THE EMERGING HR IMPERATIVE: Five Insights for Bridging the Training Effectiveness and Talent Management Gap

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1 THE EMERGING HR IMPERATIVE: Five Insights for Bridging the Training Effectiveness and Talent Management Gap TALENT MANAGEMENT SOLUTIONS FOR LIFE SCIENCE COMPANIES

2 IN THIS PAPER: How Life Sciences companies can move from compliance to competency, improve technical skills and competency training, drive business performance and retain top talent.

3 THE EMERGING HR IMPERATIVE: Five Insights for Bridging the Training Effectiveness and Talent Management Gap Human Capital Management Never Sleeps. The move from compliance to competency is becoming mandatory at forward thinking Life Sciences companies, and Human Resources management is getting more engaged in leading the transition. Here s why. Growth and Competition Companies expanding and competing in the global marketplace do so on many levels price, talent, quality, reputation, and sales. Inherent in this activity is a myriad of business pressures rooted in fierce competition, regulatory oversight, vulnerability to risk, and employee turnover. To navigate safely, organizations working in regulated industries must be both compliant by law and competent by design. This presents HR managers with a bold challenge. The issue is the hiring, developing, training, and retaining of top talent that possess a growing list of desirable technical skills and competencies. Bench strength among this workforce cohort, however, is limited. Many companies find themselves competing worldwide for a shrinking pool of technically trained employees to the point where skills have become currency. This challenge has bubbled up to the executive floor, where 63% of CEOs are worried about the availability of key skills 2 according to recent research from PricewaterhouseCoopers. Talent is the multiplier. The more energy and attention you invest in it, the greater the yield. 1 Marcus Buckingham In response, HR, Quality Assurance and Manufacturing management along with the C-Suite are re-thinking how they prioritize funding to manage, train, measure, and assess employee technical skills and competencies. Many see their success managing talent as a direct link to gaining a competitive advantage, and understanding the KPIs that drive their business. Regulatory Pressure and Oversight The FDA requires that your employees be trained to not only meet compliance standards, but also to possess job knowledge and skill sets beyond the fundamentals. This is pushing the Life Science community more towards training effectiveness, and away from the by-rote methods that are now less likely to pass more disciplined audit procedures. As this trend gains traction, HR managers are seeing the need to take on their organization s competency and skills training, and other talent management functions that have historically fallen outside their purview. This is intended to ensure that their company is able to support role-based, technical skills training and measurement programs without compromising their recruiting, hiring, goal setting, performance management, and other core responsibilities. Page 3

4 THE EMERGING HR IMPERATIVE: Five Insights for Bridging the Training Effectiveness and Talent Management Gap 57% 39% % Other Observations *2014 Drugs, Devices and Biologics only Total Observations: 7,360 fda.gov/iceci/inspections/ucm US FDA 483 OBSERVATIONS: * Lack of, inadequate, or failure to follow procedures 28% % Meeting this Training Effectiveness challenge aligns with US FDA observation statistics in 2014, as lack of, or inadequate procedures represented 57% of all the FDA 483 observations noted within Drugs, Devices and Biologics inspections an 18% increase from UL CLIENT SURVEY: Failure to Follow SOPs or Other Documentation The Director of the FDA Center for Drug Evaluation and Research, Janet Woodcock, reflects this thinking. Speaking at the Parenteral Drug Association Quality Metrics Conference in December 2013, she set her goals to shift the FDA s focus to performance and away from compliance. 3 Taking its lead from the FDA, the Life Science community will follow. As organizations upgrade their audit readiness, and align training goals with measurable performance outcomes, several questions that can impact HR involvement come to mind: - Does the training that brings your employees into compliance for a particular job function ensure that they are highly qualified and competent for that role? - How will you track and measure employee performance and leadership development against benchmarks; and correlate to KPIs? - What is the cost of losing a technically trained employee vs. the cost of retraining? While regulatory audits are part of the landscape, their effects still send ripples across the organizations undergoing them. It s never been more important to ensure all your employees from managers to shop floor teams are not just compliant, but skilled and competent as well. Training Effectiveness More than just a compliance issue training effectiveness is now a performance management imperative as well. Manufacturing companies must not only demonstrate it to meet basic qualifications, they must also prove the competency level of their employees to create a flexible, skilled, and high-performing workforce often in the face of strong headwinds. The FDA s observation statistics from 2014 indicate the lack of, inadequate, or failure to follow procedures represented 57% of all the FDA 483 observations noted within Drugs, Devices and Biologics inspections an 18% increase from In addition, a recent industry survey revealed that Failure to follow SOPs or other documentation was the most cited observation by internal and external auditors. 6 It s apparent from these findings that many companies still struggle to ensure that trained employees who meet baseline qualifications are also competent employees. It s not surprising then, that, many workers are not being carefully evaluated based on their technical skills and competency levels in any disciplined manner. Despite the availability of Talent Management Systems (TMS), there is a paucity of measurement tools. There is also a limited understanding among learning management administrators and HR of what s required to develop, initiate, and sustain a competency-mapping and skills-based training program. Page 4

