companies align workforce planning as an integral part
of their business and financial planning, 67% of companies at every level still
conduct workforce planning on an “as-needed” basis.
 Only 25% of workforce plans are effective at helping business leaders forecast
revenue and operating budgets.
 Only 27% of workforce planning processes are conducted by recruiting and
staffing departments . The majority of workforce planning processes are owned
by individual business leaders – so they are disjointed from recruiting and even
HRM.
RESEARCH-BASED (BERSIN) REALITY
CHECK

33.  SCANNING
 P ROFILING
 ANALYZING
 DEVELOPING
 I MPLEMENTING
 CONTROLLING
SWP: S-P-A-D-I-C PROCESS/CYCLE

35. THE NATURE OF THE BUSINESS
ENVIRONMENT – V-U-C-A

36.  Reviewing current HRM and organizational strategies
(Strategic Direction and Intent)
 Conducting an environmental scan
 Identifying workforce trends and challenges
 Benchmarking
 Preferred Scanning tools – SWOT and PESTEL Analyses
STEP 1: SCANNING – STRATEGIC
ANALYSIS

37.  Forecasting HR Demand (Futuring)
 Segmentation
 Measuring Current Supply
STEP 2: PROFILING

38.  "Futuring is the field of using a systematic process for thinking about,
picturing possible outcomes, and planning for the future. Futurists are
people who actively view the present world as a window on possible
future outcomes. They watch trends and try to envision what might
happen.“ (Kirkwood, 2011)
 Futuring is a broader concept than the forecasting traditionally done
in Workforce Planning and enables organizations to look at the future
in four different ways (Cillie-Schmidt, 2013):
 The possible future - what could happen?
 The plausible future - what could realistically happen?
 The probable future - what is likely to happen?
 The preferred future - what we want to happen?
FUTURING

40.  Forecasting should consider the past and the present
requirements as well as future organizational direction/s
Number of employees
Type of employees
Skills requirements of these employees
 Consider and assess the challenges and constraints
 Preferred Scanning tools –”What If” and Scenario Planning
FORECASTING HR DEMAND

41.  Assess the current HR capacity of the organization by means of
the Skill inventories/audits method
The knowledge, skills and abilities of your current staff need to be
identified
Employee experience, education and special skills
Certificates or additional training should also be included
 A forecast of the supply of employees projected to join the
organization from outside sources
 HRM indicators, metrics and indices e.g. turnover rates
MEASURING CURRENT SUPPLY

42. STEP 3: ANALYZING –
RECONCILING/GAP ANALYSIS

43. STEP 4: DEVELOPING – STRATEGIC
HRM ACTION PLANS

45.  Develop and initiate a Resourcing Strategy
 Matching strategy (intervention) with scenario (surplus or
deficit)
 Action plan-based implementation methodology
STEP 5: IMPLEMENTING -
INTERVENTIONS

46.  There are five HR strategies for meeting your organization's
needs in the future:
Restructuring strategies
Training and development strategies
Recruitment strategies
Outsourcing strategies
Collaboration strategies
HR ACTION PLANS

47. HRM ACTION PLAN (INTERVENTION)
TEMPLATE

48.  Tracking implementation progress – monitoring, measuring,
evaluating and reporting
STEP 6: CONTROLLING

49.  Group Discussion:
Apply steps 1-6 of the HR Planning process in the context of your
organization.
LEARNING ACTIVITY 3

53. RECRUITMENT PROCESS
 Defining the role (Job Analysis)
 Job Specification
 Job Description
 Attracting applications
 Recruitment methods (internal and external)
 Employee value proposition (EVP)
 Managing the application and selection process
 Making the appointment

54. JOB ANALYSIS

55.  Objective: Magnetically attracting the “Cream of the Crop”
 Objective: Facilitating an optimal Person-Environment (P-E) fit
 Strategy: Developing, articulating and advocating of a
compelling Employee Value Proposition (EVP)
 Strategy: Employer Branding – (re) positioning as an
“Employer of Choice”
STRATEGIC TALENT ATTRACTING
AND RETENTION

