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Whitepaper Definitive Guide to Strategic Human Capital Management Consolidating Strategic HCM Functionality to Optimize

Whitepaper

Definitive Guide to Strategic Human Capital Management Consolidating Strategic HCM Functionality to Optimize Your Workforce

In the realm of human capital management, there’s a new wave of thinking about what it means to be strategic and drive workforce effectiveness. Riding the leading edge of this wave are the savvy human resources executives, driving their organizations with a forward-thinking, strategic and integrated approach to human capital management. This new wave is commonly known as Strategic Human Capital Management (HCM).

At its core, Strategic HCM enables a whole set of so-called “cross-process” workflows, such as integrating recruiting and onboarding or pay-for-performance. They are cross process because they span the classic silos of HR to provide a more efficient, effective approach to human capital management. Below are a classic set of these cross-process flows enabled by a Strategic HCM solution and industry examples to which they can apply.

Talent Learning Workforce Payroll Management Management Management Management Learning development suggestions and
Talent
Learning
Workforce
Payroll
Management
Management
Management
Management
Learning development suggestions and
assignments based on competency gaps
Incentive compensation based on
Performance and schedule adherence
Demand driven talent succession, hiring,
and development plans based on gaps
Schedule based on employee compliance,
certifications and/or performance
Training schedules aligned with work
schedules

Typical cross-process flows for Strategic HCM

All Industries • Talent development for key strategic competency focus for company Services Industry •
All Industries
• Talent development for key strategic competency
focus for company
Services Industry
• Managing variable pay based on contract
assignments
Retail Industry
• Demand driven hiring of employees and contingent
labor based on optimized schedules
Healthcare / Manufacturing Industries
• Validating certification to operate a machinery before
assigning resource to schedule
Healthcare Industry
• Managing performance based on time spend with
patients and critical shifts

Industry needs for Strategic HCM cross-process flows

SumTotal’s end- to-end Strategic HCM solution enables businesses to track their workforces across the needs
SumTotal’s end-
to-end Strategic
HCM solution
enables businesses
to track their
workforces across
the needs of the
entire organization,
increasing the
visibility of budding
problems and the
efficiency of the
initiatives used to
solve them.

Definitive Guide to Strategic Human Capital Management

Definitive Guide to Strategic Human Capital Management At the highest level, Strategic HCM enables human resources

At the highest level, Strategic HCM enables human resources to effectively work with executive management to help create and execute the organization’s strategic goals by providing a single source of truth for all workforce-related questions. By providing one, unified employee profile across all HCM processes and making that information easily available for analysis and further correlation with business data, Strategic HCM solutions provide HR and management a true strategic planning tool. More importantly, this planning tool is integrated with all the cross-process HR systems that are needed to tactically execute all HR functions.

Strategic HCM Processes Workforce Strategy & Planning Perform to Assess to Acquire to Reward Develop
Strategic HCM Processes
Workforce Strategy & Planning
Perform to
Assess to
Acquire to
Reward
Develop
Onboard
(Performance
(Learning
(Recruitment)
Mgmt)
Mgmt)
Plan & Schedule
to Pay
(Workforce
Mgmt)
Profile &
Compliance
Core HR
Skills &
Social
(Expense,
Record
Competencies
Connections
Payroll, etc)
Basic Record
HR Transaction
Keeping
Management
ERP Finance &
Project linkage
Tactical HCM
Infrastructure
TransformationEnablement

The diagram above demonstrates the relationship between the Strategic HCM and tactical functions that HR classically executes. This paper focuses on the on the main transformative solutions that Strategic HCM can provide:

A Single Source of Truth

Acquire to Optimize

Perform to Reward

Assess to Develop

Plan and Schedule to Pay

Closing the Loop

Definitive Guide to Strategic Human Capital Management

Definitive Guide to Strategic Human Capital Management A Single Source of Truth – Centralized HR Information

A Single Source of Truth – Centralized HR Information

Oftentimes, as an organization grows, the various aspects of human capital management become the responsibility of disparate systems or groups. One consequence is that, over time, organizations develop silos of employee information, with each profile containing only the information required for the specific function. This can lead to inefficiencies and inconsistencies as changes fail to propagate completely throughout the company.