5 THE EMERGING HR IMPERATIVE: Five Insights for Bridging the Training Effectiveness and Talent Management Gap To clear this hurdle, more companies are taking steps to move up the Quality-Based Learning Maturity Model: 5 LMS TRAINING RECORD MANAGEMENT 4 1 SOP ROLE-BASED MANAGEMENT 2 Audit Readiness Validated System Defined Curricula Role-Based Qualifications TRAINING EFFECTIVENESS TALENT MANAGEMENT BUSINESS OUTCOME 3 OJT Checklists Learner Assessments Skills and Competency Performance Management This approach designed to guide the transition from compliance to competency challenges organizations to improve the quality and learning outcomes of their technical training initiatives. It also creates a window for HR and other departments to see how that training impacts employee performance and company-wide performance metrics. In its report on Global Human Capital Trends 2014, Deloitte found that 75% of survey respondents rated workforce capability as urgent or important ; however, only 15% believe they are ready to address it. 7 How HR Can Help Close the Skills Training Gap The insights that follow lay out steps for HR management to help fill this talent management void, and take an active role in shaping their company s performance and quality culture. Business Performance Talent Growth and Retention

6 INSIGHT 1Build your talent management solution on a proven performance platform. 70% of respondents ranked measuring training effectiveness as a top learning priority for HCM/Talent Management Priorities Business Drivers: Skills/Competencies Employee Development Talent Retention QA/Compliance Learning Priorities Business Drivers: Reduce Compliance Risks Role-Based Qualification Audit Readiness Quality & Production Improvements Within the $3.3 billion talent management solution software suite, Customers are predisposed to buy more modules from a single vendor. 9 Consolidating disparate training, learning, and talent management functions on a single, scalable platform has precedent to support it: - The average large company according to a recent Bersin by Deloitte survey has seven HR systems of record. 10 These systems typically do not communicate well, and this incompatibility has been frustrating HR departments and business leaders for years. - A 2012 global survey found that two-thirds of companies are willing to sacrifice technical features for a single-vendor or highly integrated solution. 11 Compliance Training Role-Based Skills Development Retain Talent through Performance Management Initiatives As you develop your blueprint, look to leverage the value and functionality of your existing Learning Management System (LMS). TMS features and user benefits can be integrated on a proven LMS foundation rooted in a compliant and effective role-based training infrastructure. This meshing of training effectiveness and talent management helps create a targeted learning path for each employee, with the flexibility to: - Refine role-based performance management programs so that managers can identify skill gaps, and then assign a specific training regimen to bridge those gaps. - Address and manage employee competencies by drilling down to the tactical level. - Extend role-based training programs, while merging them with the technical skills training components. - Link the reporting and KPIs back to HR and management. While this depth of functionality is becoming mandatory, it s not yet a commodity. Many current HR training programs are cutting edge, but they cannot deliver the level of granularity necessary to map employee competencies to technical skills goals. This granularity of role-based competency mapping provides companies with operational skills management, which increasingly is being used by leading organizations to improve technical employee performance. Not having been built from the ground up to support the needs of a quality & compliance-centric organization, many TMS providers often fall short of meeting company-wide human capital management AND operational skills management. As a result, these critical deficiencies can put your company s quality and compliance programs at greater risk. So, for many market-leading TMS providers who focus on traditional, HR-specific, leadership development capabilities, the bloom might be coming off the rose. Page 6