56.  A resourcing strategy is concerned with shaping what an organization has to offer to
people to join and stay in the organization. (Armstrong, 2011)
 EVP is a statement of what an organization will provide for people that they will value -
why the total work experience at their organization is superior to that at other
organizations.
 The EVP is an employee-centered approach that is aligned to existing, integrated
workforce planning strategies because it has been informed by existing employees and
the external target audience.
 Key Selling Points (KSP): Host of financial and non-financial benefits
 Non-financial benefits:
 The attractiveness of the organization
 Responsibility – corporate conduct, ethics and CSR/CSI
 Respect – diversity and inclusiveness
 Work-life balance
 Opportunities for personal and professional growth
EMPLOYEE VALUE PROPOSITION
(EVP)

57. COMPONENTS OF VIABLE EVP

58. EVP PROCESS

59.  Unique Selling Points (USP) - Employer brand that is unique
and special
 Creation of a Brand image of the organization for prospective
employees
 Influenced by the reputation of the organization
 Creating an Employer Branding strategy
EMPLOYER BRANDING

60. MANAGING THE APPLICATION AND
SELECTION PROCESS
 The Curriculum Vitae (CV) or
 The application form
 Dealing with applications
 The ‘candidate experience’

61.  Group Discussion:
 Develop an EVP for a defined organization.
 Critically evaluate the various talent acquisition strategies, in
particular, social media recruitment, and indicate the most
viable and feasible strategies.
LEARNING ACTIVITY 4

62. SELECTION PROCESS

63.  Short-listing
 Assessing applicants to decide who should be offered a job
 Making the employment appointment (offer)
 References
 Medical examinations
 Psychometric testing
 Performance tests
 Employment offer
SELECTION PROCESS AND METHODS

66. DEFINING COMPETENCY-BASED
INTERVIEWS
 Competency-based interviews (also called structured
interviews) are interviews where each question is designed to
test one or more specific skills.
 The answer is then matched against pre-decided criteria and
marked accordingly.
 For example, the interviewers may want to test the candidate's
ability to deal with stress by asking first how the candidate
generally handles stress and then asking the candidate to
provide an example of a situation where he worked under
pressure.

67. DIFFERENTIATING BETWEEN COMPETENCY-BASED
INTERVIEWS AND NORMAL INTERVIEWS
 Normal interviews are essentially a conversation where the interviewers ask
a few questions that are relevant to what they are looking for but without
any specific aim in mind other than getting an overall impression of you as an
individual.
 Questions are fairly random and can sometimes be quite open.
 Competency-based interviews are more systematic, with each question
targeting a specific skill or competency.
 Candidates are asked questions relating to their behaviour in specific
circumstances, which they then need to back up with concrete examples.
 The interviewers will then dig further into the examples by asking for specific
explanations about the candidate's behaviour or skills.

68. CBI PROCESS FLOW

69. SKILLS AND COMPETENCIES FOR CBI
 Adaptability
 Compliance
 Communication
 Conflict management
 Creativity and Innovation
 Decisiveness
 Delegation
 External awareness
 Flexibility
 Independence
 Influencing
 Integrity
 Leadership
 Leveraging diversity
 Organisational awareness
 Resilience and tenacity
 Risk taking
 Sensitivity to others
 Team work

70. HOW COMPETENCY-BASED INTERVIEW
QUESTIONS ARE MARKED
Positive indicators
Negative indicators
 Demonstrates a positive approach towards the
problem.
 Considers the wider need of the situation
 Recognises his own limitations
 Is able to compromise
 Is willing to seek help when necessary
 Uses effective strategies to deal with pressure/stress
 Perceives challenges as problems
 Attempts unsuccessfully to deal with the situation
alone
 Used inappropriate strategies to deal with
pressure/stress

