Category Archives: Business Success

Workforce Reporting and Analytics

A great deal is written for and about HR’s agenda in the “post recession” economy and world.  Everyone has an opinion.  To be honest, sometimes it’s a little tiring.

Because I try to stay on top of the key issues facing organizations and the management of their talent to achieve business success, I read all the reports.  So when I ran across yet another report titled Human Capital Trends 2012, I steeled myself for another rote discussion of becoming strategic, immersing the function in social media, yada, yada, yada.

Imagine my delight, when I started reading and found an actually interesting and useful report from Deloitte.  Really.  Download it here and read it.

Deloitte identifies key business trends facing organizations in 2012.  Key trends include:

  • Growth is the top priority for many CEOs this year.
  • Developing the next generation of leaders to drive future growth is a nearly universal need.
  • People risk is a risky business so HR’s role in managing enterprise risk is expanding.
  • Advanced tools are turning workforce data into powerful insights that help businesses navigate uncertainty.

There are several additional trends called out and discussed, but I found the treatment of these particularly useful.

The discussion of the ability of workforce reporting and analytics to help make better, more informed decisions about people was easily understandable — for once.  For instance, I think the chart below is one of the most easily understood diagrams of how tactical reporting can lead into predictive analytics.  By breaking it down into three categories even emerging HR professionals can grasp the concept and context of predictive analytics:

  • What is happening?
  • Why is it happening?
  • What might be happening?

As far as maturity models go, this one is a winner!

I think you’ll enjoy the entire report.  It’s full of high level trends that all HR professionals will recognize as well as practical approaches to combat, overcome or exploit them.  Get a cup of coffee, your highlighter, and check out this report.

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Filed under Analytics, Business Success, Deloitte, HR Data, Predictive Analytics, Workforce Reporting

Decreasing ROI on Human Capital

PwC Saratoga publishes an executive summary every year that picks out noteworthy new data from its US Human Capital Effectiveness Report.  The report covers more than 200 unique metrics related to the effective management of human capital from more than 300 organizations in 12 industry sectors.  The average organization in this year’s report has yearly revenue of $5.5 billion and 19,500 employees.  While PwC Saratoga gathers information globally, this report covers data from US operations only.

This executive summary is not a difficult read – it includes some case studies – and it contains some pretty sobering statistics.  For example:

The revenue per FTE (full-time equivalent) has been declining steadily since 2008 –  by 18% — and has only marginally improved over 2006 levels. During the same time period, labor cost per FTE has grown nearly 14%:

It doesn’t take an MBA to understand that when costs rise and revenue falls:  you have a big problem.  And when labor costs rise and productivity declines, HR has a big problem.

The continued growth in labor costs per employee could be surprising to some given the relatively flat increases that trended during the recession.  According to this survey data, however, even during the darkest days of the recent recession, compensation costs per FTE (without healthcare or other benefits) increased year over year.  Surprising no one, though, health care costs increased year over year with the exception of 2009-2010.

The bottom line is that while the all-in cost of labor is going up, the revenue produced by that labor is decreasing, thus the diminishing ROI of human capital in the U.S.

While this might look like bad news for HR – do they really understand the dynamics of business? – it actually creates the beginning of the business case for increased investment in workforce planning, productivity and engagement.

Turning these trends around will take clear-eyed assessments of the current state, deep knowledge of solutions and the ability to connect the dots between multiple organization and environmental dynamics, compelling fact-based business cases for new investment and the courage to take bold action.

Want to be a strategic business leader?  This may be your best opportunity yet!

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Filed under Average Wage, Business Case, Business Success, China Gorman, Connecting Dots, FTE, Full Time Equivalent, HR Credibility, Human Capital ROI, PwC Saratoga

Is Your Workplace Engaged?

My friends at Achievers are collecting applications for inclusion in the 2012 Achievers 50 Most Engaged Workplaces™ Awards. As an HR business leader you should think about applying. Today. Because time is running out.

The process is not onerous and even if you don’t win – it’s a highly competitive and influential list – the process of answering the application questions will get you thinking and focusing on what you need to do create an engaging workplace.

Achievers, the leading next-gen solution provider in the Rewards & Recognition space, has identified Eight Elements of Employee Engagement™:

  1. Leadership
  2. Communication
  3. Culture
  4. Rewards and Recognition
  5. Professional and Personal Growth
  6. Accountability and Performance
  7. Vision and Values
  8. Corporate Social Responsibility

The questions in the application survey ask employers to comment on their programs, policies and structure around each of the eight elements. In some cases, as in the Vision and Values section, the survey asks how your organization handles behavior that is NOT in line with a core value.

