human capital management: using your workforce to drive productivity · 2020-06-05 · human...

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Human capital management:using your workforce to drive productivitySusanne DiCocco

Umair Pervez

Welcome

Susanne DiCoccoDirector, People & Change, Advisory

Umair PervezSenior Consultant, People & Change, Advisory

© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International.

Agenda

– Introduction

– What is evidence based human capital management?

– Evidence based HR in practice

– Questions


Price of Oil2014 Jun

$105.152016 Mar

$30.64 $-70.80

Alberta Unemployment2015 Jan

4.6%2016 Feb

7.9% +3.3%

Alberta Cap Ex2014 Jan

$97.8 B2015 Jan

$74.9 B -23.4%

The current situation…

Source: Alberta Economic Dashboard, 2016


An evidence based approach results in improvements in productivity

Having the right people in the right functions with the right skills

Knowing how to identify waste in your organization

Ensuring a ROI on your people investments

Building a business strategy that ties Finance, HR, and SCM together


CEO issues are plentiful

Source: Evidence-based HR: The bridge between your people and delivering business strategy, 2015

Talent

Disruptive technology

Demands of the workforce

Regulatory requirements

Customer requirements


It’s important to reassess talent demographic changes


Traditionalist

DEMOGRAPHIC CHANGES MEANS ORGANIZATIONS STILL FACE POTENTIAL

SKILLS SHORTAGESUNLESS THEY ATTRACT AND RETAIN TALENT FROM ALL GENERATIONS

BabyBoomer Gen X Millennial Gen 2020

Demographic Change requires organizations to reassess their EVP and Reward Strategies


The time is now to refocus, reassess and repositionRefocus Reassess

Consensus is shifting toward a “u-shaped” or price recovery. This means we are in for a ‘new normal’

To prepare for the ‘new normal’ companies need to take a data driven to people decisions, even as they react to changes in the external environment.

8-20 year time horizon

3-10 year time horizon

Immediate – 2 year time horizon

‘U-shaped’ or ‘Bathtub’ (i.e. 1986)

Time

Oil

Pric

e ($

/bbl

)

Reassess

To prepare for the ‘new normal’ companies need to take a data driven to people decisions, even as they react to changes in the external environment.



Defining evidence based HR

Evidence-based HR uses data, analysis and research to understand the

connection between people management practices and business

outcomes, such as profitability, customer satisfaction and quality.



Top 5 benefits of evidence based HR

Source: KPMG International's HR Advisory 2015 Global Pulse Survey

1 2 3 4 559% 43% 32% 29% 29%Make HR

more strategicEnable HR to

pinpoint which people practices drive the most business value

Enable HR to become more

proactive in critiquing talent

Enable afact-based

assessment of the value of HR

Change talent management practices to align with evidence

% of respondents who indicated each choice as a benefit (top 3 picks)


Early adopters of evidence based HRMcDonalds

– Through evidence-based HR, McDonalds now knows that having at least one employee over 60 years old dramatically improves customer satisfaction, on average, by 20% and boosts performance in a fast food outlet.

McGraw Hill Financial

– The HR team at McGraw Hill Financial can now instantly summon information revealing the profile of those most likely to leave the organization in the near future and target interventions accordingly.

RBC

– The Royal Bank of Canada was able to discover a major connection between the degree employees believed in the competitiveness of their value proposition and the performance of the retail branch.


Let’s look at a data driven decision

Please use the device provided to select your answer for the following questions


Evidence based HR decisions

QUESTION 1

What percentage of line managers find video clips and podcasts very useful for their learning?

A. 22%

B. 55%

C. 68%

Line Managers

L&D

Seven simple steps for evidence based HR

How does

it work?1Identify a business challengeA retail bank wants to improve branch

performance.

2Develop your hypothesis There may be a link between the types of

employee in a branch and its overall performance. 3

Identify what data you have and needWe have HR and workforce data; we

need financial performance and customer data.

4

Analyse the data: what is it telling you? Think about the best visualization of the analysis so that leaders understand the implications of the analysis

6

Validate the data and findings with internal and external sources. If its not satisfactory, go back to step 2.

5

7

Leverage the insight into business decisions. We may run a pilot to test our conclusions before going firm-wide.