SumTotal’s Integrated Strategic Human Capital removes the ine ciencies and inconsistencies of siloed functions and
SumTotal’s Integrated Strategic Human
Capital removes the ine ciencies and
inconsistencies of siloed functions and
creates a clean profile with end-to-end,
real-time capabilities.
Employee Profile Mary Smith
Employee Profile
Mary Smith

By centralizing these functions in one integrated Strategic HCM solution, organizations are able to automate and connect all of the HR information. SumTotal empowers HR managers with the ability to maintain consistency, ensuring that all necessary parties have access to the same up-to-date information by managing one central profile for each employee. A centralized employee profile provides a single source of information on your talent pool’s information, skills and competencies. The result: providing HR and executives a closed-loop relationship between business and workforce planning and strategy.

Acquire to Optimize

Hiring a candidate to fill an open role is not the end of the process for a business. The onboarding process for a new employee is only complete when that person is satisfactorily productive in a new role. Accomplishing this in a timeframe that meets business needs often requires this candidate to be appropriately skilled and motivated, with a solid understanding how his or her actions affect company goals.

Definitive Guide to Strategic Human Capital Management

An essential feature of any complete Strategic Human Capital Management system is that it must allow HR managers to manage their talent pools proactively. Instead of only solving problems as they arise, a successful organization must be able to predict its own needs and act to promote priorities and actions that maximize the chances of success. With SumTotal Talent Management, managers can keep a finger on the pulse of their workforces, know an employee’s abilities to achieve optimal output, and understand employee weaknesses to guide training and hiring.

Bring in the Best - Making changes to your workforce can be risky and expensive, especially when hiring new employees. Having a complete set of information available allows HR managers to quickly and easily identify the best possible candidates for hire or promotion among all those available.

SumTotal Talent Management can help managers identify gaps in their workforce and guide them toward candidates who are skilled, trained, motivated and aware of how their performance drives the entire organization’s success. Combined with SumTotal Learning Management, organizations can get the best employee for the position on the job quickly and efficiently.

Optimize your Talents - Even given the appropriate information, it’s often far more efficient to optimize your talent pool than to increase it. Consider a situation in which an existing resource is dissatisfied with his or her employment and is considering leaving the company. Meanwhile, in another part of the organization, managers are struggling to fill a vacant position, and the delay is costly.

Without the visibility provided by a fully integrated Strategic HCM solution, the managers may never know that a potential candidate already exists within the organization, the source of the employee’s dissatisfaction or that the employee is dissatisfied at all. The company stands to lose a valuable resource and is still left with the task of bringing on a fully new team member to fill both vacant positions.

An integrated Strategic HCM system helps managers approach such issues multi- dimensionally. The visibility into the current workforce ensures that potential internal candidates are considered, and the individualized talent profile helps organizations prepare employees for advancement.

With SumTotal Strategic HCM, companies can nurture talent and maintain morale to limit attrition and prepare for future needs with an actionable leadership development plan outlined below.

Define Career Goals

Develop personalized

Perform Gap Analysis

Integrated goal mgmt.

training paths

Integrated performance mgmt.

Integrated employee profile

Integrated learning mgmt.

Integrated competencies

Integrated development planning

competencies • Integrated development planning Track potential Keep workers Form and enact detailed