Each answer can be no more than 250 words, so the survey won’t take hours to complete – but will require thought in order to be both comprehensive and brief.

Previous winners have included organizations as diverse as ADP, Walt Disney World Swan and Dolphin Resort, North Shore-LIJ Health System, Glassdoor.com and E&A Credit Union.

The winning organizations will be notified on August 20 and the public announcement will be on August 27th, with the awards galas on October 25th in San Francisco (U.S. list) and November 14th in Toronto (Canada list).

Achievers has a strong history of research and analysis in the engagement arena and is a strong go-to source for current data and thinking on how engaged workforces outperform their unengaged peers.  Check out these white papers here and here.

Winning an award like this is great. Being able to declare to your talent community and other stakeholders that you are an organization publicly recognized for its effective focus on creating a culture and environment focused on employee engagement is pure gold. Apply here before time runs out to be included in the 2012 list. And good luck!

*Full disclosure: I’m one of 6 judges who will determine the final winners.

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Filed under 50 Most Engaged Workplaces Award, Achievers, Business Success, Engagement, HR, Razor Suleman, Talent Community, Talent pipeline

The Wisdom of CEOs

Booz & Company recently published its 12th annual CEO Succession Survey. It’s fascinating reading:

  • As the economy gets stronger, the numbers of CEOs leaving their jobs are rising to pre-recession rates
  • CEO turnover is highest at the largest companies
  • CEO turnover is highest in market sectors that face the most challenges
  • Outsider CEOs returned to historical averages
  • Insider CEOs bring higher returns
  • Insider CEOs serve longer
  • The combined chairman-CEO model continues to decline

With average CEO tenure declining, the survey’s data are clear that new CEOs – whether they come from the inside or the outside – are under historically high pressure to perform quickly.  (Can you say Leo Apotheker?)  And concerned boards are more frequently appointing the outgoing CEO as board chairman to provide a sort of “apprenticeship” experience in the early months of a new CEO’s tenure.  Interesting stuff.

This year, the study focused on the new CEO’s first year.  Booz & Co. interviewed a number of CEOs from around the world and asked their advice for incoming CEOs.  There were 7 common recommendations:

  1. Deal with the obvious executive team changes as early as possible
  2. Be wary of changing strategy too quickly, even if you think the current strategy is wrong
  3. Make sure you understand how every part of the company operates and how it is performing
  4. Build trust though transparency
  5. Be selective in listening to advice
  6. Find a sparring partner with whom you can discuss plans openly
  7. Manage your time and your personal life with care

The survey provides a great deal of background data and commentary on these 7 “tips” for succeeding as a new CEO — and I encourage you read it.  But I’m thinking this is great advice for any new executive at any level.

And I’m really thinking this list is great coaching for HR.

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Filed under Booz & Company, Business Success, C-suite, CEO Tenure, CEOs, China Gorman

Data Point #8: Risk of talent and skills shortages

I recently came across a fascinating report published by Lloyd’s, the world’s leading market for specialist insurance.  Lloyd’s Risk Index is based on a survey of global business leaders by the Economist Intelligence Unit (EIU) and Lloyd’s.  It’s the second of its kind, the first having been published in 2009.  The survey is global and breathtaking in its scope.  It measures the top 50 Priority Risk factors for business – as identified by business leaders – as well as measuring how prepared businesses are to face these identified risks.

The headline for this survey is that business has gone from identifying credit as one of the biggest business risks in 2009 to focusing on talent as one of the biggest risks in 2011 and beyond.

As I read the report (see it here), I am struck that in the top 50 individual risks, as many as 12 have to do with people:  talent shortages, impact of regulation, demographic shifts, population growth, industrial/workplace accidents, changing legislation and others.

The respondent profiles are from more than 500 C-Suite executives (although it doesn’t look like CHROs were included) from large global enterprises.  The survey rated their attitudes regarding risk and their preparedness to face risks across five key categories:

  • Business and strategic risk
  • Economic regulatory and market risk
  • Political, crime and security risk
  • Environmental and health risk
  • Natural hazard risk

As the report explains, anything high on an executive’s risk priority list can be considered in terms of a potential critical point of failure of business.  So we’re talking big risks here.  Identified by board members and C-Suite executives in the largest global businesses in the world.

So of all 50 identified risks, guess what made the number two spot?  Talent and Skills Shortages (Including Succession Risk).  Woah.  Here’s what it looks like:

Talent and Skills Shortages — Priority and Preparedness by Region

The big headline for me is that more than 500 of the business leaders of largest businesses in the world agree that that the talent shortage is real.  That it’s big.  And it’s global.  And it threatens every business.

