Early Findings and Best-in-Class Talent Management Metrics Oct 23 - Trends in HR... ·...
Transcript of Early Findings and Best-in-Class Talent Management Metrics Oct 23 - Trends in HR... ·...
© AberdeenGroup 2007
HRO - Early Findings
and Best-in-Class Talent Management Metrics -
Kevin Martin Vice President and Principal Analyst, Human Capital Management Aberdeen Group
October 23, 2008
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Workforce Management
Talent Management
Human Capital
Management
Workforce Planning
Workforce Compensation
Learning & Development
Succession Planning
Talent Acquisition
Employee Performance Management
Competency & Assessment
Onboarding
Benefits Management
Time and Attendance
Payroll Scheduling
Absence Management
Workforce Analytics
Source: Aberdeen Group, March 2008
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2008 HCM Benchmark Reports (published)
Onboarding (794) – January 2008 Time and Attendance (333) – February 2008 Recruitment Process Outsourcing (211) – March 2008 Total Compensation Management (453) – April 2008 Managing Employee Performance (927) – May 2008 Workforce Collaboration (275) – June 2008 Benefits Management (330) – July 2008 Talent Acquisition Strategies (622) – July 2008 Workforce Planning (250) – August 2008 Learning and Development (535) – September 2008
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Aberdeen’s “PACE” Methodology
Pressures: external forces that impact an organization’s market position, competitiveness, or business operations (e.g., economic, regulatory, technology, competitive, etc.) Actions: the strategic approaches that an organization takes in response to industry pressures (e.g. product/service strategy, target markets, go-to-market, and sales strategy) Capabilities: the business process competencies required to execute corporate strategy (e.g., skilled people, brand, market positioning, viable products/services, financing, etc.) Enablers: the key technology solutions required to support the organization’s business practices (e.g. development platform, applications, connectivity, user interface, training and support, etc.)
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Objective: Determine Best-in-Class Performance
Best-in-Class = top 20% of all organizations surveyed Industry Average = middle 50% Laggards = bottom 30%
Key Performance Indicators (for RPO):
Quality of candidates sourced Satisfaction rate of the hiring manager Candidate’s experience / satisfaction with the recruitment process
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- Why Outsourcing? -
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NOTE Aberdeen Insight - The 2008 Aberdeen Report
Survey of 4,568 business executives revealed…
“The ‘lift and drop’ mentality dominating outsourcing engagements in the past is being replaced by a partnership mentality in which
providers and end-users work together to add value to processes, improve efficiencies, and
decrease costs”.
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- RPO in 2008 -
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How RPO is Defined
RPO RPO –– By SizeBy Size
72%
19%
63%
31%
0%10%20%30%40%50%60%70%80%
Outsourcing of select aspects Outsourcing of the entire recruitmentprocess (from sourcing to assessing
to onboarding)
500 - 5,000 5,000+
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Top Pressures
RPO RPO –– FindingsFindings
55%
41%31%
21%10% 7%
44% 48%
27%
6%
22% 22%
0%10%20%30%40%50%60%
Lack ofinternal HRresources
Cost ofattracting/recruiting
newemployees
Meetanticipated
staffing levels(i.e.surge)
Inferiorquality of new
hires
Fast-changingindustry
Globalexpansion
500 - 5,000 5,000+
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Top Strategic Actions
RPO RPO –– FindingsFindings
32% 37%45% 47%
24%38% 36%
63%
0%10%20%30%40%50%60%70%
Strengtheninternal resources
whereperformance is
sub-par
Outsource specificHR functions
where cost andperformance are
sub par
Improvecompany's brand /
reputation as agreat place to
work
Focus key internalHR resources on
coreorganizationalcompetencies
Best-in-Class Others
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Knowledge You’ll Come Away With Today…
Early findings from Aberdeen’s November 2008 HRO research
Best-in-Class Talent Management Metrics
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- Early Aggregate Findings –
Aberdeen Group Research on HRO
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How Do You Define HRO?
64%
19% 14%3%
0%10%20%30%40%50%60%70%
Outsourcing of anyHR element
deemed necessary(“core” or “non-core” and notlimited to # ofelements)
Outsourcing of coreHR elements only (payroll, benefits,
compensation, andHR administration)
Outsourcing of theentire HR function
(end-to-endprocesses for allHR processes)
Don't know / Notapplicable
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Top Macro Pressures Driving HRO
43%38%
30%
0%
10%
20%
30%
40%
50%
Increased competitivelandscape
Compliance requirements(e.g. federal, state, union,
corporate, fair labor)
Current economic climate /uncertainty
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Top Internal Organizational Challenges
60%56%
43%
0%
10%
20%
30%
40%
50%
60%
70%
Lower costs of deliveringHR services
Allow HR organization tofocus on core business
objectives
Improved HR service toend-users (employees)
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Most Valuable Actions to Ensure HRO Success
53%
27% 26%
0%
10%
20%
30%
40%
50%
60%
Define agreed-toperformance metrics (in
terms of costs and services)that measure pre- versus
post-HRO results
Conduct frequent analysisof HRO program
effectiveness (withinvolvement from company
and provider)
Maintain frequent,scheduled communication
with HRO provider(s)
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Hurdles to Widespread HRO Adoption
47%39%
33%
20%
0%
10%
20%
30%
40%
50%
Proof of HR serviceimprovement
Proof of cost savings Ability to provideconsistent
acceptable levels ofservice from anoutside entity
Evidence of HRpersonnel’s ability to
make a morestrategic impact on
the organization
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Has HR Become More Strategic Since HRO?