71. HOW COMPETENCY-BASED INTERVIEW
QUESTIONS ARE MARKED

72. S-T-A-R CBI QUESTIONING PROCESS

73. CBI CHECKLIST
 Prepare for the interview
 Follow a logical sequence
 Create a proper environment
 Relax the candidate
 Let the candidate do the talking
 Perfect your questioning

74. CBI CHECKLIST
 Become a better listener
 Keep your reactions to yourself
 Stay in control
 Take notes
 Sell but don’t oversell the position
 Conclude on a proper note

75. PRIMARY EMPLOYMENT
NEGOTIATION OBJECTIVE

76. PHASES OF EMPLOYMENT
NEGOTIATION

77. PHASE 1: PREPARATION
 Preparatory points to consider
 Key to preparation – setting ground rules and other guidelines etc.
 Identifying your Hot Buttons
 Doing Research
 Identifying Your Walk Away Position (WAP)
 Identifying Your Best Alternative to a Negotiated Agreement
(BATNA)
 Working within the Zone of Possible Agreement (ZOPA)

78. PREPARATORY POINTS TO CONSIDER
 Goals
 Trades
 Alternatives
 Relationships
 Expected outcomes
 Consequences
 Power
 Possible solutions

79. DOING YOUR RESEARCH
 When doing research and preparing for employment
negotiations, there are 3 important considerations:
Collecting facts
Knowing priorities
Knowing principles

80. WORKING WITHIN THE ZONE OF POSSIBLE
AGREEMENT (ZOPA)

82. STEP 2: EXCHANGING INFORMATION –
KEY ACTIONS
 This is not a step that many negotiators consider consciously,
except perhaps in legal situations (where it is referred to as
disclosure), but it makes sense, even in negotiations at home,
and, certainly, in the workplace.
 Exchanging information is really an extension of preparation,
and allows both parties the opportunity to consider all of the
available information before a bargaining meeting takes place.
 The strength of these answers could put you in a much stronger
bargaining position when you present your ideas to the boss.

83. STEP 3: BARGAINING
 Responding to Challenges
 Creating win-win solutions

84. PARENT-ADULT-CHILD (PAC) MODEL

86. STEP 4: COMMITMENT AND CLOSING
 Once the parties have completed bargaining, made all the
adjustments, and agreed upon the least uncomfortable result, the
negotiation is ready for commitment and closure.
 Developing a Sustainable Agreement
 What is a Sustainable Agreement?
 Getting everyone’s Perspective
 Reviewing the Information
 Outlining the Options
 Gaining Consensus

87. DEFINING A SUSTAINABLE
AGREEMENT
 A sustainable agreement can be said to reflect the reality of the business i.e. the reality of
business and economic cycles, industries, and real issues that people face.
 It must also reflect the multiple aspects of the stakeholders who both provide input, and
are affected by the results.
 In developing a sustainable agreement, the partners must ensure that:
 #1: The organizations that they negotiate on behalf of are interested in having an agreement
 #2: The negotiating organizations will enforce and take part in the terms of that agreement.
 If the agreement cannot stand on its own, and the parties who sign it refuse to use it,
then the paper it is printed on is useless.
 An agreement also cannot focus on one aspect of the business when the business
impacts other industries, cultures, or linguistic groups.

88. REACHING CONSENSUS

89. REACHING CONSENSUS
 Before an agreement is signed, it is important to have consensus for agreement among
the parties.
 Consensus can be difficult during tough negotiations; generally, the more stakeholders
taking part in the process, the more difficult it is to reach consensus.
 Persuasion, that ability to have people recognize the value in what we are saying, is an
exceptionally valuable communication skill for a negotiator.
 One way to secure commitment is to ask the other party to summarize their
understanding of the agreement, and to get it in writing. To clarify, it can help to ask them
three questions:
 Please explain what we have agreed to.
 Do you agree with what we have agreed to?
 Are you committed to carry out the agreement? If not, what factors need to be clarified?

