5 reasons why it’s past time to revolutionize human capital management in project-based firms and 8 best practices to help you move forward

1. WHITE PAPER
The transformational
path to digital human
capital management
5 reasons why it’s past time to revolutionize human capital management
in project-based firms and 8 best practices to help you move forward.
TABLE OF CONTENTS
Reshaping our thinking about human
capital management
Whatdrivestheneedfordigital HCM?
Project-based businesses need to
lead the digital HCM revolution
Why lead the digital HCM revolution?
Because you can’t afford not to
5 Reasons You Need to Implement
Digital HCM Now
Best practices
2
2
3
3
4
5

2. 2WHITE PAPER: The transformational path to digital human capital management
RESHAPING OUR THINKING
ABOUT HUMAN CAPITAL
MANAGEMENT
Human Capital Management (HCM) is an essential
component of modern business strategy, especially, in
project-based firms that rely on their people to provide
value to the business. In project-centric firms, a skilled
and engaged workforce is the difference between winning
the work and losing to the competition.
For project based organizations like consulting firms,
architecture and engineering firms and government
contractors, the struggles with workforce capacity and
planning, employee engagement and talent acquisition
are real. Regardless of industry, these challenges can be
addressed with a digital HCM solution focused on the
needs of project-based firms. While some still strain to
see the ROI associated with the investment in an HCM
solution, they do so without considering the true cost
of not investing. When high turnover combines with
fast growth, HR professionals end up stuck in recruiter
mode, which makes it difficult to advance the people-
related strategic initiatives that would have a significant
impact on employee engagement and retention. These
two factors result in high employee disengagement and
turnover, lost productivity, and significant churn in the
organization as key talent heads for the exit.
Before setting out on the journey toward digital HCM
transformation, it is logical to start with a grounded
understandingofwhatHCMisandhow it adds tremendous
value to the firm. Human Capital Management is best
described as the core processes that affect the way an
organization acquires, develops, manages, and optimizes
its resources. These processes drive how employees
experience and interpret the employment relationship.
A human capital management strategy, when crafted
thoughtfully and carefully implemented, results in a
workforce that is engaged and more productive, which in
turn leads to improved profitability.
The staggering disconnect between the prioritization
and realization of employee engagement paints a clear
picture. Human capital is an enormously underutilized
resource. This gap also shows that the HCM strategies of
the past are obsolete. They do not align with the current
workforce or the challenges firms are facing. Lastly, this
illustrates that there is significant profitability to be won
by investing in employees.
WHAT DRIVES THE NEED FOR
DIGITAL HCM?
O.W.L.s (OLDER WORKERS LEAVING)
Older workers are departing from the workforce in waves
and leaving significant gaps in leadership. Most firms
struggle to implement effective succession planning
strategies and lack the tools to maintain and test those
plans. Still, up and coming leaders must be identified and
developed to take on these roles when the firm needs
them most.
THE LARGEST GENERATIONAL COHORT
For years we have heard that job-hopping millennials
have one proverbial foot out the door and are not worth
investing in. The oldest millennials are now in their mid-
30s and are becoming leadersandmanagersdespitetheir
negativepress.Interestingly,recentstatistics show that as
millennials age, they would prefer to stay with acompany
longerterm.Whattheyreallywantinordertodemonstrate
axiomaticloyaltyisanopportunityto grow, develop,
and advance within the company. Take note because
millennials will comprise three-quarters of the global
workforce by 2025.
Gallup found that 87% of
companies cite employee
engagement as being a top
priority, but only 15% are
actually engaged.

3. 3WHITE PAPER: The transformational path to digital human capital management
WELCOME GENZ
The oldest members of this generation are now in their
mid-twenties and joining the workforce. GenZ has grown
up with technology permeating all aspects of life. They
barely remember life before the iPhone, let alone what life
before the internet was like. They expect technology to be
fully integrated where they work and will be turned off by
less modern and less innovative firms.
WORKFORCE EXPECTATIONS
The workforce is changing fast. People are demanding
greater flexibility and have significantly higher
expectations about the employee/employer relationship.
