Best in Class Practices for managing Human Capital Information
Best-in-class practices for managing human capital information appears to rely on the following:
1. An understanding of the talent value chain – 8% of HR leaders emphasized organizing information according to value-chain components. A number of companies had deployed HR scorecard type systems where both end-result and process metrics were used to create a profile of how the value chain was expressed in their business.
2. An understanding of how knowledge work adds value to business products and services – Linda Kane at Dreyfus-Mellon Financial analyzed differences in sales performance across a wide range of measures. John Malanowski at Engage Technologies modeled the contribution of various key roles in relation to business
lines. Companies such as McKinsey and Company, evaluate consultants based on the value achieved by the client, not just the billable time from the project.
3. An understanding of the specific services and deliverables offered by HR functions and sub-functions – more and more HR organizations are structuring around a shared service model where it is necessary to define deliverable services, rather than functional roles. Companies utilizing this model describe services in discrete terms such as “candidate portfolio preparation” to indicate that they will provide 4 qualified candidates that meet specified criteria within a certain time frame. The level of detail lends itself to comparative metrics, benchmarking and the pricing of services.
4. An understanding of how skills and competencies aggregate in individuals and teams - as business become more matrixed, it is often necessary to group or build teams from centers of expertise. This is generally referred to as “staffing” by most organizations and is greatly enhanced by enterprise HCM systems, skills inventories and collaborative systems. The latter allows for rapid modeling and the discussion of
option scenarios. The timely ability to manage the process (time-to-team formation) and the ability to match staffing requirements models (% match), both lend themselves to comparative benchmarks.
5. An understanding of how governance practices can be used to coordinate work and improve collaboration – governance issues were mentioned primarily by companies with the need for cross-border coordination of projects. In these instances, the staffing function expands to include job and role design for formal and informal coordinators and team roles. In addition, the cost of coordination is an important
factor when modeling staffing options for global firms and for firms with substantial outsource capacity. HR leaders involved in these situations cautioned that although the basic labor models may vary significantly (e.g. an entry level Chinese programmer may be 25% of the cost of a US counterpart), a series of other factors
such as project type, coordination costs, risk and utilization costs needed to be factored in to achieve a true comparison.
6. An understanding of the market value of different competency sets – market valuation of talent and intellectual capital has borrowed heavily from financial portfolio management with the adaptation of techniques from “option modeling” and “risk-value” modeling. Almost all companies surveyed made an attempt to marketprice talent and measure basic indicators such as cost-per-hire. 50% of our study base conducted some additional analysis on the differences between certain internal and external hires. 20% had longitudinal data on a broad range of value chain components including separation costs and the re-entry costs and productivity of alumni employees.
7. An understanding of how action in each phase of the talent value chain can affect a company’s ability to attract, retain and maximize the productivity of its employee base – at the end of the day, great data is of little value unless it leads to action. Although some companies had documented escalation procedures and action
categories, particularly for call center activity, most relied on “work-out” processes for crafting customized responses to customer requirements or in response to changes in HR metrics.
“We can take the power inherent in let’s say 1,500 people, 2,000 overall, all the absolute active supporters and multiply that. Do what I would call a force multiplier, how do we maximize the impact that that could have? How do we enlarge the opportunity for out-reach? How do we get more people to know our message?” -Richard Colt, COO, Maryknoll Missionaries
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