HRO
- Early Findings
and
BestinClass Talent Management Metrics
-Kevin Martin
Vice President and Principal Analyst, Human Capital Management
Workforce
Management
Talent
Management
Human
Capital
Management
Workforce Planning Workforce Compensation Learning & Development Succession Planning Talent Acquisition Employee Performance Management Competency & Assessment Onboarding Benefits Management Time and Attendance Payroll Scheduling Absence Management2008 HCM Benchmark Reports (published)
Onboarding (794) – January 2008
Time and Attendance (333) – February 2008
Recruitment Process Outsourcing (211) – March 2008
Total Compensation Management (453) – April 2008
Managing Employee Performance (927) – May 2008
Workforce Collaboration (275) – June 2008
Benefits Management (330) – July 2008
Talent Acquisition Strategies (622) – July 2008
Workforce Planning (250) – August 2008
Aberdeen’s “PACE” Methodology
Pressures:
external forces that impact an organization’s market position,
competitiveness, or business operations (e.g., economic, regulatory,
technology, competitive, etc.)
Actions
:
the strategic approaches that an organization takes in response
to industry pressures (e.g. product/service strategy, target markets,
go-to-market, and sales strategy)
Capabilities
:
the business process competencies required to execute
corporate strategy (e.g., skilled people, brand, market positioning, viable
products/services, financing, etc.)
Enablers
:
the key technology solutions required to support the
organization’s business practices (e.g. development platform,
Objective: Determine Best-in-Class Performance
Best-in-Class
= top 20% of all organizations surveyed
Industry Average
= middle 50%
Laggards
= bottom 30%
Key Performance Indicators
(for RPO):
Quality of candidates sourced
Satisfaction rate of the hiring manager
Candidate’s experience / satisfaction with the
NOTE
Aberdeen Insight - The 2008 Aberdeen Report
Survey of 4,568 business executives revealed…
“The ‘lift and drop’ mentality dominating
outsourcing engagements in the past is being
replaced by a partnership mentality in which
providers and end-users work together to add
value to processes, improve efficiencies, and
decrease costs”.
How RPO is Defined
RPO
RPO
–
–
By Size
By Size
72%
19%
63%
31%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Outsourcing of select aspects
Outsourcing of the entire recruitment
process (from sourcing to assessing
to onboarding)
Top Pressures
RPO
RPO
–
–
Findings
Findings
55%
41%
31%
21%
10%
7%
44%
48%
27%
6%
22%
22%
0%
10%
20%
30%
40%
50%
60%
Lack of
internal HR
resources
Cost of
attracting/
recruiting
new
employees
Meet
anticipated
staffing levels
(i.e.surge)
Inferior
quality of new
hires
Fast-changing
industry
Global
expansion
500 - 5,000
5,000+
Top Strategic Actions
RPO
RPO
–
–
Findings
Findings
32% 37% 45% 47% 24% 38% 36% 63% 0% 10% 20% 30% 40% 50% 60% 70% Strengthen internal resources where performance is sub-par Outsource specific HR functions where cost and performance are sub par Improve company's brand / reputation as a great place to work
Focus key internal HR resources on
core
organizational competencies
Knowledge You’ll Come Away With Today…
Early findings from Aberdeen’s November 2008
HRO research
- Early Aggregate Findings –
How Do You Define HRO?
64% 19% 14% 3% 0% 10% 20% 30% 40% 50% 60% 70% Outsourcing of any HR element deemed necessary (“core” or “non-core” and not limited to # of elements) Outsourcing of core HR elements only (payroll, benefits, compensation, and HR administration) Outsourcing of the entire HR function (end-to-end processes for allHR processes)
Don't know / Not applicable
Top Macro Pressures Driving HRO
43% 38% 30% 0% 10% 20% 30% 40% 50% Increased competitive landscape Compliance requirements (e.g. federal, state, union,corporate, fair labor)
Current economic climate / uncertainty
Top Internal Organizational Challenges
60% 56% 43% 0% 10% 20% 30% 40% 50% 60% 70%Lower costs of delivering HR services
Allow HR organization to focus on core business
objectives
Improved HR service to end-users (employees)
Most Valuable Actions to Ensure HRO Success
53% 27% 26% 0% 10% 20% 30% 40% 50% 60% Define agreed-to performance metrics (in terms of costs and services)that measure pre- versus post-HRO results
Conduct frequent analysis of HRO program
effectiveness (with involvement from company
and provider)
Maintain frequent, scheduled communication
Hurdles to Widespread HRO Adoption
47% 39% 33% 20% 0% 10% 20% 30% 40% 50% Proof of HR service improvementProof of cost savings Ability to provide consistent acceptable levels of service from an outside entity Evidence of HR personnel’s ability to make a more strategic impact on the organization
Has HR Become More Strategic Since HRO?