7 INSIGHT 2A successful talent management engagement must generate company-wide performance measurement and financial benefits that stream to the bottom line. A recent survey of Life Sciences industry decision makers showed that More than 80% of respondents agreed that competency management programs that measured technical skills were important to criticalto-quality initiatives. 13 In fact, mapping technical skill competencies to key job functions is a critical asset for building measurable, on-the-job training and mentoring programs to challenge and engage employees. Engaged employees are, without question, your company s best competitive advantage, and successful companies know that employee disengagement is not good for business. Disengagement costs the U.S. economy almost $550 billion per year in lost productivity. 14 And that hit goes beyond the bottom line. Employee disengagement impairs performance and client retention, and drives up the cost of absenteeism and turnover. In a scenario where learning drives engagement, employees work within a defined skills development framework and advance through their competency levels. This framework helps: - Identify each role within the manufacturing and operational process. - Define the skills and competency levels for each role (e.g., Basic, Intermediate, Advanced, Expert). - Develop training programs that align to each skill and level. - Track and report qualification to these programs. - Assess and rate individuals against their defined skill and level. - Identify skill gaps; design training that fills these gaps, and guide workers to a new level. - Monitor skill development, track progress, and benchmark against established metrics. Using a defined set of metrics for each job function can also help correlate employee progress with compliance and business outcomes. As a result, it s realistic to expect reduced manufacturing cycle time, reduction in scrap, fewer audit observations, improved operating efficiencies, and better employee retention through clear opportunities for career growth. These direct benefits will help unite HR teams with other internal constituencies by bridging gaps between those who manage technical competencies, those who manage corporate or leadership competencies, and those who manage financial competencies. Metrics help you understand the success of your program, justify the ROI, and are the best way to communicate data to C-Level executives. 12 Page 7

8 INSIGHT 3HR managers can be comfortable outside their comfort zone. 73% of respondents believe it is important for competency programs to address role-based technical skills and identify skill gaps. 16 As guardians of the training budget, HR decision makers are no strangers to doing more with fewer resources. This includes making tough budget decisions that carry you beyond the comfort zone of traditional training and staff development into unfamiliar waters. So you should not flinch at the fact that the way your organization grows, manages, measures, and assesses talent can be a game-changer. This becomes even more evident as key stakeholders business leaders and shareholders get a better grasp of the link between retaining the best talent and achieving the best results. As the Human Capital Institute reports, More investment analysts and company directors are demanding to know about engagement levels, segmented turnover data, and the types of developmental opportunities for top talent. 15 With more executive attention being focused on employee training, performance, and retention outcomes, your due diligence should include these best practices when evaluating your TMS and LMS options: Take a global view of your organization and its operation. Discover synergies between the learning management needs of your Quality Assurance colleagues, and the staff development, talent management and retention needs within HR. Meet with QA, look for compatibilities, and capitalize on them by teaming up and working together. Understand that the relationship between technical training and competency mapping is highly relevant to improving employee technical skill sets. Your combined solution should offer an operational skills management program with a set of universal benefits that drill down to the shop floor workforce: - Provides employees with a designated career path for growth. - Gives them visibility into their progress. - Reduces the risk of losing highly skilled workers. - Delivers more effective recruiting, internal goal setting, and performance measurement. Lead the awareness building and internally market the performance, productivity, competitive and financial benefits of the combined solution. Then use that knowledge to recruit champions from the C-Suite. One final thought... In many cases, moving from compliance to technical skill competencies enables you to leverage an existing leadership development methodology used by your HR group, or your organization s Leadership Development team. Page 8