50%
26%
12% 12%
0%
10%
20%
30%
40%
50%
60%
Yes Too soon to tell No Don’t know
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Determination that HR has Become Strategic
26% 25%22%
14%12%
0%
5%
10%
15%
20%
25%
30%
Performanceimprovement in
key talentmanagement
objectives
HR is invited toparticipate inkey corporate
leadershipmeetings
Performanceimprovement inorganization’s
operationalmetrics
Don’t know Other
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Elements Planned to Outsource
15% 20% 21% 26% 24% 30% 13%
15% 13% 15%
12% 14%
0%
10%
20%
30%
40%
50%
Employee performance management
Leadership development
Compensation management
Training / Learning
Competency and
assessments
HR Administration
CURRENTLY OUTSOURCE PLAN TO OUTSOURCE
87%
58%
62% 75%
47%
50%
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Aberdeen’s HRO Survey -live until Nov 4th -
www.aberdeen.com/survey/hro08hroa
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Talent Management
Best-in-Class Metrics
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The Talent Management Value Chain
Recruit Onboard Performance Mgt.
Learning & Dev.
Succession Mgt.
Offboard
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Best-in-Class KPI for Talent Management
√
Management bench strength
√
Positions filled internally
√
√
Employee satisfaction
√
√
√
√
√
Retention
√
√
Employee performance
√
√
Time to Productivity
√ Quality of Hire
S. Mgt L & D Comp ($)
EPM ONB TAS
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Best-in-Class Metrics
Succession Planning The priority is to look within and to look beyond the C-
suite
Employee Performance Clearly defined goals and
development plans are key
Onboarding Retention now trumps time-
to-productivity
Talent Acquisition “Quality” has the become the
gold standard
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Talent Acquisition
- Metrics -
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Metrics that Matter Most: Talent Acquisition
50%
40% 39% 37%33%
27%
40%46%
35%39%
26% 27%30%
41%
24%27%
19%
26%
0%
10%
20%
30%
40%
50%
60%
Quality of hire Time to fill /Time to hire
New employeeretention
Hiring managersatisfaction
Quality ofcandidate
Cost per hire
Best-in-Class Industry Average Laggard
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Top Three Metrics that Matter Most
49%
34% 34% 34% 33%35%
24%
37%33%
48%
0%
10%
20%
30%
40%
50%
60%
Quality of hire Quality ofcandidate
Overall hiringmanager
satisfaction
New employeeretention
Time to fill / Timeto hire
Non-HR HR
Source: Aberdeen – July 2008
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Quality of Hire
- Disaggregated -
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Top Four Indicators of Quality of Hire
81%69%
52%43%
65%56%
44%37%
51%39% 38%
29%
0%10%20%30%40%50%60%70%80%90%
How quickly the newhire performs on the
job productively
Retention rate of topperformers
Candidate's firstperformance review
rating
Character / personalvalues
Best-in-Class Average Laggard
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How Quality of Hire is Calculated
Source: Aberdeen – July 2008
72%
53%48%
42%
63%
55%
33%
44%
0%
10%
20%
30%
40%
50%
60%
70%
80%
How quickly the new hireperforms on the job
productively
Retention rate of topperformers
Character / personalvalues
Candidate's firstperformance review rating
Non-HR HR
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Onboarding
- Metrics -
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Best-in-Class Metrics: Onboarding
Best-in-Class Retention Rate for New Hires = 87%
Completion Rate for Onboarding Tasks = 56%
Time to Productivity for New Hires = 45%
Laggard Retention Rate for New Hires = 48%
Completion Rate for Onboarding Tasks = 16%
Time to Productivity for New Hires = 9%
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Metrics Defined – more details
Time-to-Productivity Must be job-role specific Must be tied to key performance objectives (reinforced in quarterly reviews) For example – a sales person who is able to begin calling prospects earlier will improve their quota achievement and customer satisfaction
New-Hire Retention Measured at 1, 3, 6, and 12 months
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Metrics that Matter Most
73%
52%
42%
61% 58%
30%
0%
20%
40%
60%
80%
New employee retention New employee productivity Company reputation / brandin recruiting top talent
HR Non-HR
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Performance Management
- Metrics -
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Metrics Assigned to Performance Management
76%
61% 58%
48%43% 42%
61%
42%51%
32% 31%27%
54%
37%43%
29%25% 25%
0%10%20%30%40%50%60%70%80%
Employeeperformance
Employeesatisfaction /
morale
Employeeretention
Percentage ofgoals attained
EmployeeEngagement
Revenue peremployee
Best-in-Class Industry Average Laggard
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How Employee Performance is Measured
72% 69%
48%40%
61%
75%
46%37%
57%
72%
34%29%
0%
20%
40%
60%
80%
Percentage of goalsattained
Ratings in job-specificperformance reviews
Ratings in project-specific performance
reviews
Efficiencies produced(i.e., decreasedproduction time)
Best-in-Class Industry Average Laggard
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Succession Planning
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Succession Planning Defined
A combination of process, tools, and disciplines that enables an organization to plan for anticipated leadership needs as well as identify, develop, retain and allocate key talent.
PrePre--hire through Posthire through Post--hirehire
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Best-in-Class Metrics: Succession Planning
Best-in-Class % of Key Vacancies Filled Internally = 63%
Bench Strength = 49% % of positions w/ qualified and willing successor
Performance of Successor = 40% In terms of results and leadership
Laggard % of Key Vacancies Filled Internally = 29%
Bench Strength = 21% % of positions w/ qualified and willing successor
Performance of Successor = 21% In terms of results and leadership
43 • © AberdeenGroup 2007
Q & A
44 • © AberdeenGroup 2007
Thanks for your interest in Aberdeen’s research!
Kevin Martin Vice President and Principal Analyst,
Human Capital Management [email protected] 617-854-5314