50% 26% 12% 12% 0% 10% 20% 30% 40% 50% 60%Determination that HR has Become Strategic
26% 25% 22% 14% 12% 0% 5% 10% 15% 20% 25% 30% Performance improvement in key talent management objectives HR is invited to participate in key corporate leadership meetings Performance improvement in organization’s operational metricsElements Planned to Outsource
15% 20% 21% 26% 24% 30% 13% 15% 13% 15% 12% 14% 0% 10% 20% 30% 40% 50% Employee performance management Leadership development Compensation management Training / Learning Competency and assessments HR AdministrationCURRENTLY OUTSOURCE PLAN TO OUTSOURCE
87% 58% 62% 75% 47% 50%
Aberdeen’s HRO Survey
-live until Nov 4
th
-
Talent Management
The Talent Management Value Chain
Recruit
Onboard
Performance
Mgt.
Learning &
Dev.
Succession
Best-in-Class KPI for Talent Management
√
Management bench strength
√
Positions filled internally
√ √ Employee satisfaction √ √ √ √ √ Retention √ √ Employee performance √ √ Time to Productivity √ Quality of Hire S. Mgt L & D Comp ($) EPM ONB TAS
Best-in-Class Metrics
Succession Planning
The priority is to look within
and to look beyond the
C-suite
Employee Performance
Clearly defined goals and
development plans are key
Onboarding
Retention now trumps
time-to-productivity
Talent Acquisition
“Quality” has the become the
gold standard
Talent Acquisition
Metrics that Matter Most: Talent Acquisition
50% 40% 39% 37% 33% 27% 40% 46% 35% 39% 26% 27% 30% 41% 24% 27% 19% 26% 0% 10% 20% 30% 40% 50% 60%Quality of hire Time to fill / Time to hire New employee retention Hiring manager satisfaction Quality of candidate
Cost per hire Best-in-Class Industry Average Laggard
Top Three Metrics that Matter Most
49% 34% 34% 34% 33% 35% 24% 37% 33% 48% 0% 10% 20% 30% 40% 50% 60%Quality of hire Quality of candidate Overall hiring manager satisfaction New employee retention
Time to fill / Time to hire
Non-HR HR
Quality of Hire
Top Four Indicators of Quality of Hire
81% 69% 52% 43% 65% 56% 44% 37% 51% 39% 38% 29% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%How quickly the new hire performs on the
job productively
Retention rate of top performers Candidate's first performance review rating Character / personal values
How Quality of Hire is Calculated
72% 53% 48% 42% 63% 55% 33% 44% 0% 10% 20% 30% 40% 50% 60% 70% 80%How quickly the new hire performs on the job
productively
Retention rate of top performers
Character / personal values
Candidate's first performance review rating
Onboarding
Best-in-Class Metrics: Onboarding
Best-in-Class
Retention Rate for New Hires =
87%
Completion Rate for Onboarding
Tasks = 56%
Time to Productivity for New
Hires = 45%
Laggard
Retention Rate for New Hires =
48%
Completion Rate for Onboarding
Tasks = 16%
Time to Productivity for New
Metrics Defined – more details
Time-to-Productivity
Must be job-role specific
Must be tied to key
performance objectives
(reinforced in quarterly
reviews)
For example – a sales
person who is able to
begin calling prospects
earlier will improve their
quota achievement and
customer satisfaction
New-Hire Retention
Measured at 1, 3, 6, and
Metrics that Matter Most
73% 52% 42% 61% 58% 30% 0% 20% 40% 60% 80%New employee retention New employee productivity Company reputation / brand in recruiting top talent
Performance Management
Metrics Assigned to Performance Management
76% 61% 58% 48% 43% 42% 61% 42% 51% 32% 31% 27% 54% 37% 43% 29% 25% 25% 0% 10% 20% 30% 40% 50% 60% 70% 80% Employee performance Employee satisfaction / morale Employee retention Percentage of goals attained Employee Engagement Revenue per employeeHow Employee Performance is Measured
72% 69% 48% 40% 61% 75% 46% 37% 57% 72% 34% 29% 0% 20% 40% 60% 80% Percentage of goals attained Ratings in job-specific performance reviews Ratings in project-specific performance reviews Efficiencies produced (i.e., decreased production time) Best-in-Class Industry Average LaggardSuccession Planning Defined
A combination of process, tools, and disciplines
that enables an organization to plan for anticipated
leadership needs as well as identify, develop,
retain and allocate key talent.
Pre
Best-in-Class Metrics: Succession Planning
Best-in-Class
% of Key Vacancies Filled
Internally
= 63%
Bench Strength
= 49%
% of positions w/ qualified and
willing successor
Performance of Successor
= 40%
In terms of results and
leadership
Laggard
% of Key Vacancies Filled
Internally
= 29%
Bench Strength
= 21%
% of positions w/ qualified and
willing successor
Performance of Successor
= 21%
In terms of results and
Thanks for your interest in Aberdeen’s research!
