Unleashing Human Capital to Drive the Next Wave of Growth

1. Unleashing Human Capital to
Drive the Next Wave of Growth
Anna-Lucia Mackay & Anthony Sork
www.hcmglobal.biz
HCM Global Pty Ltd © 2003 1

2. HCM Global Pty Ltd © 2003 2

3. AGENDA
• Understanding Human Capital Management (HCM) as a strategic
driver of enterprise growth
• Best Practice HCM programs
• Integrating HCM infrastructure across the organisation
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4. TRANSITIONING HR TO HCM
• “Do more with less” has pressured a change to the structure and
purpose of central departments
• No longer can “administrative centres” exist without clear
contribution to the bottom line
• Corporate services now required to be consultative and strategic
• In the knowledge economy, attraction and retention of talent is the
key differentiator to business success
• To devise and successfully implement a Human Capital Strategy
that facilitates business performance and enables business growth
is the purpose of this corporate service today and into the future
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5. MCKINSEY REPORT – WAR FOR TALENT
The survey comprised of 400 corporate officers and 6,000 executives
from the “top 200” ranks in these companies.
• Only 33% of the 6,000 “top 200” executives strongly agreed that
their companies attract highly talented people
• Just 10% strongly agreed that they retained their high performers
• Only a paltry 3% said their companies “actually developed their
people quickly and effectively, or move low performers out quickly”
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6. THE CEO VIEW
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7. HOW ARE WE PERFORMING
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8. THE SCORE CARD
• Very good on the HR basics – Administration
• Key areas to improve:
– Recruitment
– Retention
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9. “The very definition of Human Capital is that it walks out the door
every evening, and exits permanently with an employee who
leaves a company.”
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Gary S Becker
Nobel Prize winning economist

10. HUMAN CAPITAL
Human
Capital
Ability/
Competency
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Intellectual/
Knowledge
Relationships
Internal/External

11. HUMAN CAPITAL MANAGEMENT MODEL
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EMPLOYER
OF
CHOICE
Source: HCM Global 2003
PEOPLE
PRODUCT
&
PROCESS
SYSTEMS
BUSINESS
STRATEGY
&
OBJECTIVES
HUMAN CAPITAL
MANAGEMENT STRATEGY
RETENTION
DEVELOP &
RECRUIT
Able to
Execute
Unable to
Execute
HCM

12. HUMAN CAPITAL MANAGEMENT
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13. ATTRACT
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14. WHERE TO START
• Who are you trying to attract?
• What talent do you know your organisation requires?
– Linked to organisation strategy and key objectives
• Profiling your targeted talent
• Understand what creates Employer of Choice status for your
targeted talent
– Note this varies across generations and industry
• Create an Employer of Choice strategy
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15. 2003 EoC Research
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John Galloway GM Classified, careerone
Human Capital October 2003
EoC selection criteria: all industries
31%
9%
16% 11%
19%
14%
Career development
opportunities
Management style and
structure
Prestige-local and
international perception
Salary and remuneration
Working environment and
company resources
Workplace culture

16. RECRUIT
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17. “Through the influence of skill specialisation, low unemployment rates
and the recognition of the value of people to the performance of
the business, the recruitment process has become as much about
candidates selecting the employer as the employer
selecting the candidate.”
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Debbie Loveridge
Divisional Director – Select Australasia 2003

18. CURRENT MARKET CONDITIONS
• Recruitment procedures and tools have become quite sophisticated
• Targeted selection has become very effective
• Our administrative strengths now threaten our ability to actually
achieve the desired recruitment objective
• Thoroughness of process has directly impacted length of process
• Length of process is one of the greatest influencers on candidate
decision making – The “you snooze you lose” effect
• There is a fine line between creating desire for a position and
creating a barrier of entry and a perception of bureaucracy
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19. BRAND VALUE
• The recruitment process will heavily influence your brand value
and brand power
• The recruitment process for successful candidates will either
facilitate or hinder the bonding process
• For unsuccessful candidates, a poor recruitment process can have
far reaching effects both on consumer perceptions and on future
talent attraction
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20. RETAIN
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21. EMPLOYEE BONDING CRITICAL TO RETENTION
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ROTATION/
CONTEXT
ORIENTATION
CORE/CENTRAL
MESSAGES
INCREMENTAL
LEARNING
90 Day
Critical
Period
Source: HCM Global 2003

22. EoC FOR EXISTING STAFF
• Many organisations focus their EoC strategy on attracting talent
based on current business objectives
• Many neglect the need to develop an EoC strategy that addresses
both attracting and retaining talent
• Most neglect the need to do this both based on current business
objectives as well as future business objectives
• Your desired Human Capital will change along with your business
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23. EoC STATUS AND BUSINESS GROWTH
1 yr
2 yr
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3 yr
4 yr
ff at S gni tsi xE
Targeted Staff
TIME
HCM Global 2003

24. THE PSYCHOLOGICAL CONTRACT
“Psychological contracts are implicit, involving an individual's beliefs
of reciprocal exchange between two parties pertaining to trust,
loyalty and the well-being of all involved.”
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SL Rousseau

25. 4 ELEMENTS OF THE PSYCH CONTRACT
1. Contract – Focus
• Willingness to go beyond the confines of the employment
contract
• Degree of focus on employer and job as source of
remunerative benefit alone
2. Perceived Equity
• Degree of perceived equity in the behaviour of the company
towards employees
• Inputs and outcomes
3. Involvement
• Degree to which an employee remains involved in and invests
in the activities of the company
4. Time-frame
• Expected length of employment relationship based on
intentions and perceived long-term prospects with the
employer
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26. INVEST IN PEOPLE DEVELOPMENT
• Many elements within your businesses will influence retention of
key talent – Watson Wyatt identify the following in their Human
Capital Index:
1. Recruiting Excellence
2. Clear rewards and accountability
3. Collegial and flexible workplace
4. Communications integrity
5. Prudent use of resources
• Key to your Employer of Choice strategy for desired, existing and
future talent and influencer of the Psychological contract is your
willingness to invest in people development
• Gen X and Gen Y demand it!!
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27. ORGANISATION LEARNING PATHWAY
MANAGEMENT
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• One of the easiest ways
to integrate a HCM
infrastructure across the
organisation is by
leveraging your people
development system
• Ensure you link people
development and career
progression
INDUCTION
FUNCTIONALLY SPECIFIC TRAINING
MENTOR/COACH
LEADERSHIP
EXECUTIVE

28. PEOPLE DEVELOPMENT AS HCM INFRASTRUCTURE
Some of your key objectives may include:
– To provide an environment in which all staff have the
opportunity to develop themselves as far as their ability and
desire will allow
– To design, develop and implement a comprehensive
organisation development program which enables development
for all staff across all positions and divisions within the
company regardless of length of service
– To develop talent from within in line with key organisation
objectives
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29. HCM AS A STRATEGIC DRIVER OF GROWTH
• Organisations that invest in their people are commonly associated
with higher revenues per employee
• Measurable HCM factors such as staff retention and absence due to
sick leave show a strong link to profitability
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Source: Global Human Capital Survey
IBM Business Consulting Services

30. www.hcmglobal.biz
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