91.  Group Discussion:
 Critically evaluate the various selection methods and indicate
the most viable and feasible.
 Critically evaluate the merits of CBI. Describe the process of
conducting a CBI.
 Describe the best practice employment negotiation principles
and processes.
 Describe the best practice on-boarding principles and
processes.
LEARNING ACTIVITY 5

92. THE LINK BETWEEN TALENT ATTRACTION
AND EMPLOYEE ENGAGEMENT

93.  HUMAN CAPITAL
 FINANCIAL CAPITAL
 SOCIAL CAPITAL
 INTELLECTUAL CAPITAL
 EMOTIONAL CAPITAL
 CULTURAL CAPITAL
THE IMPORTANCE OF CAPITAL – AS
A RETENTION STRATEGY

97. THE STRATEGIC IMPERATIVE OF
EMPLOYEE ENGAGEMENT

98.  Are employees COMMITTED to the organization?
 Are employees proud to work for the organization – company/brand
ambassadors? CITIZEN
 Do employees put forth extra/discretionary effort to help the
organization and their colleagues achieve business objectives?
COMRADE
 Are employees enthusiastic and passionate about their work/jobs?
CREATOR
 Are employees CONNECTED (intellectually and emotionally) to their
work/jobs – offer value add?
DIAGNOSIS: THE 5 C’S OF EMPLOYEE
ENGAGEMENT

99.  Gallup’s Q12 survey:
#1 Role clarity and expectations
#2 Resources – materials and equipment
#3 Role optimization and opportunities
#4 Receipt of recognition and praise
#5 Managerial care and interest
#6 Encouragement of personal and professional development
DIAGNOSIS OF EMPLOYEE
ENGAGEMENT

100.  Gallup’s Q12 survey:
#7 Opinions and inputs are valued
#8 Job/task significance
#9 Fellow employee commitment to performance excellence/quality
#10 Collegial and harmonious working relationships
#11 Managerial interest in career progression and development
#12 Ample opportunities to learn and grow
DIAGNOSIS OF EMPLOYEE
ENGAGEMENT

101.  How can I grow?
 Do I belong?
 What do I give?
 What do I get?
FOUR STAGES OF EMPLOYEE
ENGAGEMENT

102. ENGAGEMENT’S EFFECT ON 9 KEY
PERFORMANCE INDICATORS

104.  According to Gallup (2013) research, the best organizations
deeply integrate employee engagement into the following four
(4) areas:
Strategy and Leadership Philosophy
Accountability and Performance
Communication and Knowledge Management
Development and on-going Learning Opportunities
BEST PRACTICE EMPLOYEE
ENGAGEMENT

105.  According to Gallup (2013), strategies to improve employee engagement
are:
 Use the right employee engagement survey
 Focus on engagement at the enterprise and local levels
 Select the right managers
 Coach managers and hold them accountable for their employees’
engagement
 Define engagement goals in realistic, everyday terms
 Find ways to connect with each employee
STRATEGIES TO DEVELOP
EMPLOYEE ENGAGEMENT

106.  According to Gallup (2013), three (3) strategies to accelerate
employee engagement are:
Select the Right People and Managers
Develop employees’ strengths
Enhance employees’ well-being
STRATEGIES TO ACCELERATE
EMPLOYEE ENGAGEMENT

107.  Through selecting the right managers and employees for any role,
companies can strategically boost engagement.
 Great managers have great talent for supporting, positioning,
empowering, and engaging their staff.
 A few key employees stand out for their ability to foster workplace
engagement. They energize and influence others with their
commitment to achieving organizational and team objectives.
 Gallup developed the Engagement Creation Index (ECI) — an
innovative tool designed to identify and measure the talent for
engaging others — to help organizations transform their
engagement dynamic by adjusting their hiring practices. ECI captures
a candidate’s ability to act as a catalyst to build engaged work teams.
SELECT THE RIGHT PEOPLE AND
RIGHT MANAGERS