People know they are the commodity and are starting
to act like it. Research is shining a light on a shift toward
alternative working arrangements like, contract, freelance,
and contingent work. The ability to leverage these types
of workers will be imperative to firms wanting to offer
competitive compensation.
GLOBAL BUSINESS PRACTICES
Technology continues to shrink the globe into
manageable segments and geographies that firms
can tackle. Outreach is expanding and so is ambition.
Employees delivering projects or engagements are
often spread across the globe and must be able to
collaborate and connect with the rest of the workforce
regardless of location.
PRODUCTIVITY GAP
Normally productivity gap refers to the sustained
difference in measured output per worker between
nations. The term can be applied at the micro level
to the difference in output per worker between two
competing firms. This is where it gets interesting. In the
US, it is estimated that lost productivity due to employee
disengagement among millennials is valued at over $30.5
billion annually. What if a few firms figured out how to
tap into that lost productivity by increasing employee
engagement by just 10%?
Strategic Human Capital Management is not a new idea. It
has been discussed, dissected, and circulated by HR and
Organizational Behavior professionals for more than a
decade. With this much interest, why is it taking so long for
the market to respond and adapt their thinking; especially,
in project-focused firms where people and knowledge are
tremendous differentiators?
PROJECT-BASED BUSINESSES
NEED TO LEAD THE DIGITAL HCM
REVOLUTION
For project-based businesses, HCM plays an even more
significant role. Firms are struggling to find qualified
talent. Positions remain open for more than 60 days
while project work waits and other employees step in to
fill the gaps. Project delays mean unhappy customers
and ultimately, lost revenue. The combination of labor-
intensive processes, difficulty locating talent, and lost
productivity has consistently made talent acquisition one
of the most expensive business processes for project-
based firms.
Workforceplanning isdriven bytheneedfortheright
person, with therightskills, tobeavailableat theright
moment in ordertodeliverafantasticproject. Established
project-basedbusinessesuseskillsrepositoriestohelp
themmanageresources.Firmsthat don’t haveaskills
repository(only43% offirmssaytheydo), areunable to
forecast theirtalent needs. Theystruggletomanage the
workforcewhen theyshouldbefocusedon optimization.
Tomasterworkforceoptimization firmswill needtoanalyze
people, processesandsystems, interpret theanalysis and
predict current andfutureresourceneeds.
WHY LEAD THE DIGITAL HCM
REVOLUTION? BECAUSE YOU
CAN’T AFFORD NOT TO
In this new globally and technologically connected world,
people are the real commodity. Companies like Uber
and AirBnB, have disrupted the travel industry without
owning any cars or hotels. How did they do it? First and
foremost, they realized that a network of people is more
valuable than a warehouse full of consumer goods.
Valuations of these types of companies can be as much
as forty times projected revenue. Why? Because this

4. 4WHITE PAPER: The transformational path to digital human capital management
type of business model creates more value. Though few
companies can operate like Uber, there is still a nugget
of wisdom that transcends the business model. People
drive value and groups of people working together drive
the most value of all. The people who participate in
Network Orchestrator business models, like Uber and
AirBnB, are the same people working on your projects.
Why is this relevant? Simple, with well over half the
global workforce disengaged, think of the underutilized
resources. Engaging your people with a comprehensive
digital HCM strategy is the new way to strike oil.
5 REASONS YOU NEED TO
IMPLEMENT DIGITAL HCM NOW
1. THE COMPETITION HAS ALREADY INVESTED
The competition is facing the same challenges with the
workforce, but they are already increasing investment
in a digital human capital management strategy. Firms
that are making the investment experience more
growth, higher levels of employee engagement, and
increased productivity.
Greater agility: These firms are able to quickly scale
and adapt to changes in the marketplace faster because
their workforce is engaged and alert. These firms
are moving beyond workforce management toward
workforce optimization.
Faster recruiting: The time it takes from job requisition
to hiring (time-to-fill) and the time it takes to get a new
hire ramped and billable (time-to-billable) are key metrics
that are being benchmarked and tracked. The firms
that have been able to turn acquisition into a ‘well-oiled
machine’ are consistently reaching the top candidates
ahead of the competition.