The second big headline is that this evaluation is being made by business leaders who do not identify themselves as HR Executives.  And that’s big.  If the board members and C-Suite executives of the largest enterprises in the world believe that the second biggest risk to their success is the looming talent shortage, then HR better be prepared with solutions for critical talent acquisition, retention and development.  And they better be prepared today.

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Filed under Business Success, Corporate Risk Management, Demographics, Economist Intelligence Unit, Lloyd's, Talent pipeline

Data Point #5: We Can’t Succeed Without Baby Boomers

In earlier Data Point Tuesday posts (here and here) I’ve recommended the Bureau of Labor Statistics’ website as a treasure trove of talent management related data.  Another great source of useful information is SHRM, the Society for Human Resource Management.

SHRM’s research group works tirelessly to bring relevant, actionable trend and survey information to its members.  And if you aren’t a member (why aren’t you?), the value of SHRM’s research services alone is more than the cost of membership. *

Workplace Visions is part of SHRM’s Workplace Trends and Forecasting program and is published multiple times each year – as new data become available.  The reports are useful signposts for new developments that impact organizations, talent management and HR professionals.

The first such report published this year is “Changes to Retirement Benefits:  What HR Professionals Need to Know in 2012” (member protected).  It’s full of useful observations about changes coming to 401(k) plan rules, Social Security changes to keep an eye on and great data from EBRI (The Employee Benefits Research Institute).

One of the discussion points piqued my interest:  data from EBRI about the reduction in confidence by Baby Boomers that they will have enough money in their retirement years to live comfortably.  See the chart below.  This has big potential impact for employers.

The aha! is that while a steady stream of Americans still plan to retire in their early to mid-60s, many more workers are unsure when they’ll be able to retire – or if they’ll be able to retire.  As you can see from the chart, in 2007 70% of EBRI survey respondents reported some level of confidence in their retirement plans.  That number fell to 49% in 2011.  SHRM also cites data from Towers Watson surveys with similar outcomes.

What does this mean for talent management professionals?  Well, SHRM thinks that providing a stronger hand in retirement planning and financial education for Baby Boomers will help reduce retirement-related anxiety.  I absolutely agree.

Additionally, though, SHRM counsels HR professionals to “weigh the positives and negatives of employing an older workforce.”   They counsel that “older workers are often costlier to keep on board, due to higher salaries and health benefits costs.” Woah.  The  thought that employers will have robust options besides Baby Boomers and other older workers to staff their organizations isn’t supported by the demographic trends.

My take is a little different.  Here’s what the data say:

  • the U.S. population is growing more slowly leading a more slowly growing civilian work force (http://bls.gov/news.release/pdf/ecopro.pdf),
  • the Baby Boom generation moves entirely into the 55-years-old+ age group by 2020 and will represent 25.2% of the work force (up from 13.1% in 2000)
  • the “prime-age” labor cohort (ages 25-54) is projected to drop to 63.7% (from 71.1% in 2000) of the work force

So the engagement, development and retention of Baby Boomers and other older workers will be a very critical part of most organizations’ talent strategies because they’ll make up 25% of the available work force.  Providing incentives to stay, financial education for pro-active retirement planning and unique engagement strategies — among others — will all be part of talent strategy in 2020.  There won’t be any weighing the positives and negatives of employing an older workforce.  But there will be significant effort spent in figuring out how to keep the Baby Boomers’ skills, talents,and  organizational knowledge in play in the work force — and in our organizations.

At 25% of the available workforce, there won’t be other options.  We won’t be able to succeed without Baby Boomers.

*Full Disclosure:  I am SHRM’s former Chief Operating Officer

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Filed under Baby Boomers, Bureau of Labor Statistics, Business Success, China Gorman, Demographics, Employment Data, HR, Retirement Planning, Talent Management, Talent pipeline, U.S. Department of Labor

Memo to HR: Raise Your Hands!

Several times this year I’ve given the wrap-up keynote speech at HR conferences.  This particular speech is titled, “HR Wake Up Call.”  The message is simple:  HR professionals have far more business savvy and leadership opportunities than they are given credit for.

One of the ways I prove this is to quiz the audience on a range of business related topics, testing their savvy and knowledge.  Nearly every question I ask gets an almost unanimous positive answer.  The questions cover topics like the current unemployment rate, the current U.S. GDP and the topics of current business books.

