Salarycom h rcom_ppttemplatemar2609_final

Is Disjointed Data Blurring Your

View of Who to Retain or Fire?

5 Steps to Gaining Application Clarity and Better Decision-Making

Expert Advice from Paul D. Hamerman, Nora Costa and Nick Camelio

March 26, 2009

Agenda

• Introduction: Our Team of Experts

• The Situation

• The HR Dilemma

• Common Pitfalls and Causes

• 5 Steps to Fixing the Problem

• Getting Executive Buy-In

Salary.com presents the “HR Dilemma™ Series”

• Fictional cases that present common managerial

dilemmas

...and,

• Offer concrete solutions from experts on how to

resolve them

Introduction

Director of compensation at Iron Mountain, with over 25 years of experience as a business & practice leader in corporate HR, with proficiency in market pricing and skill- or competency-based salary structure design. Industries include business services, higher education, financial services, healthcare, and software.

Expertise: Compensation Management

Vice President of Human Resources and Talent Development at Salary.com, with over 16 years of experience providing HR leadership to technology companies – specifically in recruiting, compensation and benefits, learning and development, and employee retention.

Expertise: Strategic HR Functions

Leading industry analyst at Forrester with nine years of experience specific to business technology, evaluating: software vendor mergers and acquisitions, next-generation architectures, industry-specific strategies, & packaged application deployment models (including software-as-a-service).

Expertise: Enterprise Applications

Our Experts

Paul HamermanForrester Research

Nora CostaIron Mountain

Nick CamelioSalary.com

Source: “Current Employment Statistics Highlights”, Bureau of Labor Statistics, March 6, 2009 (http://www.bls.gov/web/ceshighlights.pdf)

The Situation: Drastic Loss in Jobs2008 US Job Losses Totaled 3 Million

Entire contents © 2008 Forrester Research, Inc. All rights reserved.

• Rising unemployment levels shine spotlight on HR

• Personnel costs represent 35% of total operating

expenses, on average.*

– RIFs, hiring freezes, deferred raises, and bonus cuts are

cost cutting measures in play.

• Companies need to know:– Who to retain — top performers and scarce talent.

– Which positions are variable for capacity management.

* Source: PricewaterhouseCoopers Saratoga

The Spotlight on HR


Base: 100 HR decision-makers

Importance

0%

9%

12%

37%

39%

3%

Not at all

Below average

Average

Above average

Extremely

Don't know/NA

Capability

3%

23%

34%

29%

9%

2%

Poor

Below average

Average

Above average

Outstanding

Don't know/NA

Q: “We objectively know which employees we need to retain, which employees wewant to promote, and which employees we want to manage out of the organization.”

Most Companies Don’t Know Which Employees to Retain, Promote, or Fire


Source: July 2008 Global Talent Management Best Practices Online Survey

Leading Pharmaceutical Provider

• 2,500 FTE

• 3 Global Offices (UK, Singapore, Tokyo)

• 15 US offices

• Annual compensation budget is roughly $250 million

• 15 Product Lines in US and 10 in Europe/Asia

The Acme Company

Claire, VP of HR at Acme Co.

Seasoned HR veteran with over 15 years of experience.

Responsible for US and global HR operations for 2,500 FTE

company. Has Team of 20 People. Working on consolidating

two operating divisions via acquisitions; manages multiple

homegrown and packaged point solutions.

Mark, CFO at Acme Co.

Fiscally conservative CFO. Responsible for HR, Legal and

Finance operations. Believes strong balance sheet is crucial to

company’s health. Believes in paying for results and strategic

use of technology to improve business operations. Investing in

sales initiatives to drive top-line sales growth inside US.

Our Cast of Characters

Mark and Claire review corporate objectives and set budget:

•Aggressively recruit in new sales positions in US

•Integrate 2 new acquisitions and critical sales positions in US

•Implement aggressive pay-for-performance plan across globe

•Build pipeline of strong leaders for key positions

•Manage to specific cash flow targets per quarter

March 2008: Strategic Planning

Tracking to goals

Market Collapses

Business Environment ChangesUnderneath Strategic Plan

Mark, CFO walks into Claire’s office:

• Implement hiring freeze and reduce payroll by 15%

• Must maintain high level of customer service, and...

• Stay competitive in our key focal areas

• Craft a plan to execute in next 30 days

The New Corporate Objectives

Claire’s team scrambles to craft the plan and reviews that data she has to work with:

• 3 HRMS systems for headcount, positions and salaries

• Excel-based submissions for remaining domestic offices

– Multiple performance input across company

• Performance ratings, potentials but no historical data

• Paper-based job descriptions, development plans with no competency data

The Patch Process

Compiling Org Charts

Aggregating Disparate Systems

Performance Reviews

Multiple HRMS directories

• Claire must pull together a recommended methodology and list:– No standard core system of record;

– Has to make over 5 phone calls to pull data requests across IT, Legal Compliances, HRMS directories, performance histories, learning updates & finance

– Team works overtime to aggregate, organize and validate data.

