A recent Human Capital Institute Webcast touched off a torrent of questions and comments by our HCI members.   David Marzo , Vice President, Solutions Architecture , The Newman Group and Frank Horvath , Principal Consultant , The Newman Group presented this webcast– and they were gracious enough to guest on this blog today and answer some of your questions.  Here are their answers to the queries:

 

Erin asked: In applying the P&L mentality to talent management, how do you recommend determining ROI on talent quantitatively (specific to training and, on a separate note, project based role)? What factors are most important when considering talent ROI?

Hello Erin:  Our recommendation in determining P or L is based on a simple business/mathematical formula:  (labor expense – reduction in labor expense – operating expense + profit margin = P or L).  Your question about ROI, specifically in regards to training and a project based role will have to be determined on the labor expense divided by the training dollars invested.   A specific example that quantitatively made an impact was with a client that that invested in sales training.  We calculated the dollars invested in the training, labor expense on the books and the amount of additional revenue that was generated after the training was conducted.  We then compared current investment in sales labor expense to return on investment for training and sales revenue generation.

Andrew asked: I’m curious when best practice might not be best for the organization: 

Hello Andrew: Best practices are not “best” for an organization when that practice does not align to your business strategy.  We’ve counseled many business leaders to critique best practices for lessons learned and creative solutions to solving their business problems.  There is not a “one size fits all best practice”.  The key is to “adapt” not “adopt” a “best practice” for your organization.  A best practice and/or approach that has been successful for one organization may not be the right practice and/or approach for another.  We believe that using “best practices” is an opportunity to have discussions relating to what practice or approach will generate success within your own organization.  This is based on the business problem/challenge you are trying to solve, your cultural and other strategic alignment considerations.

Sherryl asked: How aligned are these maturity levels with People CMM?

Hello Sherryl: Great question.  The maturity levels referenced (as part of the presentation) have no formal alignment with SEI’s People CMM (PCMM) framework. The maturity levels were qualitatively developed by The Newman Group based on our experience working with a diverse group of Fortune 500 companies and presented as a self-assessment tool. 

Len asked: How do you define competency vs. skills? Another word what is the deference between skill set and competencies?

Hello Len: Competencies are behavioral based and often come as a result of direct experience. Skills are often task oriented and can be easily trained. A good example is what I read on an IT blog some time ago – “being proficient in Excel is a skill whereas analytical thinking is a competency”. Some people are gurus at manipulating Excel spreadsheets but don’t know how to interpret the results.  Conversely, some people can analyze and interpret the data but don’t know how to fully utilize the spreadsheet.

Todd asked: Is there a difference between designing the organization around critical roles vs. operational requirements? I’m not clear what it really means to design the organization around critical roles.

Hello Todd:  We find that most organizations start their organization design with an org charts, job descriptions, and functional reporting relationships.  There is typically little if any dialogue with the business leaders to determine how best to achieve operational requirements.  Our point of view is that from an Organization Design and/or Workforce Planning perspective, you want to understand what jobs are most critical to meeting your business objectives.  There is no “vs.” between critical roles and operational requirements.  They must be aligned.  This boils down to the roles that have the most significance to achieving your business goals and objectives. You’ll want to define the roles that are critical today and into the future to ensure you’re aligning your talent to the business outcomes you want to achieve.

Sherryl asked: Do you find that HR execs are able to convey this “big picture” end to end TM focus, or do they still get hung up on facets, like OD, training, etc?

Sherryl: As a consultancy, we’ve been fortunate to work with some dynamic business leaders who have the ability to create a vision and therefore communicate an idealistic state – one that aligns all of the HR functionalities to business strategy, objectives and/or priorities. The majority of our clients (i.e. HR executives) understands and appreciates the importance of better engagement with their business counterparts and wants to integrate their delivery of HR services.  On the other hand, we know there is a lot of literature published about “getting a seat at the executive table”, “talent management”, “HR strategy” and “HR value propositions”.  While all this is information is helpful in the evolution of our impact as HR practitioners, we believe that the only way to truly impact the P&L is to quantify the our contributions to the business.

Brenda asked: Can you define CRM?

Hello Brenda: Apologies for the use of an acronym. CRM stands for a couple of things but in the context of our presentation and within the general recruitment industry represents “Candidate Relationship Management”. The activities and efforts that allow for relationships with candidates that can be maintained (effectively managed) over time.

Len asked: What are some of the key business measures that you have recommended to your clients?

Hello Len: We are often asked about metrics and more specifically metrics that actually make a business impact. Staffing.org and others maintain a strong opinion on metrics and what should be measured. We continue to see companies evaluating metrics like: Quality of Hire, Time to Contribution (or Competence). These metrics require data from multiple sources but begin aligning talent acquisition efforts with post hire activities (i.e. developmental planning, learning & development, etc).

Peterson asked: You mentioned early in the presentation that some large organizations are doing workforce planning very well. We have been looking at this topic for some time and have not seen anyone of our size ($16bil/85k employees) who is doing it well or in a systematic way. Can you comment on how they are doing workforce planning?

I’d start by saying that we feel workforce planning is the strategic aspect of talent management that will influence other (HR) functional activities such as talent acquisition, learning & development and succession planning. Our research validated that 1.) There is no universal definition and 2.) Many companies have attempted to do workforce planning on a large scale and have failed because a systematic approach was not taken. The late Thomas P. Bechet did great work in this area and provided several frameworks for doing workforce planning. The Conference Board published a report on several companies who doing workforce planning and has identified five approaches to workforce planning which included:

1.      Traditional (i.e. Headcount Gap Analysis)

2.      Workforce Analytics

3.      Forecasting & scenario Modeling

4.      Strategic Workforce Planning

5.      Human Capital Planning

Do you have questions or comments? Join the conversation here!