When I ask how many in the audience have ever been responsible for a sales quota, 70-80% of the audience raises their hands.  And when I ask how many have managed a P&L, between 80 and 95% of every audience raises their hands.

After the quiz is over and we discuss the answers in detail I ask how many of their executive teams know that they’ve been responsible for a sales quota or managed a P&L.  Astonishingly most do not.

I find that remarkable.  No.  Actually, I find it disturbing.  HR professionals routinely lament their lack of standing in the strategic workings of business, and yet when they’ve got the golden ticket they ignore it.

So here’s the deal:  if you want to be an HR professional who focuses solely on the tactical and compliance parts of HR, then don’t let on that you’re a business person.  Not letting your C-suite know that you’ve managed a business will ensure that you stay off their radar and can focus on the day-to-day stuff.

If, however, your organization can benefit from your business insight and experience, and you want to operate at a strategic level – not just the tactical level – MAKE SURE YOUR FULL BACKGROUND AND EXPERIENCE ARE KNOWN!

That is all.

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Filed under Business Language, Business Success, HR, Leadership, Uncategorized

HR and Furniture

Normally, I agree with everything Laurie Ruettimann says.  Not because I’m a robot, but because she’s right 99% of the time.  .9% of the time we just see things through different lenses.

And .1% of the time we just disagree.

And this falls in that .1%.

I think that when you’re in HR you have to speak the language of business.  I think speaking HR in business is the kiss of death – or irrelevance, which is really the same thing.

It’s not about furniture, it’s about influence.  And when you’re influential you speak the language of those you influence.

Business people are everywhere in organizations.  They’re in Finance (where they speak finance and business).  They’re in Marketing (where they speak marketing and business).  They’re in Operations (where they speak operations and business).  They’re in R&D (where they speak r&d and business).  They’re in Sales (where they speak sales and business).  They’re in IT (where they speak technology and business).

Business people are most definitely at the top of the organization where the only language spoken is business.  So if you want to influence the people at the top of the organization – all those people whose job titles start with a great big “C” — you have to speak to them in their language, not yours.

This quote from Frank Romer says it all:

People will sit up and take notice of you if you will sit up and take notice of what makes them sit up and take notice.

The bottom line is that language is important.  Using language your target audience doesn’t understand ensures that you won’t be understood.  It also ensures that you will have no influence.  None.  Zero.

So if HR is to be influential and interact with a certain type of furniture it has to be fluent in the language of business.

Actually, I’m pretty sure Laurie Ruettimann will agree with me.

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Filed under Business Language, Business Success, HR, Leadership

If I could change one thing about HR…

My friend Michael Carty and his colleagues at Xpert HR in the U.K. (whom I have never met!) invited me to contribute to their blog series: If I could change one thing about HR…

Please visit my guest post there at http://www.xperthr.co.uk/blogs/employment-intelligence/2010/12/china-gorman-if-i-could-change.html



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Filed under Business Success, China Gorman, HR, Leadership, Uncategorized, Xpert HR

What’s an unconference like, anyway?

 

I’m really getting jazzed about RecruitFest! in Boston on October 7th and 8th.  RecruitingBlogs.com has put together a track leader line-up that looks outstanding, Monster is the big sponsor, and it’s Beantown!  How much better could it possibly get?

I have a sense of what an unconference is like and I’m eager to experience it for the first time.  I’m expecting lots of smart recruiting and talent management professionals to roll up their sleeves and dig in to some really important topics with energy and passion.  The power of focused, collective experience to generate new ideas can be awesome.  Hope we get some of that going.

 Here’s what I hope we don’t do:  have the same endless and pointless discussions about whether HR is ever going to get a seat at the table (man, I hate that phrase), or whether recruiting should be part of HR. 

 I hope we focus more positively…more hopefully…more meaningfully on what we actually can do differently to impact the performance of our organizations.  I hope we focus on what is in our power to control:  our intentions, our behavior, our risk taking.  Because if all we’re going to do is lament our lack of power and our inability to catch the eye or ear of the CEO we’ll have wasted precious time and energy. 

 I’m interested in having conversations that change behavior, that improve performance and that make us (whoever we are) more powerful.  That will be a great investment of time and energy.  That will be a great unconference. 

 Are you with me?  If so, then you should click here and register right this minute!  Because if you register before the end of the week, you’ll get a discount (use the code “chinagorman”) and you also might win the Monster VIP hotel package!  What a deal. 

I hope you’ll join us, roll up your sleeves and contribute to two days that really could change HR.  Who wouldn’t want to do that?

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Filed under Business Success, China Gorman, Culture, Engagement, HR, HR Conferences, Uncategorized