– Lack of executive awareness - most executives don’t realize they lack the ability and systems to pull the information together

• How can she pull it all together so executive leadership can focus on the best methodology and process, ensuring they make the best talent decisions to achieve their business goals?

Claire’s HR Dilemma & Opportunity

Expert Commentary

The Challenge: What Should Claire Do?

Causes and Pitfalls

• Multiple core HRMS solutions, lack of global HR data

• Outdated HRMS core system with manual processes

• Processes optimized around payroll, not HR

• Numerous best-of-breed solutions

Paul D. Hamerman

• The pain of patching together a view

• Turning the executive dilemma into an “aha moment”

• Window of opportunity to educate and pitch to senior

management and coordinate a plan that saves time

and money

Nora Costa

Administrative burden, time to patch vs. the focus on

strategic decisions

– Pre and post reduction

– How does unified data help through the aftermath?

Nick Camelio

5 Things You Can Do:

1. Go to CFO with business case

2. Calculate the cost of disjointed data

• # of man-hours to pull/aggregate across functions

• Impact of redeploying resources on strategic talent

decisions

3. Calculate the cost of multiple systems and vendors

• # of people and vendors to manage

• Cost to operate internally vs. leveraging SaaS options

Build Case for HR ROI

4. Quantify the impact of deploying best practices on CFO-

metrics:

• Revenue per employee and net income per employee

• Reduction in operating expenses vendor consolidation,

(SaaS)

• Improvement in reporting

• Lower employee turnover and replacement costs (time, $)

5. Develop a coordinated HR Applications Roadmap and ROI

Build Case for HR ROI …continued

Source: December 19, 2008, “Building Your HRM Applications Strategy” Forrester report

Total Economic ImpactTM (TEI) Frameworkfor HRM Applications Strategy


1. Develop a comprehensive HRM application strategy and business case.

– Anchor this strategy to business drivers.2. Build around a core system of record and integration

strategy.– Put in place a master data management strategy for

people.3. Supplement the core HRMS with best-of-breed solutions

where appropriate.4. Consider SaaS deployments to minimize upgrade

headaches.

HR Strategy & Roadmap Steps


1. Assess/inventory the applications

2. Analyze alternatives

3. Determine target architecture

4. Build roadmap

5. Develop a business case for executives

5 Steps to HR Roadmap



Forrester’s 5-Stage HRM ApplicationsStrategy Methodology


• Review HRM and business strategies.

• Assess current apps and technology environment.

• Assess process capabilities.

• Determine gaps.

No.1: Assess Apps and Processes


Source: August 1, 2008, “Improve Strategic HCM Processes And Technologies” Forrester report

Illustration: Succession Planning Assessment Questions and Scoring Method


• Categorize application needs into retain, add,

replace, and enhance (RARE) buckets.

• Determine candidate suppliers.

• Evaluate deployment alternatives.

No.2: Analyze Alternatives



Retain, Add, Replace, Enhance (RARE)


• Articulate the vision for HRM processes and

technology.

• Define functional architecture.

• Identify technology characteristics and deployment

methods.

• Map integration and data management strategy.

• Define reporting and analytics standards.

No.3: Determine Target Architecture



HRM Apps Functional Architecture


• Define apps and process priorities.

• Determine project dependencies and timeframes.

• Define the strategic apps road map.

No.4: Build a Roadmap



Apps Roadmap Illustration


• Determine acquisition and implementation costs.

• Estimate on-going ownership costs.

• Estimate benefits.

• Assess risks and flexibility.

• Calculate Total Economic Impact™ (TEI).

• Package results for executive approval.

No.5: Develop a Business Case


• Use a five- to 10-year time horizon.• Understand the usage metrics

– number of users, frequency and intensity of use.

• Model SaaS costs against on-premise deployment, taking into account the full costs of on-premise upgrades, maintenance fees, internal support, and hardware.

• Adjust for inflationary increases and the time value of money.• Factor in risks, time-to-value, and flexibility.

– Faster deployment and lower up-front costs with SaaS– Higher implementation and obsolescence risk with on

premise– Flexibility depends on specific solution characteristics

Building the ROI Business Case



Total Economic ImpactTM (TEI) Frameworkfor HRM Applications Strategy


Thank You for Attending

Questions?

If we do not answer your question during the live event, please feel free to send any questions to Alison Kelly: [email protected], with the name of the speaker your question is for, and we will be happy to get back to you!

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