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1 Making the Business Case Presenting Your HR Solutions to the C Suite Kendra Dodd, SPHR, MHRD, SHRM All Rights Reserved MRA 1 Roadmap for the Session Identify business problems where HR solutions can be most valuable Create business proposals that solve business problems with HR solutions Place a dollar value on the problems, solutions, and profit increase All Rights Reserved MRA 2 Poll Question How successful are you in selling HR solutions to business problems to the C Suite? A) I am batting 1,000! My senior leaders consistently depend upon me to deliver effective HR solutions. B) 50% or better success rate I hit the bullseye more often than not. C) Less than 50% success rate I need to determine where and why things get derailed. D) I have not presented business solutions to the C Suite/not very successful. All Rights Reserved MRA 3 1
2 Traditional HR Focus Recruiting Interviewing Orientation/Onboarding Performance Management Benefits Enrollment Incentives and Recognition Safety Learning and Development Policies and Procedures Employee Engagement Compliance Termination of Employment HR Technology Payroll All Rights Reserved MRA 4 Business Focus 24/7/365 Business Competition Globalization Multicultural Considerations Technological Advances Demographic Patterns People Capabilities Finding New Employees Rapid Change Economic Pressures Politics Stock Market Trends Legal Trends Governmental Actions Organizational Alliances Benefits Environment All Rights Reserved MRA 5 Are You An HR Expert? OR A Business Professional who happens to be an expert in HR? All Rights Reserved MRA 6 2
3 Building a Business Case All Rights Reserved MRA 7 5 Critical Steps to Building a Business Case 1. Define the business problem using data 2. Identify a strategic business solution 3. Create a cost/benefit analysis 4. Present solution to C Suite 5. Develop an action plan All Rights Reserved MRA 8 Poll Question Which of these 5 steps do you need most improvement? All Rights Reserved MRA 9 3
4 5 Critical Steps to Building a Business Case 1 Define the business problem using data All Rights Reserved MRA 10 What s the Problem? Increasing leader capacity Reducing company costs Improving customer loyalty Decreasing turnover of staff Engagement of employees and leaders Attaining transparency in the workplace Addressing underperforming divisions Ensuring key talent is developed All Rights Reserved MRA 11 Example Dynamic Designs, a website design, digital marketing and branding firm, has been operating for just over two years, and sales are exceeding targets. Currently, three designers are working full time, and the owner is considering increasing capacity to meet demand. This would involve remodeling existing office space and hiring additional designers. All Rights Reserved MRA 12 4
5 Data Sources: Stakeholders interviews Surveys/questionnaires Observations Record/report reviews Credibility is key for success! All Rights Reserved MRA 13 Data Measurements Revenue Per Employee Cost Per Hire Turnover Cost Time to Productivity Annual Turnover Rate Employee Satisfaction Cost of Training Lost Time Rate Quality Indicators Financial Data Sales Revenue Customer Loyalty and Retention Cost of Customer Acquisition Operating Productivity Size of Gross Margin Monthly Profit/loss Overhead Costs Size of Inventory All Rights Reserved MRA 14 Mapping HR Goals to Business Goals All Rights Reserved MRA 15 5
6 Executive Speak Typically Senior Leaders Like to Hear About: Maximizing shareholder value Increases in revenue and productivity Employee engagement Quality of Hire Labor Costs and its effect on profit margins (more the CFO!) All Rights Reserved MRA 16 5 Critical Steps to Building a Business Case 2 Identify a strategic business solution All Rights Reserved MRA 17 Identify Potential Solutions Dynamic Designs HRBP has brainstormed the following potential business solutions: Approve OT for existing staff Hire new staff Turn away business opportunities Use temporary staff Outsource design services Departmental cross training All Rights Reserved MRA 18 6
7 Assessing Options All Rights Reserved MRA 19 5 Critical Steps to Building a Business Case 3 Create a cost/benefit analysis All Rights Reserved MRA 20 Recruit Cost/Benefit Champions Involve CFO and IT in cost/benefit analysis Increase accuracy of the analysis Lend analysis credibility Secure buy in early on All Rights Reserved MRA 21 7
8 Dollars and Sense Capital expenses (one time) vs. fixed costs (ongoing) Salaries external (vendor) or internal (employee) Furniture, fixtures and equipment Technology/software Printed materials/communications All Rights Reserved MRA 22 Dynamic Designs Category Details Cost in First Year Remodel Office Knock out walls and reconfigure office space $25,000 Hire two more designers Modified workstations Construction downtime Costs Salary, including benefits Recruitment costs Orientation and training Furniture, fixtures and equipment Software $90,000 $6,000 $3,000 $5,000 $2,500 Three weeks approximately $5,000 revenue/week $15,000 Total $146,500 All Rights Reserved MRA 23 Dynamic Designs Benefits Benefit Benefit Within 12 Months 40% revenue increase $170,000 Paying in house designers $15 an hour, versus $65 an hour outsourcing (125 hours per month, on average: savings equals $6,250 a month) $75,000 Improved Dynamic customer Designs service owner and retention calculates as a the result payback of time $10,000 as: $146, / percent $255,000 in house = 0.57 design of a year, or approximately Total 6.8 months. $255,000 All Rights Reserved MRA 24 8
9 Template Costs Category Details Cost in First Year Total All Rights Reserved MRA 25 Template Benefits Benefit Benefit Within 12 Months All Rights Reserved MRA 26 5 Critical Steps to Building a Business Case 4 Present solution to C Suite All Rights Reserved MRA 27 9
10 Tips To Present to the C Suite Start with the end in mind Delivery matters! Data = Credibility Ah ha!! Know Your Audience Report Back Wins All Rights Reserved MRA 28 Create a Sense of Urgency Start Here Our time to fill is 15% higher than industry average. 50% of new hires left within their first 90 days of employment. Land Here For every day a sales position remains vacant, we lose $8,000 in revenue. If we reduce turnover of new hires by 25%, conservative estimates show we will save the company $250K in recruiting and training costs. All Rights Reserved MRA 29 HR Solution A Quick Summary We plan to (impact) by ($s or %) through (fairy tale ending). This will require us to invest ($s), which will be returned to us within (timeframe). All Rights Reserved MRA 30 10
11 HR Solution A Quick Example We plan to increase revenue by 40% through the acquisition of 2 new FT designers. This will require us to invest 147K, which will be returned to us within 7 months. All Rights Reserved MRA 31 5 Critical Steps to Building a Business Case 5 Develop an action plan All Rights Reserved MRA 32 Action Plan Set goals and objectives Schedule timeline with milestones Define roles and responsibilities Determine budget Share what success looks like All Rights Reserved MRA 33 11
12 Dynamic Designs Action Plan Set goals and objectives Remodel office to accommodate increased capacity Schedule timeline with milestones Construction complete within 3 weeks Define roles and responsibilities HR to create/post jobs Determine budget Remodel to stay within budget of $25k Share what success looks like All Rights Reserved MRA 34 Dynamic Design s Success Dynamic Designs successfully hired 2 new full time designers and remodeled their office. They now have the capacity to take on the extra customer requests. All Rights Reserved MRA 35 5 Critical Review Steps to Building a Business Case 1. Define the business problem using data 2. Identify a strategic business solution 3. Create a cost/benefit analysis 4. Present solution to C Suite 5. Develop an action plan All Rights Reserved MRA 36 12
13 Poll Question What will you commit to doing in order to improve one of these steps? All Rights Reserved MRA 37 MRA Contact Info Questions? All Rights Reserved MRA 38 13
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