Download People measurement and reporting: From theory to practice

People measurement and reporting:
From theory to practice
Better people measures, better decisions, better business
Chartered Institute of
Management Accountants
Contents
Valuing your Talent
Context: the changing
world of work The business model
The Valuing your Talent
framework: from theory
to practice
5
9
14
20
The external stakeholder
perspective: roundtable
feedback22
Reporting human capital:
illustrating your company’s
true value –
executive summary
Where to next?
25
28
Appendix 1:
action case studies
29
Capgemini case study:
Building from expertise –
using in-house talent to
create a new approach to
managing and using data
30
Coca-Cola Enterprises (CCE)
case study: The thirst for HR
analytics grows
39
London Councils case study:
The power of expert networks 42
Network Rail: Building
the workforce of the future
through talent analytics
45
ASDA People analytics and the
changing business model
49
British American Tobacco
Building centres of excellence
for people analytics
53
Appendix 2: valuing
your Talent framework
People Measures
54
References74
About this report
This report was written by Edward Houghton, Research Adviser
at the CIPD, and Peter Spence, Performance Management Expert
at CIMA. We would like to thank the many business professionals
who participated in the case studies, roundtables and at various
engagement events across the period of the research programme.
3
4
Valuing your Talent
Valuing your Talent is a collaborative, industry-led
movement to build a greater understanding and appreciation
of how people create and drive value in business. We are
working with employers, investors and other stakeholders
from finance, management and HR to better understand and
demonstrate the benefits of human capital reporting and
people measures.
Published in 2014, Managing
the Value of your Talent: A
new methodology for human
capital measurement provided
an innovative approach to
exploring human capital value
in organisations, and detailed
the significant opportunities and
barriers facing organisations
today wishing to unlock the value
of their people. The research,
conducted by Dr Anthony
Hesketh of Lancaster University
Management School, included
an extensive study of senior
business leaders and a case study
exploration of leading global
institutions. This work laid the
foundations for the Valuing your
Talent programme, on which
this new work has been built.
Fundamental to the programme
is the belief that ‘talent’ should
not be reserved for high-flying
elite individuals, but instead that
all people have a role to play in
contributing to the success of
their organisations, whatever
its size or sector. Valuing your
Talent provides a framework
and methodology that enables
business professionals to
explore the full potential of their
workforce through the use of
key people measures, and will
deliver true value by improving
insight and decision-making
and encouraging more strategic
investment in people to achieve
business performance over the
short, medium and long term
whilst enhancing the wellbeing
of all employees.
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Above all, Valuing your Talent
seeks to deliver a fundamental
shift in the mindset of businesses
and investors alike, driving a
shared interest in transforming
how organisations value what
they often term ‘their most
important asset’: the knowledge
and expertise of their people.
The Valuing your Talent partners
Valuing your Talent is a collaborative project
bringing together the professional bodies for finance
and human resources. The work will help employers
better understand the impact their people have on
the performance of their organisation.
For more information about Valuing your Talent, visit the website
and follow us on Twitter and LinkedIn
www.valuingyourtalent.com
Twitter: @valuingtalent
LinkedIn: Valuing your Talent
Chartered Institute of Personnel
and Development (CIPD)
Chartered Institute of
Management Accountants
(CIMA)
The CIPD is the professional body for HR
and people development. The not-forprofit organisation champions better work
and working lives and has been setting the
benchmark for excellence in people and
organisation development for more than
100 years. It has 140,000 members across
the world, provides thought leadership
through independent research on the world
of work, and offers professional training and
accreditation for those working in HR and
learning and development.
CIMA is the world’s largest and leading
professional body of management
accountants. Our mission is to help people
and businesses to succeed in the public and
private sectors. CIMA has 203,000 members
and students in 173 countries and works at the
heart of business in industry, commerce and
not-for-profit organisations. CIMA has a strong
relationship with employers, and sponsors
leading research. CIMA is constantly updating
its qualifications, professional experience
requirements and CPD programmes. CIMA is
committed to upholding the highest ethical
and professional standards, and to maintaining
public confidence in management accounting.