108.  It is imperative for leaders to devise selection strategies with the goal
of accelerating employee engagement. This starts with hiring and
promoting managers based on objective selection criteria to ensure
that companies hire/promote managers with the talent to lead and
engage their workgroups.
 With each new hire or promotion, employers have the opportunity to
maximize employee engagement in the workplace.
 People want to feel supported, have a sense of belonging, and
understand the contribution they can make toward organizational
goals. Making sure that they get these things from their interactions
with managers and team members is key to driving their
engagement.
SELECT THE RIGHT PEOPLE AND
RIGHT MANAGERS

110.  According to HR Future Magazine, "39% of employees are
concerned about losing knowledge as their older colleagues
retire, implying that succession planning should be top of the
HRM agenda."
SUCCESSION PLANNING STATISTIC

111.  Succession planning is the identification and development of
potential successors for key positions in an organization, through a
systematic evaluation process and possible training or mentoring.
 Succession planning and management involves an integrated,
systematic approach to identify, develop and retain talent for key
positions and areas in line with current and projected business
objectives.
 Succession Planning is "a means of identifying critical management
positions, starting at the levels of project manager and supervisor and
extending up to the highest position in the organization.”
DEFINING SUCCESSION PLANNING

113.  “EFFECTIVE SUCCESSION MANAGEMENT IS MUCH
MORE THAN SIMPLY HAVING A SLATE OF CANDIDATES
TO REPLACE THE CEO. IT REQUIRES ENSURING THAT
THE ORGANIZATION HAS THE DEPTH AND BREADTH
OF TALENT NEEDED TO FULFILL ITS MOST CRITICAL
OBJECTIVES.”
 “EFFECTIVE SUCCESSION PLANNING CANNOT SUCCEED
WITHOUT COMMITMENT FROM LEADERS AT ALL
LEVELS, STARTING AT THE TOP.”
CRITICAL SUCCESS FACTORS FOR
SUCCESSION PLANNING

114.  PLAN, DO AND REVIEW MODEL
 ROTHWELL MODEL
 U.S. OFFICE OF PERSONNEL MANAGEMENT MODEL
 INTEGRATED MODEL
 SIBSON CONSULTING MODEL
THE SUCCESSION PLANNING
PROCESS – VARIOUS MODELS

115. ROTHWELL MODEL

116. U.S. OFFICE OF PERSONNEL MANAGEMENT
MODEL - ILLUSTRATION

117.  STEP 1: IDENTIFY CURRENT CRITICAL/KEY POSITIONS AND ANALYZE FUTURE
REQUIREMENTS AND COMPETENCIES (BUSINESS STRATEGY)
 STEP 2: IDENTIFICATION AND ASSESSMENT OF SUCCESSORS – POTENTIAL AND
PERFORMANCE (9-BOX MATRIX)
 STEP 3: IDENTIFY TALENT GAPS
 STEP 4: DEVELOP SUCCESSION PLAN AND STRATEGIES
 STEP 5: IMPLEMENT SUCCESSION PLAN AND DEVELOPMENTAL STRATEGIES
 STEP 6: MONITOR AND TRACK PROGRESS
 STEP 7: REVIEW AND EVALUATE THE IMPACT/EFFECTIVENESS OF SUCCESSION
PLAN
GENERIC SUCCESSION PLANNING
PROCESS

118. STEP 2: IDENTIFICATION AND
ASSESSMENT OF SUCCESSORS

119.  Group Discussion:
 Evaluate the current degree of your organization’s employee
retention by gauging against the 10 retention criteria and the
Irresistible Organization.
 Develop best practice employee engagement strategies.
 Critically evaluate a defined organization’s succession
planning strategies.
LEARNING ACTIVITY 6

120. • 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?