2. GO FROM GOOD TO GREAT
Originally printed in 2001, Good to Great by Jim Collins
is still a relevant read, even if the examples are a little
dated. Many great companies still struggle to cross that
threshold into lasting greatness. While it may not have
been important in 2001, a digital HCM strategy is as
important as any other strategic initiative in the project-
based firm today.
People: Firms that understand the link between people
and greatness are already a step ahead. There are a
limited number of positions in any firm. Every person
needs to be aligned with the vison of the firm and share
common values. Jim Collins also suggests that technology
is an accelerator for companies already on the right track.
A digital human capital management strategy will do
exactly that, propel the company forward by helping to
recruit the right people, get them into the right positions
in the firm, and increase their value through learning
and development.
Succession Planning: The ability to assess the workforce
and prepare future leaders is the key to maintaining
greatness through the succession of leadership. No firm
should ever rely on a single leader to hold together a team,
or worse the entire organization. Firms that recognize
and develop the entire workforce will have an edge as
generations of employees enter and exit. These firms
will be able to gracefully weather the churn caused by
turnover and changes in leadership.
3. CUSTOMERS THRIVE (AND
PROFITABILITY SOARS)
Disengaged employees outnumber engaged employees
by a rate of about 2-to-1. How much momentum are
organizations loosing as a result of this disengagement?
As a start, billions of dollars are lost annually as
productivity (and profitability) suffers. This is not
exclusively a recruiting problem, it is a post-hire problem.
Investment in employee engagement is a much better
use of scarce HR budget dollars than constant recruiting.
Customer satisfaction:An articlepublishedbyForbes as
farbackas2014calledemployeeengagement the wonder
drug forcustomersatisfaction. Theauthorsitesresearch
fromtheJournal ofOccupational andOrganizational
Psychologythat establishescausalitybetween employee
engagement andcustomersatisfaction. Thestudyfound
that employeeengagement hadagreaterimpacton
businessperformancethan thereversescenario.Boosting
employeeengagement will improvecustomersatisfaction
andloyaltyandbyextension, profitability.
Profitability:Employeeswhoarealignedwith the
companyvision caremoreabout howtheirwork

5. 5WHITE PAPER: The transformational path to digital human capital management
impactsthefirm.Highlyengagedbusinessunitsrealize
a 41%reductioninabsenteeismanda17%increasein
productivity.Inshort,theyshowupmore,producemore,
andcontributemoreallwhiledemonstratingtheirloyaltyto
themissionandvisionofthecompany.Thesameresearch
conductedbyGallupalsoshowedthattheprofitability
producedbyanengagedteamis21%higherthanthat ofa
disengagedteam.
4. SYSTEM INTEGRATION
There is a clear benefit to housing ALL information on
one platform with seamless integrations. Integrated
technology is part of the solution to improve acquisition,
development and project management, but HR has not
reached that point yet. Only 32% of organizations have
integrated HR systems with ERP systems.
Remote workforce: Many project-based firms require
travel to customer locations to conduct project work.
Employees are often segmented into teams and only
see one another during occasional company events.
Tools for collaboration, time and expense management,
and project management help employees connect and
engage regardless of physical location.
Strategic HR: As it stands, HR is currently at a
disadvantage when asked for analytics. Without the
proper tools in place, they struggle to provide the data
analysis that would guarantee their inclusion as a strategic
partner within the firm. Effective people analytics requires
information from different areas of the firm including
resource planning, the sales pipeline, and even financial
information. When this information is fractured, it is up
to an HR professional already drowning in administrative
work to decipher the data and struggle to predict the
needs of the firm.
5. HUMANIZING HR WITH TECHNOLOGY
Employeesandapplicantsalreadyhavehighexpectations
forinteractionswithHR,butastheworkforcemoves
towardhighernumbersofalternativearrangements, like
contractandcontingentworkers,candidateswillrequire
moretouchpointsandcommunication.HRdepartments
arenotabletoscaleupandmeetthedemandfor,what can
onlybedescribedas,customerservice.Entertechnology.
