CAHRS Working Group HR for HR

Transcription

1 Cornell University February 10, 2011 Philadelphia, PA Hosted by CIGNA Key Themes In terms of measuring the effectiveness of current BPO/ Shared Services implementation, participants felt that: It may not make sense to assess against best-in-class do we really want to have best-in-class address change self-service, for example? Success is really about adding more value; becoming more strategic. Cost is not the key issue. We are at our limits on cost, which means we can only make incremental gains in that area. The struggle is to figure out what we should be measuring. We are measuring many things, but probably none of them are the right things. Common measures SLA s Employee satisfaction Balanced scorecard Flexibility of systems to provide value not just cost reduction Linkage to corporate culture the view of On February 10, 2011, Brad Bell and John Haggerty facilitated a day-long discussion focusing on how companies approach HR for HR as well as the changing role of HR consultants. The session focused on the effectiveness of in or outsourcing processes, along with a discussion on business acumen and analytics. The working group was hosted by CIGNA and held in Philadelphia. It was attended by 18 individuals from 12 CAHRS partner organizations. These included Aetna, Ally, American Express, AstraZeneca, Boston Scientific Corporation, CIGNA, Darden, Fidelity, JPMorgan Chase Johnson & Johnson, Lincoln Financial Group and Shell. the workforce Most measures are transactional and focused on cost outsourcing 2.0 is about value, which means the metrics need to change; higher level, value-added metrics. But, these measures are difficult and time consuming to collect. Most participants agreed that when a company gets locked-in with a vendor and it is very difficult and painful. to switch. It s easier to make the switch if you own your own tools, but if the vendor owns the tools then there is much more of a disturbance. Across the group, participants were split in terms of whether processes are sourced or out-sourced. It is important to recognize the impact of the employee population. At CIGNA, for example, more than 80% of employees are professionals with advanced degrees who expect to serve themselves and are comfortable with web-based tools. This scenario may be very different than at other companies with different types of employee populations.

2 Page 2 Best Practices Wave approach Can be helpful to start small start with the investment in the technology platform and then gradually add features. With global implementation need to determine those areas that should be localized vs. those that can be standardized/generalized. What is countryspecific vs. global? Ownership of vendor management Important to manage relationships with vendors. Often responsibility is given to procurement, but they typically don t manage the relationships. Important to have feedback loop so that trends in employee issues/ questions or service delivery are surfaced and addressed. One team mentality It is important that people are on-board and share the vision, particularly at the senior leadership levels. Everyone in HR needs to take responsibility worst case scenario is that generalists portray outsourcing, COEs, & BPOs as the bad guys and not part of their HR. They position themselves as the problem-solvers or simply say not my problem it s their fault. Executives agreed that the shift to the business partner model has often been flawed. It s often hard to distance from the administrative/transactional tasks. It was described as a Catch 22: Trying to free up transactional duties, yet these are the tasks that managers see and how they reward HR. Thus, it is particularly important to educate managers and to stop holding their hands. For example, teach them how to give feedback and to coach.

3 Page 3 Business Acumen & Analytics Discussion What skills should be taught in colleges and universities to ensure that candidates are ready for their first (and subsequent) jobs? What level expertise do generalists need in the area of HR analytics to work effectively with the COEs and how do we build this capability? What does business acumen mean today? Capability to use the tools in the business Understanding how the company drives growth and the external factors that impact growth Knowledge of the regulatory environment Knowing how to use data, not just get it Technical skills Understanding the finances of the business An understanding of the total business system Awareness of the global context Understanding what data is needed to answer a question/solve a problem Moving from being a qualitative to a quantitative function Knowing what factors impact the quality of the data and the conclusions you can draw from it Knowing how to make a business case Understanding the scope of the business and how the different units fit together Ability to identify what metrics are important to HR and to the business Knowledge of the demographics of the workforce Comprehending the temporal aspect of investments how long does it take to produce a return What has changed in the last five to ten years? The biggest change has been in the expectations of HR in the past it was fine to be a functional expert, but today you need to understand what needs to be delivered to the business. How are companies assessing and developing business acumen? Used Hay to develop a competency model and assess against it with 360 system. Have some internal programs to teach business acumen, but most is learned on the job Two day courses run by senior leaders where they focus on levers in the market, analyze financial statements, etc Quarterly meetings to discuss financials calls run by senior leaders Course on benchmarks Business simulations with teams have to setup and run their own businesses How much functional knowledge does one need? Need both functional knowledge and general business knowledge Important to have broad knowledge of the function (more important than depth) Connectivity across people is critical for sharing knowledge and expertise People don t need to be experts, but they need technical knowledge and general business knowledge The best business partners are usually those that have both business acumen and technical skills

4 Page 4 Shouldn t overlook technical skills we have traditionally been strong in those areas but not the business acumen, so it is about bringing up the business skills to the same level not lowering our capability in the functional areas Given that we already have the technical expertise in the function, it may be that focusing on general business acumen makes sense to fill the gap in that area. But, what happens when those with the functional expertise walk out the door? What is the role of school/education vs. OJT? Both are important basic/fundamental skills can be learned in school and then are refined and applied through experience There is sometimes the view that the quantitative and business skills should be developed in school, and then the functional HR skills can be learned on the job. CIGNA s HR Transformation As part of the Working Group, John Murabito shared with the group CIGNA s transformation, which began in 2003 with his arrival as CHRO. At that time, the HR function was: Characterized by silos each business unit had corresponding HR staff; Managing in-house compensation and benefits, payroll, and other transactional services; and a large function 350+ people Through the transformation process, the HR function in 2011 is much different, in the following ways: Functionally integrated HR organization supporting operating company model; COE/Shared Service management of core HR processes; Business process outsourcing for more efficiency: Succession planning Payroll Benefits administration Talent management Portal, help desk Compensation planning Systems Fewer generalists and their role has changed more strategic; HR consulting pool; Smaller overall organization; Robust training and development arm (CIGNA University) focused on both internal and external customers; Provide more value at half the cost of A new CEO in 2010 has driven need for more integration, efficiency, and less cost to support the growth strategy. International business has grown to $2.5 billion

5 Page 5 Created an HR Consulting Pool: Strategic projects of defined duration Enterprise cross-functional projects Select high potential HR generalists for these learning experiences HR consultants partner with and mentor (rather than replace) generalists Serve multiple staff and business areas Sample HR Consultant Projects Acquisition Kronos Divestiture Intracorp IT outsourcing and health care reform Segmentation Highly leveraged competencies/skills for HR Consultants: Change leadership Verbal communication and presentation skills Process management Influencing skills Innovative management workforce planning At CIGNA in the future see the pool of consultants getting larger and the number of generalists shrinking. Reaction of both the generalists and the business to the creation of the HR consultants has been positive. Outsourcing arrangements have generally been successful at CIGNA. The Center for Advanced Human Resource Studies (CAHRS) is an international center serving corporate human resources leaders and their companies by providing critical tools for building and leading high performing HR organizations. CAHRS mission is to bring together partners and the ILR School s world-renowned HR Studies faculty to investigate, translate and apply the latest HR research into practice excellence.