Session Title

Presented by: (First and Last name of presenter(s)

H O S T E D B Y :

The Role of Human Resources in Business Planning: Metrics, Measurements and Linking HR to

Financial Objectives

Bob FloreakPresident, Acuity Human Resources LLC

OBJECTIVES FOR TODAY

• Discuss the evolving role of the HR function in today’s business climate

• Review how Human Resources will provide leadership that affects organizational and financial efficiency

• Look at specific ways HR leaders and business leaders can drive business success

THE EVOLUTION OF HUMAN RESOURCES

• Industrial Relations to Personnel to Human Resources

• How we describe ourselves is not enough

THE TACTICAL ROLE OF HR

• Administration and files

• Compliance

• Policy

• Compensation and benefits

• Culture and employee relations

RECRUITMENT

• Advertising and job postings

• Scheduling interviews

• The HR interview

• Offers and onboarding

WHAT IS THE TRADITIONAL ROLE OF HR IN BUSINESS OPERATIONS?

• How many CEO’s have come through the HR function?

• How many HR leaders report to the Finance function or another functional area?

• How does HR “get a seat at the table?”

THE BUSINESS OF HR

• Administration cannot be avoided

• Seats at the table are not granted

• HR must contribute to the financial and strategic objectives of the business

SOME OF THE BIGGEST CHALLENGES FACING BUSINESSES ARE HR RELATED

• According to the Allegheny Conference, the region’s workforce will be 80,000 short by 2025

• A recent McKinsey Global Institute whitepaper suggests that by 2020, the world will have 40 million too few college educated workers and up to 95 million workers that lack the skills needed for employment

SOME OF THE BIGGEST CHALLENGES FACING BUSINESSES ARE HR RELATED

• The changing work demands of the Millennial generation

• Increased focus on mandated benefits and government regulation

• Demand for more highly skilled workers, particularly in specialized skill positions, will increase the stress on finding employees

WHAT CEO’S NEED FROM HR PROFESSIONALS?

• Solutions to business problems!

WHAT ARE THE PROBLEMS?

• Decreased productivity

– Labor shortages

– Skills gaps

– Management effectiveness

– Compensation management mistakes

• Executive leadership challenges– Unprepared or ineffective leadership

– Succession planning

• Lack of organizational alignment

HOW DO WE AS HR LEADERS ADDRESS THESE ISSUES?

VISION LEVEL

• Can be outside of HR (and all functional areas of the organization)

• Driven by the marketplace, competitors, investors and stakeholders

• Long-term and intermediate-term focus

• Mission, vision and values

• Drives the creation of an HR business plan aligned to business goals

STRATEGIC LEVEL

• HR audit

• Capabilities determination

• Organizational structure assessment

• Resource management and needs determination

• Success management

• ROI expectations integration

PLANNING LEVEL

• GAP analysis between business objectives and staff/structural resources

• Recruitment plan

• Training plan

• Communications plan

• Compensation plan

• Change management plan

• Leadership development plan

TEAM MANAGEMENT LEVEL

• Competency modeling

• Performance management

• Employee assessments and engagement

• Recruitment planning

SOLUTIONS LEVEL

• Outwardly focused

• Bringing in strategic suppliers

• Best practice evaluation

• Project planning

• Training delivery

HUMAN RESOURCES ALIGNMENT LEVEL

• The value-added component of execution

• Employee relations

• Total compensation planning

• Management tactical training

• Compliance

EXECUTION LEVEL

• Tactical HR areas such as:

– Handbooks

– Payroll

– Benefits administration

– Implementation of job descriptions

– Administration and record keeping

SO WHAT ARE THE PRACTICAL THINGS WE SHOULD DO?

• Focus on the vision and strategy level first

• Understand the broad business objectives of your company

• Work with the management team to understand where specific challenges occur in the business

ANALYZE THE STRUCTURE

• Look at your organizational chart

• The 3 legs of the stool

Sale

s

Ope

ratio

ns

Administration

ANALYZE THE STAFF

• HR is a critical function for business success

• Compliance is half the battle

• Changing demographics and business challenges necessitate that HR must participate in integrated business management

• If we don’t step up, others will

START THE VISION STAGE

• All initiatives emanate from this stage

• Look for opportunities for organizational realignment

• Create leadership development linked to business needs

TALENT FOCUS

• Work with Finance and Operations to develop a staffing plan

• Competency models are developed

• Implement pay for performance

• Create an employment brand and engage the entire organization in talent acquisition and retention

SOLUTIONS, ALIGNMENT AND EXECUTION

• Develop tactical HR solutions tied to higher level stages

• Job descriptions that are linked to recruitment, performance management and compensation delivery

• Policies that support culture and business objectives

• Educate managers on “why” compliance is important

• Compensation plans that are linked to vision and strategy level

• Training plans

MEASUREMENT, METRICS AND HR KPI’S

• Develop meaningful, “SMART” objectives for HR function

• Create metrics and KPI’s for HR

SAMPLE METRICS – GO BEYOND SIMPLE HEADCOUNT

• Sales per employee

• Total compensation as percentage of sales

• Total compensation as percentage of total expense

• Direct labor as percentage of sales

• Sales, general & admin expense (SG&A) as percentage of sales

• SG&A as percentage of total compensation

• Cost per hire

• Average retention (mean, median or distributed analysis)

• Specialized metrics for your business or industry

WHAT’S THE NEXT STEP?

• Develop your HR plan

• Ask for input from your business partners

• Work closely with Operations and Sales and others in Administration

• Develop your priority list

• Figure out how much time you can spend working “on the business” versus just “in the business”

WRAPPING IT UP

• HR is a critical function for business success

• Compliance is half the battle

• Changing demographics and business challenges necessitate that HR must participate in integrated business management

• If we don’t step up, others will

THANK YOU!

Bob FloreakPresident, Acuity Human Resources LLC

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