Human Capital Planning Models

1. Human Capital Planning Models

2. Human Capital Planning • FCA Board in April 2011 released an advanced notice of a Proposed Rule to Promote Diversity in Business Planning • The Proposed Rule was posted in the Federal Register on May 25, 2011 • The full proposed rule would require: • Strategies to achieve diversity and inclusion (D&I) within the institution’s workforce, management, and governance structure, as well as an assessment of progress made in achieving greater diversity • Assessment of the strengths and weaknesses of the institution’s workforce, management, and governance structure • Description of the institution’s workforce and management succession • Each System institution to implement a marketing plan that describes the institution’s chartered territory by geographic region, types of agriculture practiced, and market segment • Marketing plan with strategies for providing the institution’s products and services to all creditworthy and eligible persons, with specific attention towards D&I within each market segment, as well as assessment of progress made in achieving greater diversity • Over 400 responses were received by FCA during the comment period; 70+ were from within Farm Credit; vast majority were from outside entities • A final regulation on business planning is expected in 1st quarter 2012

3. Human Capital Planning • This presentation focuses on the portion of the Proposed Rule that would change FCA regulations to require your institution’s business plan to include a human capital plan (see last slide for specific Proposed Rule language) • Expect increased focus on the human capital plan during FCA’s 2012 examination process • No plan ‘template’ has been published • Entities across the System are looking for guidance as they develop their 2012 business plans

4. Human Capital Planning • Consensus is to view human capital as a very broad issue • System opportunity to utilize www.farmcredit.com as a central repository for human capital & HR information / materials, and potentially for “discussion” capability • No common definitions of human capital planning, talent management, succession planning, workforce analysis, workforce demographics, etc.; terms are used interchangeably and often confused • Commitment among HR Leaders in the System to begin exchanging information/materials, and to strive toward common definitions

5. Human Capital Planning • A search for Human Capital Plan templates / guidance generated examples from government and not-for-profit organizations • Common elements found in sample plans follow a strategic business planning format, altered and applied to the human side of the business: • Environmental Scan • SWOT Analysis • Human Capital Strategies and Goals • Initiatives and Processes to Achieve Goals, such as: • Talent Management • Succession Management • Executive and Leadership Development • Recruitment and Selection • Diversity, Inclusion and Engagement • Training and Development • Reward and Recognition

6. Human Capital Planning Template provided by U.S. Office of Personnel Management (OPM) • Strategic Alignment – Human capital strategies are aligned with the mission, goals and business objectives and integrated into the strategic plans, performance plans, and budgets. • Leadership & Knowledge Management – Focuses on identifying and addressing agency leadership competencies so that continuity of leadership is ensured, knowledge is shared across the organization, and an environment of continuous learning is present. • Talent Management – Organization addresses competency gaps, particularly in mission-critical occupations by implementing and maintaining programs to attract, acquire, develop, promote and retain quality talent. (Gap analysis of demand (future) and of supply (current) against structure, roles, demographics.) • Performance Culture – Organization promotes a diverse, high-performing workforce by implementing and maintaining effective performance management systems and awards programs. • Accountability – Rigorously analyzes performance indicators (measures). http://www.chcoc.gov/files/HCMR_ReportTemplate.pdf

7. Human Capital Planning Government agencies customize the OPM’s template

8. Human Capital Planning Government agencies customize the OPM’s template • For each of these elements, the following are presented and discussed: • Definition of the element and why it is important • Current initiatives supporting the human capital element • Improvement goals • Supporting action strategies

9. Human Capital Planning NSF Human Capital Management System National Science Foundations (NSF) Mission and Strategic Plan Discovery Learning Research Infrastructure Stewardship • External and • Internal • Environmental • Drivers • E.g., Baby boomer • retirement wave • Dynamic workforce • Rapidly changing scientific & engineering landscape NSF Human Capital Vision & Goals • Workforce • Assessment • Current & Future Needed Functions: • Staffing Data • Workload • Required Competencies Workforce and Succession Planning Implementing Strategies Recruitment Development Retention Transition Human Capital Management Infrastructure Evaluation • http://www.nsf.gov/pubs/2008/hcsp2008/nsf_humancapitalstrategicplan_0803.pdf

10. Human Capital Planning Employers Refocus on Strategic Workforce Planning by Theresa Minton-Eversole, SHRM editor/manager, 2/22/10 “Strategic Workforce Planning is the formal process that connects business strategy to human resource strategy and practices – a linkage that is often missing – and ensures that a company has the right people in the right place, at the right time, and at the right cost. Planning … takes into account such factors as which skills will be critical to business success and which roles will be hardest to fill, as well as … human capital quantity, quality and ROI.” “High-value business insights come from data analysis: http://www.weknownext.com/workforce/report-employers-refocus-on-strategic-workforce-planning

11. Human Capital Planning Below is FCA’s language posted in the Federal Register 30280, Vol. 76, No. 101, on May 25, 2011, which addresses the Human Capital Plan. “Section 618.8440(b)(7)—Human Capital Plan Proposed § 618.8440(b)(7) would require institutions to include a human capital plan in their operational and strategic business plan. Proposed § 618.8440(b)(7)(i) would require the human capital plan to include strategies and actions to achieve diversity and inclusion within the institution’s workforce, management and governance structure and an assessment of the progress the institution has made towards accomplishing these strategies and actions. Proposed § 618.8440(b)(7)(ii) would require the human capital plan to describe the institution’s current workforce, management and governance structure and to assess their strengths and weaknesses. We believe such an assessment is a prudent human resources management practice that every employer should engage in to ensure long-term success. We expect that institutions are already undertaking such assessments. Proposed § 618.8440(b)(7)(iii) would require the human capital plan to describe the institution’s workforce and management succession programs. We believe that prudent succession planning is necessary to ensure the long-term success of an institution. These requirements would complement the guidance that has long been provided in FCA’s EM–530, which states that a sound human resources management plan must address the areas in which an institution will grow, decline or change as a result of alterations to the institution’s mission and function and how such alterations will affect staffing needs. Management succession plans should address levels ranging from middle management to the chief executive officer. The succession plan should be in writing and should include strategies for preparing candidates for succession. This proposed regulation would not specify the content of succession plans, but it would require that the succession planning be described in writing as part of an institution’s human capital plan. We would continue to use our examination function to ensure that the succession plan is adequate. We discussed above many of the strategies an institution could employ to achieve diversity and inclusion in its workforce, including its management. There are many resources that institutions can use to learn more about how to advance diversity and inclusion in their workplaces. We encourage all institutions to take advantage of these resources. We also want to draw attention to FCA Bookletter BL–009, which addresses the authority of Farm Credit banks and associations to appoint directors. In BL–009, we stated that bank and association boards of directors may appoint directors—both outside directors and ‘‘other appointed directors’’ (stockholders who are appointed)—for specific public policy purposes, such as facilitating diversity. We encourage all institutions to consider appointing directors for this purpose when feasible.”