Track potential

Keep workers

Form and enact detailed succession plans

Integrated succession planning

compensated in line

Integrated analytics

with performance

Integrated succession planning

Integrated pay for performance

Integrated analytics

National Service Company Ramps Seasonal Hires Up Case Study>> Knowing that its most prolific time
National
Service
Company
Ramps
Seasonal
Hires Up
Case Study>>
Knowing that its most prolific
time of business comes in the
last quarter of the year, a national
service company expands its
workforce annually from a core of
4,000 to a peak of 20,000 in a few
months and then back down. The
company needed a solution to
both find and manage this amount
of talent, particularly because the
temporary employees seemed to
keep losing track of their goals and
core employees were not effectively
able to transfer their knowledge.
These problems not only made the
new hire experience in learning
how things worked extremely
arduous and time consuming, but
also tended to create a system
of positional power for those who
did hold that knowledge, which
could diminish the company’s
representatives’ overall ability to
work cohesively toward a goal.
Using SumTotal Talent Management,
the company was able to develop
and disseminate requisitions for
candidates with specific skills. After
the HR department sourced and
filtered these candidates using
guidelines set out by the company
and held in SumTotal software, the
company’s priority was to onboard
the new workforce quickly so that
the employees were prepared to
meet business needs in a specific
timeframe. Instead of having an
HR department that had to invest
too many resources in managing
the bureaucracy that can come
with quintupling the workforce
seasonally, the department is able
to use SumTotal to find and develop
the necessary candidates to have a
profitable year.

2009 State of Global Talent Management

Definitive Guide to Strategic Human Capital Management

Perform to Reward

Perhaps the greatest measurable benefit in Strategic HCM comes from the relationship between performance management and compensation management. These two processes encompass the management, tracking and execution of the organization’s strategic and tactical business goals, as well as the management of the organization’s largest controllable expense and best resource – employees. The result of successfully linking these processes can drive real results across the business. In fact, SumTotal’s own external study of over 300 senior-level HR practitioners from around the globe showed that the integration of performance and compensation management processes correlated to a measurable reduction in voluntary turnover across their organizations.

Today, performance management has one the highest rates of automation of any HR process in organizations across North America and is becoming more common in other parts of the world as well. The prevalence of automation has also helped bring about agreed upon standards for goal and competency management and measurement. As a result, the move from simple “process enablement” to the more valuable “HR transformation” is in process at many organizations today.

Still, organizations lose the efficacy of perform to reward when their methods of planning and executing compensation management are extremely complex and customized – often done with desktop tools such as spreadsheets and documents. Without centralized management of the process, including a workflow and business rules engine, compensation management is often riddled with gaps and inconsistencies. The cost of these issues is high for the organization – both in financial terms and on employee morale and turnover.

Organizations frequently try to link compensation to performance ratings to enable a cultural transformation into a high performing organization. This “pay- for-performance” process often fails when organizations do not provide enough differentiation in merit and bonus amounts to effect the behavioral changes required to enable this transformation. When an organization only awards high performers a percent or two more than low performers, it does not provide the incentive for low performers to change their behavior or motivate high performers to continue performing at the highest levels. Best-in-class organizations implement an integrated performance and compensation management system, which uses performance ratings to drive pay guidelines. This ensures that high performers receive a larger share of the merit pool while increases for low performers are kept to minimum to maintain an appropriate budget.

SumTotal’s own external study of over 300 senior-level HR practitioners from around the globe showed
SumTotal’s own external study
of over 300 senior-level HR
practitioners from around the
globe showed that the integration
of performance and compensation
management processes
correlated to a measurable
reduction in voluntary turnover
across their organizations.

Assess to Develop

Whether an employee is newly hired or promoted, an effective training program is essential to minimize the time to productivity. Even existing employees benefit from continued training on new processes or responsibilities.

2009 State of Global Talent Management

Definitive Guide to Strategic Human Capital Management

Definitive Guide to Strategic Human Capital Management With a learning management system like the one integrated

With a learning management system like the one integrated into SumTotal’s Strategic HCM solution, organizations can streamline on-boarding and employ- ee development.

can streamline on-boarding and employ- ee development. Assessment Results - A company can assess an employee

Assessment Results - A company can assess an employee using a competency gap analysis for the current or future position, self-assessment, 360-degree assessment or a comparison of actual to expected or targeted results. Using one or a combination of assessment results provides a full scope of employee efficacy in current tasks or readiness for a promotion.