9 INSIGHT 4Don t sell due diligence short when evaluating TMS options. Start with the immutable premise that the first responsibility of company management is to meet the regulatory compliance requirements mandated by law, then build up from there. Understand that an effective TMS must accommodate both the universal corporate competencies managed by your HR team, and the technical competencies managed by each individual department. Achieving this will put HR in the position of delegating the technical skills development curricula out to the participating departments. To do this, your TMS should: - Focus on role-based qualification vs. individual profiles, so departments can drive these programs. - Support segmented security rights, so managers and L&D teams gain the power to build their department-level programs, and gain visibility into the goals and performance advancement of their direct reports. - Utilize blended learning (classroom, mentoring, and elearning) that can be aligned with development gaps, assigned from a department level, and presented to employees as part of an overall performance development plan along with HR s universal competency program. - This way, your TMS serves the corporate performance management demands of HR, as well as the continuous skills development needs of your departments. Get a firm grasp of the relationship between technical training and competency mapping. Investigate solutions that offer a set of disciplined methodologies, analytical tools and tactics to measure employee competency against specific metrics. Poll QA, IT, and C-level colleagues on their needs, goals, and expectations for a TMS solution, then draft your RFP accordingly, setting realistic budget parameters and timing for both piloting, and full-scale rollout across the company. Speak with providers that have worked with companies like yours, and who are nuanced within your industry. A provider with that level of insight and experience is well-positioned to help guide you into the TMS space. Potential suitors must: - Demonstrate a clear understanding of your business and the ability to work with you. - Ensure their solution is easy to administer. - Remain flexible when developing solutions to fit users so they can leverage them. It s prudent to consider all qualified vendors, not just the market leaders, whose size could hinder their ability to move quickly to serve your needs. More agile providers have emerged who may actually have similar or superior capabilities in many areas than the big box providers. 17 Often, these companies have an advanced mastery of their craft vs. the Jack of all trades, master of none approach of their lumbering cousins. They might also possess a competitive advantage. See if they offer greater capabilities, including unique system features and functionality, content, or special advisory services. Watch how they handle managing technical skills and competencies by roles and job functions. Especially if you need to define department-specific technical competencies, develop role-based technical skills, and measure and improve performance. Many big box providers cannot offer this level of granularity, and current HR training programs often cannot meet those needs. It s prudent to consider all qualified vendors, not just the market leaders. Page 9

10 INSIGHT 5Employee talent development and technical training is a collaborative effort. Work with internal teams towards a unified talent management initiative, and deliver a winning program that resonates from the executive floor to the shop floor. An effective competency and skills framework also loops benefits back to the HR function. Business Drivers: Align Resources with Growth Opportunities Acquire the Right Talent Retain the Right Talent Business Drivers: Reduce Compliance Risks Audit Readiness The responsibility for recruiting the best and the brightest, ensuring they re role compliant, and providing them with quality technical skills training and measurement cuts across all departments. By clearly defining the business drivers for their core functions (see chart), all departmental talent management activities can be synchronized and aimed squarely at achieving your collective talent management goals. By following this path, managers and trainers will be better equipped to identify specific technical competencies and role-based technical skills, enabling them to deploy an operational HR ACTIVITIES COMPLIANCE ACTIVITIES > Align Staffing/Resources to Workflow Needs > Retain Talent through Leadership Development > Corporate-Wide Performance Management > Assess Risk-Based Compliance Needs > Achieve Compliance Education Goals > Demonstrate Compliance to Internal/External Auditors skills management solution that provides the quality metrics to help measure and improve the performance of each employee. An effective competency and skills framework also loops benefits back to the HR function. The accrued value to HR is your company s ability to define its technical competency needs by department, develop role-based technical skills, and measure and improve performance. Achieving those goals allows your organization to better: - Articulate the types of employees who can best fit exposed skill gaps. - Set realistic expectations to improve onboarding based on measurable results. - Assign more precise goals at the department level for employee development. - Conduct more thorough and objective performance reviews. While a few hiccups can be expected along the way assigning administrative responsibility and overcoming resistance to change comes to mind these results will find their way back to HR, manifested in improved department activities, and an appreciation for how highly-trained, technical talent can help you gain a competitive advantage at all levels of your organization. Business Drivers: Role-Based Qualification Quality & Production Improvements Improves the Activities of HR DEPARTMENT ACTIVITIES > Define Department-Specific Technical Competencies > Develop Role-Based Technical Skills > Measure & Improve Performance Page 10

