HCM :21

MHRM

Conducted By
Prime On Line Pvt. Ltd
Introduction

 What is HCM: 21?

 Steps of HCM: 21
 Case Study
What is HCM 21?

Human Capital Management for the 21st Century

Propounded by a consortium called Predictive Initiative
Steps in HCM 21

There are six steps

 The Strategic Scan

 Capability Planning
 Process Optimization
 Integrated Delivery
 Predictive Measurement
 Analytics
1.0 The Strategic Scan

 This involves a systematic identification of factors that affect the working

of the company and therefore impact Human Capital Management
 HCM talks in terms of two types of factors – External & Internal
 As per the model these two factors impact the organization in three areas

 The areas are Human Capital, Structural Capital & Relational Capital

 The organization in turn needs to respond along the three areas

NB : Human capital - people

NB : Structural capital – assets that the company owns – machinery, patents
NB : Relational capital – relationship with suppliers, customers, government etc.
The Strategic Scan – An Illustration
Issue/
Issue Human Structural Relational
Organizational
Capital
External Factors

Labor supply

Economy

Globalization

Regulations

New technology
Competitors

Internal Factors

CEO’s vision

Culture

Capabilities

Leadership

Finances
The Strategic Scan – An Illustration
Issue/
Issue Human Structural Relational
Organizational
Capital
External Factors
Shortage of skilled 1.0 Identify potential Progressive 1.0 Search for
Labor supply workmen internal candidates outsourcing
Automation
agencies/firms
2.0 Internal training
2.0 Search for
consulting firms that
provide automation
solution

Internal Factors
Awareness level low Training/workshops Display boards Look for a consultant
CEO’s vision
 2.0 Capability Planning
 This is an integrated approach to workforce planning that considers
all significant external and internal factors , their likely impact and the
inter dependence of functions and sub functions
 The HCM 21 recommends segmentation of skill into
- Mission Critical (A few capabilities that are key to ongoing
success)
- Differentiating (Capabilities that separate you from
competitors)
- Operational ( Capabilities that keep the operation going)
- Movable (Capabilities that are less important and can be
outsourced)
3.0 Process Optimization

 Process Analysis can help raise efficiency and effectiveness of the HR function

 The HCM 21 recommends process optimization in subareas like

- Hiring
- Compensation
- Development

- Retention

 It may be noted that for any process optimization one needs to consider the
quality of inputs, throughputs and outputs
A Group Task

What could be the variables that we should consider for capturing and analyzing
the effectiveness of the hiring process?

Suggestion: Consider the quality of inputs, throughputs and outputs

A Group Task( Result)
SOURCES METHODS RESULTS

N M S E J W I G T A O B C P T

Al M I T 2 2 1 1

Bea J I G T O 2 2 2 2

Cee E I G A O 3 2 3 2

Didi N I T O 2 2 2 2

Earl J I O 1 1 1 2

Frank J I T 2 1 1 1

Gina W I G A O 3 2 1 2

Hal M T O 2 3 3 2

Isaac S I G A O 3 3 2 2

Jon E I G T O 2 3 2 2

Ken N I G T 1 2 2 1

Leo N I 2 1 1 1

N = Newspaper, M = Prof Magazine, S = Search, E = Referral, J = Job Board, W = Walk In

I = Personal Interview, G = Group Interview, T = Test, A = Assessment, O = Onboarding

B = Performance, C = Pay Increases, P = Potential Rating Score: 1 = low, 3 = high
T = Tenure: 1 = leave, 2 = stay
4.0 Integrated Delivery

 All Corporate objectives should be linked to departments who would own them

 Each connected function should set up supporting goals for each such objective
 For each such goal, function needs to specify supporting goals from other
departments
5.0 Predictive Measurement

Strategic

Operational Leading

Metrics
5.0 Predictive Measurement

 Three levels of Metrics

- Strategic Level ( example labor cost as a % of revenue)

- HR Operations (HR employee ratio)

- Leading indicators ( Engagement survey scores)

 Set SMART Goals for each indicator

 Monitor
6.0 *Analytics

Once proper metrics is in place and data is collected, it would be possible to

statistically analyze connections that may be there across various human capital
functions and outcomes. The techniques which are commonly used are

- Interdependence techniques like Factor Analysis & Cluster Analysis

- Dependence techniques like Multivariable Regression analysis like LR

* Predictive
Case Study – Ingram Content group(1.0)

Employee turnover had been a chronic problem for Ingram’s distribution

and fulfillment division for years, rising steadily until it hit a rate of 80%
percent enterprise-wide. These were blue collar covenanted workmen with
a total strength of around 2000 and an average salary of 26,000 USD pa

The HR Head rightfully decided to seek management attention by

highlighting the cost of attrition

Work in small groups and come up with a formulae which would be a

means for capturing the cost of attrition..Make necessary assumptions
Case Study – Ingram Content group (1.0)(Solution)

-The cost = Productivity loss on account of the capability gap between the
person who left and the new person. x no of persons who left in a year

Feedback new person starts from zero but picks up in 3 months.

So the new joinee’s productivity in the first 3 months. Is 50%

So the amount of money wasted per resignation is 26000/12* 3*0.5 = USD 3250

So the amount of money wasted in the year is 2000 x 0.8x 3250 = 520000 USD
Case Study – Ingram Content group(2.0)

Having calculated the cost of attrition, the HR Head was able to get the
attention and support of the management in launching a series of
interventions to reduce attrition.

Can you suggest what interventions were launched?

Case Study – Ingram Content group(2.0)

Interventions were launched in four areas

• Improvement in Hiring
• Leadership training for supervisors
• Compensation survey to align salary & benefits with market +
incentivise
• Enhanced Employee Engagement Activities