Continuously leverage an evidence-based HR approach. To bridge the ‘knowing-doing’ gap we will use best practices in our HR operating model



Evidence based practice: contingent workforce analysis

Employees IC Suppliers

Conventional Contingent

Contractors Third PartiesT4

TempEmployees SP

Regulated&

Seasonal

EPC&

Maint.

Level of Visibility

The need to understand and manage the total workforce requirements, costs and demands is distressing our clients in the Energy sector.


Source: KPMG

The value propositionYour workforce

SCM

+

BU

+

HR

Conventional T4EmployeesTemporary Employees

ContractorsI/C, S/P, Regulated, Seasonal

Third PartiesSuppliers, EPC Maintenance

Low Visibility

High Visibility

CostSavings

RiskMitigation

LegalCompliance

ProcessEfficiencies

Value Realization Categories

Do you know who all of your workers are, where they are all located, and what they’re all doing?

Do you know the costsand risks associated

with them?


The hidden relationship

Heavy Equipment OperatorsCrane Operators

General Labourers

Scaffolders

WeldersGasfitters

Telebelting

2013 = $22 million2014 = $38 million

+10% markup

+ Higher Rates+20% markup

+10% markup


100%

Client Company

Supplier 2

Supplier 1

Sub Contract 3

Sub Contract 5

Sub Contract 4

Sub Contract 1

Sub Contract 7

Sub Contract 6

EngineeringProcurement

Construction

Sub Contract 2

Heavy Equipment OperatorsCrane Operators

WeldersGasfitters


CW’s


Source: KPMG

Areas of Focus Category Item Workers Impact per Year

Cost Savings Rate Inconsistencies $7.00 per hour reduction 34 workers ~$450,000 ($13,440 per worker)

Overtime Management $30.00 per hour removal 17 workers ~$650,000 ($38,000 per worker)

Over Specification $20.00 per hour reduction 10 workers ~$380,000 ($38,000 per worker)

Bill Rate Analysis $5.00 per hour 20 workers ~190,000

Bill for Incorrect Rate $5.00 per hour 15 workers ~145,000

Leased Car Removal $7,000 per vehicle 20 vehicles ~$140,000

Avoidance of Markup’s Savings of 10% per CW 25 workers ~300,000 ($11,000 per worker)

WCB Overpayments $2,000 per worker 50 workers ~$100,000

Risk Mitigation CRA Reclassification $21,000 per worker 15 workers ~$320,000 + soft costs + costs to CW

Employment Standards Obligations

$23,000 per worker 15 workers ~$360,000

Legal Compliance AIT Act & Regulations $15,000 per worker 20 workers $300,000 + stop work orders

Employment Standards Exposure to fines & penalties - -

Process Efficiency Savings through process improvements and increased efficiencies in workforce management

Assumptions:- CW's base rate = $60/hour and $115,200 per annum• 48 weeks of work per year

Overall Annual Savings Identified – $2+ MIllustrative Example

Savings determined for an organization with 400-500 CWSource: KPMG


How can we help you get there?Workforce planning follows a 3-step-process including strategy, planning and implementation (and additional components), starting with workforce segmentation and closing with the complete process and system integration.

KPMG offers an Integrated Workforce Planning Approach that is most flexible to handle different types of needs from straightforward to complex project requirements.

Source: KPMG


How do you setup a workforce analytics function?

1. Build the case for a workforce analytics function

2. Assess your current maturity in workforce analytics

3. Run a pilot project


There are still bumps in the road that we must face


Skepticism about HR

Disorganized data

Cultural resistance

Skills deficit

Over-reliance on science

Harmful impatience


Three critical factors that organizations needs to address

1. Familiarity with data and analysis2. Greater knowledge of the industry and organization3. Reconfiguring HR functions


Workforce productivity through human capital management In conclusion an evidence based approach can help you…

Align business strategy with HR

Recruit, retain and manage talent effectively

Determine ROI on your people practices

Find hidden costs and act to eliminate them

1 2

3 4


Contact us

Susanne DiCoccoDirectorPeople & ChangeT: 403 648-7178E: [email protected]

Umair PervezSenior ConsultantPeople & ChangeT: 403 691-8023E: [email protected]


Thank youDownload this presentation at:

kpmg.ca/ignite

© 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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human capital management: using your workforce to drive productivity · 2020-06-05 · human...

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