Human Capital Management in practise: getting startedMark GrimleyHead of HR & OD Business & Performance5th July 2007
Be able to resign. It will improve your value and do wonders for your performance. Donald Rumsfeld
Capital idea? Wealth in the form of money or property, used or accumulated in a business by a person, partnership, or corporation.
Material wealth used or available for use in the production of more wealth.
The remaining assets of a business after all liabilities have been deducted; net worth. n Et + Bt He = ∑ (1+i)t-p t=p
Human Capital Vs Basic performance principals Why are we doing this?
A bit about Croydon • London’s largest borough • 10,500 employees • 400+ sites • 350,000 residents • 120 schools • £793 million expenditure budget
The issues • Dominance of finance agenda • Metrics & data • Retrospective & backwards • Scepticism • HR credibility
The levers • £282 million per year • 23% turnover • No defined workforce • Staff survey • Low output and productivity indices
The biggest lever… …and hardest to move
Stepping up to HCM Base-lining Forecasting Permutations Cause understanding Trend report Benchmarking Correlation Reactive Sophistication & Impact Adapted from Mercer HR Consulting
The approach Systems, Process & Governance Workforce Readiness Business Strategies Business Inputs Business Results HCM Projections Benchmarking
HR measurements • Turnover / Retention / Absence • Competencies & training • Employee productivity • Workforce profile / movements • Employee engagement / attitude • Employee compensation & reward • Recruitment activity • Customer experience
Financial measurements • Revenue per FTE • Cost per FTE • Profit per FTE • HCM Return on investment • Remuneration vs. output • HCCI • Cost of improvement
Outcomes: Strategy & Planning • HR Strategy • Management • Employees • HCM Architecture • Workforce intelligence • HR Capability • HR Customer-Agency • HR Procurement
Tools to use • Balanced scorecard TM • PMS framework (EFQM) • Capital balance sheet • Diagrammatic schemas • Graphical representation • Joint financial statements • KEEP IT SIMPLE
Next steps • Increase benchmarking possibilities • London Council’s HCM group • Networks and best practise • Re-assessment • Annual HCM statement • Improved management information • Delivery of strategy
Beware when any idea is promoted primarily because it is "bold, exciting, innovative and new." There are many ideas that are "bold, exciting, innovative and new," but also foolish. Donald Rumsfeld