Knowing a workforce’s capabilities provides a variety of benefits. A company can plan to:

Develop the workforce further

Ensure compliance on training

Keep employees updated on newest product or service offerings

Measure the efficacy of learning initiatives

Make scheduling decisions according to position success

Determine if and when new hires are necessary to fill gaps

Development Plans - Employees are an investment, and the faster they become productive, the faster the organization sees returns. However, constantly reinventing the training process for each new resource, or occupying experienced employees with training tasks and the associated evaluation, increases the initial investment. Balancing these dynamic expenses can be difficult. Therefore, an effective training program must be repeatable, systematic, targeted and measurable to appropriately address the issue.

Whether an employee is in the onboarding process, maintaining compliance or is being developed into a leadership role, knowledge of their competency gaps, track records and company best policies are the first step in generating a plan. Integration of assessment and learning solutions allows for closed-loop development planning, where training plans are prescribed to leverage the learning catalog to fill identified knowledge gaps. This enables managers to create plans more quickly and

its Employees

Case Study>>

2009 State of Global Talent Management

Definitive Guide to Strategic Human Capital Management

increases employee engagement. Giving employees the chance to learn new skills is a large component in keeping an engaged and motivated workforce that

is working toward career development, so taking advantage of a solution that help

a company plan learning milestones will benefit the workforce and the bottom line.

Plan and Schedule to Pay

Without visibility into its workforce, an organization cannot optimize its processes and schedules. In order to make the best possible decisions regarding employee scheduling, a manager must be able to easily access each employee’s details while building the schedule itself.

With intelligent scheduling, the combined power of SumTotal Learning Management and Workforce Management allows managers to do just that; while creating or editing a schedule, managers can quickly pull the centralized employee profile to find the most appropriate match. By cross-checking employees’ certifications against the positions being scheduled, the application can prevent employees from being assigned to a role they’re not prepared for. These safeguards can be applied to the clock as well, preventing anyone without the proper certifications from punching in to an inappropriate position.

For example, consider the manufacturing organization that experienced repeated instances of employees assigned to jobs they were not certified to complete; an inefficient and potentially unsafe situation. The advanced clock technology provided by SumTotal helped this organization ensure that unqualified employees are unable to punch into positions they can’t complete, and SumTotal’s intelligent scheduling functionality prevents the employees from being scheduled to such tasks to begin with.

Knowing your Workforce - Whether planned or unplanned, workers are going to be absent. Employees may need time off for illness, vacation, family care or even to pursue their studies on an extended leave. In the past, organizations with a high population of shift workers may have felt the impact of absences sooner and more directly than organizations with salaried workers, but in today’s environment, where few resources are tasked with the work of many, worker productivity and business objectives have leveled that playing field.

When employees are absent from work, organizations face increased risks related to regulatory compliance, workplace safety, staffing guidelines and business performance objects. Also, organizations that need to use overtime or temporary workers to maintain the same output will feel the effects of diminished margins. From a payroll perspective, there are costs associated with employee absence. For example, time entry adjustments may be necessary when an employee takes time off, and unless you have an automated solution, adjustments can lead to costly errors.

With SumTotal Workforce Management, organizations can track employee schedules, work times and leave for accurate record keeping. Additionally, the system will track deviations from planned attendance, including such activities as late arrivals, early departures or not working on a scheduled day. These features will grant managers the time and information they need to keep their workforce running and help solve issues by clarifying trends.

running and help solve issues by clarifying trends. One of Europe’s most successful manufacturing companies,
One of Europe’s most successful manufacturing companies, Howden set an aggressive business goal to double
One of Europe’s most successful
manufacturing companies, Howden
set an aggressive business goal
to double revenues. To support
this goal, HR determined the
company needed to retain and
grow its engineering staff. The
HR team presented a business
case to executives to show that
an integrated talent management
solution could enable them to
reduce turnover and achieve a
strong return on investment. The
plan focused on creating a single
solution that would unify employee
information in one place, creating
a new hire training program and
creating a career path program to
help with succession efforts.
The implementation of SumTotal
Performance, Career Development,
HRMS and Learning helped to
improve time to competency
for employees and reduced
turnover costs for Howden. “The
SumTotal solution’s ability to link
together all the components of this
program into one system, from
new-hire information to scheduling,
e-learning and diverse content
management, really helped us
execute this program across the
globe successfully,” said Global HR
Operations Manager David Tough.
said Global HR Operations Manager David Tough. Fast Facts Industry: Manufacturing Countries: 17 Countries
Fast Facts Industry: Manufacturing Countries: 17 Countries Users: 3,800 SumTotal Product: Talent Portal Performance
Fast Facts
Industry: Manufacturing
Countries: 17 Countries
Users: 3,800
SumTotal Product:
Talent Portal
Performance Management
HR Management (HRMS)
Learning Management