122. HRM ANALYTICS TASK TEAM – 2016?

123.  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

125. STRATEGIC PERSPECTIVE – HRM
METRICS/ANALYTICS
• Strategic HRM and correlation to metrics/analytics
• The Balanced Business Scorecard
• Strategy Mapping
• HRM Scorecard:
 Key people measures from the organization’s scorecard
 The second class of measures should be the HR measures
• Linking business strategy to personal objectives

130. HRM ANALYTICS MATURITY MODEL
(BERSIN BY DELOITTE)

132. TRANSFORMING HRM TO A DATA
SCIENCE-DRIVEN FUNCTION

133. HRM ANALYTICS
PROCESS

134. HR METRICS PROCESS – BASIC MODEL

135. HRM METRICS AND ANALYTICS
PROCESS

136. 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

137. THE 5 E’s OF HRM ANALYTICS
Exploration
Examination
Extraction
Evaluation
Extrapolation

138. 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.

139. 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)

140. 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

142. 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
 Refer to Annexure A: Comprehensive HRM Metrics (pages 76-114)
and Annexure B: HRM Effectiveness Metrics (pages 115-123)

143. STEP 2: EXAMINATION - HRM
MEASURES

144. STEP 2: EXAMINATION - HRM
MEASURES

145. BROAD CATEGORIES OF HRM METRICS
 Workforce Demographics
 HR Efficiency
 Remuneration
 Skills Development, Training & Education
 Productivity
 Provisioning and Recruitment
 Risk Analysis
 Staff Retention

146. FREQUENTLY USED HRM METRICS
(PWC)

147. 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

148. 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

149. Present x Productive 
Productivity
Q: Are your employees contributing to the success of the organisation.
Are you connecting human capital & business measures.
? Productivity measures on an annual and a quarterly basis
? Compare to national averages
Specific metrics -
 Return on Human Capital Investment
 Revenue per Full-Time Equivalent (FTE)
 Profit per FTE
Critical HR Measures - forTrue Business Impact

150. Critical HR Measures - forTrue Business Impact
Time to fill vacancy x Quality of hire 
Recruitment Effectiveness
Q: Are you recruiting new talent of a high calibre. Are they staying.
Are they performing.
? Business-impact shortfalls in capacity
? Consistently increasing organization’s performance through
improved talent
Specific metrics -
 Vacancy Rate
 FirstYearTurnover Rate
 New Hire Performance
 Time to Fill

151. Critical HR Measures - forTrue Business Impact
Rate ofTurnover x Retention of critical top talent 
Critical Talent Retention
Q: Is your top talent / your vitally important workers / your competitive
advantage – resigning, or at risk of resigning, at a greater rate than your
less crucial employees.
? Overall tenure trends
? Career development
Specific metrics -
 Resignation Rate
 Resignation Rate ofTop Performers
 Promotion Rate and PromotionWaitTime
 Engagement Index
 Market Compensation Ratio

152. 5 STEPS TO FIND THE RIGHT
MEASURES

154.  Group Discussion:
 Apply step 1 (Exploration) and step 2 (Examination) of the HRM
Analytics process to a defined organization.
 With step 2, refer to Annexures A and B, for guidelines.
LEARNING ACTIVITY 7

155. 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.

156. 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.

157. 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

158. Source: The State of Workforce Analytics and
Planning 2014 Survey Report

159. Source: The State of Workforce Analytics and
Planning 2014 Survey Report

160. 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

162. DMAIC RCA PROCESS (ILLUSTRATION)

163. CAUSE EFFECT/FISHBONE DIAGRAM

164. 5-WHY ANALYSIS

166. 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.”

167. 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.

168.  Group Discussion:
 Apply steps 3-5 of the HRM Analytics process to a defined
organization.
LEARNING ACTIVITY 8

169. CONCLUSION
Key points
Summary
Questions

170. CONTACT DETAILS
 Charles Cotter
 (+27) 84 562 9446
 charlescot@polka.co.za
 LinkedIn
 Twitter: Charles_Cotter
 http://www.slideshare.net/CharlesCotter