Changing expectations: Firms need to have clear
employer branding to attract and retain talent. Employer
branding needs to be assessed at least annually as part of
strategic planning. It is important to understand whether
your policies, benefits, and perks are aligned with the
workforce of today. Employer branding is an important
way to establish your firm as a place people want to
work and has become so important to your employees
that 92% of them would consider leaving their jobs if
a company with an excellent reputation offered them
another role.
Growing demands on the service HR provides: As
technology becomes a more important aspect of the HR
function, new challenges will develop. Ethical questions
around emergent technologies such as artificial
intelligence (AI) will place HR in a new position within the
firm. Once AI is integrated into day-to-day processes
like talent acquisition, how will HR prevent bias in the
technology created to make recruiting easier?
BEST PRACTICES
The HR function is facing demands for greater analytics
and will be required to play a more strategic role from
today forward. The first step is to streamline the day-to-
day activities that HR must perform to create some space
for strategic HCM planning. To that end, there are some
best practices that will help HR become the strategic
powerhouse that is required in today’s market:
Human capital management strategy: Work with the
firm’s leaders to establish human capital management
as a strategic function. Help the C-suite understand
that the people potential in the firm is an incredible
untapped resource. Focus on how to grow the business
from within by tapping into the productivity that results
from a highly engaged workforce. Attracting, developing,
and optimizing great people will help the firm to lead the
industry with high performing teams.
Acquisition:Buildtalent poolstoensuretheavailabilityof
goodcandidateswhen you needthem. Creatingpipeline
isjust asimportant fortalent acquisition asit isforsales.

6. Deltek is the leading global provider of enterprise software and solutions for government contractors, professional services firms and other project-
based businesses. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. 22,000
organizations and millions of users in over 80 countries around the world rely on Deltek to research and identify opportunities, win new business,
recruit and develop talent, optimize resources, streamline operations and deliver more profitable projects.
Deltek – Know more. Do more.® www.deltek.com
US & Canada 800.456.2009 UK +44 (0) 20 7518 5010
© Deltek, Inc. All rights reserved. All referenced trademarks are the property of their respective owners. REV-9592-042418
AhighlyeffectiveApplicantTrackingSystem(ATS) isa
keypieceoftheoverarchinghumancapitalmanagement
strategy.Worktoreducethetimeistaketofillpositionsand
getnewhiresassignedtobillableprojects.Ifthetime-to-fill
ismorethan90days,thisisacriticalareatoaddress.
Performance and development: Project based
appraisals are a must for project based businesses.
Developing your people is an investment that pays off
in triplicate. The workforce gains the competencies to
deliver great projects to customers. Leadership turnover
is smooth because the leaders of tomorrow have been
identified and prepared. Employee engagement soars
because your people understand that they are valued and
part of the future.
Learning: Automate certification tracking and focus
on broader learning programs for your workforce. Align
learning plans with strategic initiatives for the firm and
with competency gaps in future leaders. For example,
when learning plans are aligned with succession plans, you
will ensure that your firm is prepared for turnover when a
key leader retires or moves on.
HR technology roadmap: For most firms, the road to a
fully integrated HR technology solution is just beginning.
Prepare the firm for the total investment in terms of
budget and time. Create a roadmap to help the entire
firm understand what it will take to craft and implement a
digital human capital management strategy.
Integrate HR and ERP technology: This is a must for
your HR technology roadmap. Integrating critical business
functions is the only way to provide the analytics required
to optimize the workforce. Integration will allow employee
information to be pushed into the ERP system to facilitate
the project lifecycle. Things like time and attendance,
employee expense reports, and critical employee data
can move between systems and streamline the allocation
of costs to projects, improve resource planning, and
automate payroll.
Collaboration: Be sure to include collaboration tools
in your HR technology roadmap. Project work often
spreads the workforce across locations and geographies
and makes it even more necessary to have tools in
place to allow dispersed teams to communicate and
work together. Collaboration tools can help you identify
disengaged employees faster and even ramp new
employees more quickly.
Choose a partner: Software was once something that we
bought and used. Today, you are not just buying a tool, you
are choosing a partner. Spending time evaluating features
and functionality is not enough. Chose the partner that
understands the challenges faced by the project-based
firm and is dedicated to future improvements that are
aligned with your needs.