2009 State of Global Talent Management

Definitive Guide to Strategic Human Capital Management

Closing the Loop

A company that plans to succeed in its goals must focus on activities and initiatives

that support growth and promote the bottom line. While the thought is simple, knowing what these activities are is another matter, and being able to track correlation and show hard data on them is harder still. Using a Strategic Workforce Analytics solution to overlay the components that make up Strategic HCM allows a company to roll up the data into a high-level view of the health of the company, all the way down to a granular examination of initiatives or employees.

In addition to seeing what is working well in a company, executives and managers

using Strategic Workforce Analytics can pinpoint problems and discover low- impact competencies using a combination of internally generated key performance indicators and external data. Being able to compare common data on a single dimension instead of piecing the information together across siloed modules means information is more accurate and accessible for actionable decisions. Strategic Workforce Analytics also allows organizations to combine business performance metrics, like sales and customer satisfaction data, with human capital management data on a single dashboard. This combination demonstrates the impact of human capital management initiatives on business performance data. The closed loop analytics capability of Strategic HCM enables transformation from tactical progress reporting to a focus on more strategic initiatives and impacts.

Using a Strategic HCM solution like SumTotal’s means that a company has access to best-in-class products that create a clear picture of business health and an easy roadmap to follow when selecting, developing, motivating and managing a workforce. With penetration into more than 50 percent of Fortune 500 companies, SumTotal has the depth and breadth of expertise to help your company apply the benefits of Strategic HCM.

to help your company apply the benefits of Strategic HCM. Analyst Reviews: …the broadest and most
to help your company apply the benefits of Strategic HCM. Analyst Reviews: …the broadest and most

Analyst Reviews:

…the broadest and most mature application suite in strategic HCM specialist space. SumTotal has established
…the broadest and most
mature application suite
in strategic HCM
specialist space.
SumTotal has established
itself as the market share
and mind share leader…
It seems clear to me that
the company certainly has
a strong leadership team
and a clear roadmap for
going forward.
“Most impressive was the
continuity of roles across
each of its applications
– it’s no easy feat to
maintain such consistency.
SumTotal is positioned to
keep growing its portfolio
and gain more customers
thanks to its common
application platform
and architecture, which
provide integration of
applications, processes
and information…In fact
only a few providers have
this breadth and depth”.

Definitive Guide to Strategic Human Capital Management

More Information

Guide to Strategic Human Capital Management More Information For additional information, send an email to

For additional information, send an email to connect@sumtotalsystems.com

About SumTotal

SumTotal Systems, Inc. is the global leader in strategic Human Capital Management (HCM) solutions that provide organizations with a new level of visibility to help make more informed business decisions and accelerate growth. Recognized by industry analysts as the most complete solution, SumTotal provides full employee lifecycle management, including a core system of record, from a single provider for improved business intelligence. The company offers customers of all sizes and industries the most flexibility and choice with multiple purchase, configuration, and deployment options. We have increased the performance of the world’s largest organizations including Sony Electronics (NYSE: SNE), AstraZeneca (NYSE: AZN [ADR]; London:

AZN), Amway (KUL:AMWAY), Seagate (NYSE: STX), Dell (NASDAQ:DELL), and Google (NASDAQ:GOOG).

For more information, or to request a demo, please call +1 (866) 768-6825 (US / Canada), +1 (352) 264-2800 (international) or visit www.sumtotalsystems.com

264-2800 (international) or visit www.sumtotalsystems.com Corporate Headquarters EMEA APAC SumTotal Systems,

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