11 THE EMERGING HR IMPERATIVE: Five Insights for Bridging the Training Effectiveness and Talent Management Gap Conclusion The Life Sciences community is ready for something new, and different a fresh, more strategic training methodology that emphasizes the why of learning instead of the how of compliance by focusing on measuring training effectiveness, improving technical skills and increasing employee competencies. Moving forward, organizations will become more proactive from an operational skills management perspective by: Defining employee skill sets to measure and monitor gaps Focusing training and developmental efforts to close those gaps Moving beyond traditional Talent Management programs Concentrating on department-specific technical competencies Delivering performance management solutions that benefit all departments UL Compliance to Performance is committed to helping its clients bridge the training effectiveness and talent management gap to help improve their business outcomes. Working closely with you and your internal partners, we can help link those who manage technical competencies with those who manage corporate or leadership competencies, allowing you to: Focus on performance improvement tools and applications to define, assess, and measure technical skills within the production and operational areas of your business. Build on our reporting tools so that competency data is available to identify highperformers within the organization, and deliver the appropriate developmental opportunities. Leverage TMS features and functionality with our ComplianceWire Learning Management System platform to create a combined solution that can be costeffectively scaled and customized to your requirements. Your Human Resources management team will no doubt play a pivotal role in the decision making, and help your company leverage its highly skilled workforce to compete and win on the global stage. Page 11

12 THE EMERGING HR IMPERATIVE: Five Insights for Bridging the Training Effectiveness and Talent Management Gap References 1. Buckingham, Marcus, and Coffman, Curt, First, Break All the Rules, What the World s Greatest Managers Do Differently, Simon & Schuster, May th Annual Global CEO Survey: The Talent Challenge, PricewaterhouseCoopers, Leinfuss, Ellen, The FDA s Focus On Metrics, Performance, And Quality, Life Science Leader, April 2, ComplianceWire Benchmarking Study, 2014 Results 2015 Forecast, From Compliance to Competency, UL EduNeering, March Ibid Ibid Global Human Capital Trends 2014: Engaging the 21st-Century Workforce, Deloitte, Ibid Magic Quadrant for Talent Management Suite, Gartner, June 12, Global Human Capital Trends 2014: Engaging the 21st-Century Workforce, Deloitte Consulting LLP and Bersin by Deloitte, Jones, Wang-Audia, and Mallon, Talent Management Systems Sourced from Global Human Capital Trends 2014: Engaging the 21st-Century Workforce, Deloitte Consulting LLP and Bersin by Deloitte, Effective Talent Management Has Become an Essential Strategy for Organizational Success, ADP, ComplianceWire Benchmarking Study; 2014 Results 2015 Forecast, UL EduNeering, Human Capital Institute, March 2, Ibid Ibid The Definitive Buyer s Guide to the Global Market for Learning Management Solutions 2014, Bersin by Deloitte, August About UL Compliance to Performance UL Compliance to Performance provides knowledge and expertise that empowers Life Sciences organizations globally to accelerate growth and move from compliance to performance. Our solutions help companies enter new markets, manage compliance, optimize quality and elevate performance by supporting processes at every stage of a company s evolution. UL provides a powerful combination of advisory solutions with a strong modular SaaS backbone that features ComplianceWire, our award-winning learning and performance platform. UL is a premier global independent safety science company that has championed progress for 120 years. More than 12,000 professionals are guided by the UL mission to promote safe working and living environments for all people. 202 Carnegie Center Suite 301 Princeton, NJ UL and the UL logo are trademarks of UL LLC ULComplianceToPeformance.com Page 12 WP/15/052115/LS