6
Supported by:
Investors in People (IIP)
Chartered Management
Institute (CMI)
Investors in People is the standard for people
management. Since 1991 Investors in People
has defined what it takes to lead, support
and manage people well for sustainable
results. Comprising nine key management
indicators and a performance model to map
progression over time, assessment against
the standard is a simple way to measure,
track and benchmark performance. With
a community of over 14,000 organisations
across 75 countries, achieving the Investors
in People Standard is the sign of a great
employer, an outperforming place to work
and a clear commitment to success.
The CMI is the only chartered professional
body in the UK dedicated to promoting
the highest standards of management
and leadership excellence. With a member
community of over 100,000, the CMI gives
managers and leaders, and their organisations,
the skills they need to improve their
performance and create an impact.
In April 2010, strategic ownership of Investors
in People transferred to the UK Commission
for Employment and Skills (UKCES), on
behalf of the Department for Business,
Innovation and Skills. The UKCES are
responsible for the quality and management
of the Investors in People Standard.
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Context: the changing world of work
The world of work is changing and the way that
human capital is managed, measured and reported
on by organisations must also evolve. The global
outlook for organisations is one influenced by volatility,
uncertainty and increasingly complex relationships with
marketplaces and customers.
Global economic activity is
subdued (International Monetary
Fund 2016), and competitive
advantage is becoming even
harder to secure for multinational
organisations as its nature is
fundamentally shifting (McGrath
2013). How organisations
appreciate the value of their
human capital (the knowledge,
skills and abilities of the
workforce) is also changing.
The importance of human capital
to organisation, communities
and wider society cannot be
underestimated – it is one of the
most important determinants of
long-term economic success and
must be leveraged in combination
with other economic resources
over the short, medium and long
term to deliver value (World
Economic Forum 2015).
Businesses are under considerable
pressure from economic, social
and competitive factors to
improve their business models
and build more innovation,
agility and resilience into
their strategies and practice.
Against this backdrop, many
fail to make good use of a vital
resource in economies driven
by knowledge: human capital.
Work trends: how the
world of work is evolving
Recent research conducted
by the CIPD highlights the
trends which are believed to be
influencing how human capital
management will evolve in the
future. Academic and business
literature considers a variety of
forces which have the potential
to drive considerable change in
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the workplace, and it is in this
context that organisations must
now operate by maximising the
value it generates through
the knowledge and skills of its
workforce (CIPD 2015a).
If they don’t, it is unlikely
that organisations and wider
economies will flourish and grow.
Global organisations are investing
in the capability to meet the
needs of the future trends
detailed in Table 1. Using the
expertise of professional service
firms, they are exploring these
issues in detail and are adapting
their business models to fit
their future requirements. The
predictions of professional service
firms which advise some of the
world’s biggest organisations map
closely to the trends in Table 1.
Table 1: Trends and their potential impact on human capital measurement and management (adapted from CIPD 2015a)
Trend
Prediction
Impact on human capital management
and measurement
Utilisation of
technology
Steady growth in jobs that require degree
qualification
Management of knowledge capital and
individual human capital as opposed to units
of human resource
Demand-led business models grow in
prominence
Normalisation of 24/7 ‘always on’ services
Continual organisation change
Workforce
diversity
Ever increasing availability of customer
and employee data requiring sophisticated
analytics
Technology use for ‘always on’ working will
require specific employee knowledge and
capability, including autonomy and selfmotivation
Growing competition for entry-level jobs
Growing demand for flexible working
arrangements as working patterns evolve
Increased diversity of thought and
opportunities for knowledge-sharing
Increased requirements on organisations
to provide data as to how human capital is
developing and improving
Greater need for communication
technologies to link individuals to share
knowledge and skills and generate
organisation knowledge capital
Globalisation
Integration of talent management techniques People management and HR processes
from local scale to global scale with regards will become more project based – human
to culture and corporate management
capital utilisation will focus on the delivery
of discrete projects via matrix-based
Offshoring of jobs for efficiency savings and
collaborative working
to alleviate local skills shortages
Measures of culture on global scale will be
Mass movements of people due to increased
required to steer human capital development
political, social and environmental instability
towards strategy-based priorities
Industrial
change
Steady growth in the proportion of jobs that
require degree-level or professional skills
Evolution of business operating models to
provide demand-led services, matching
customers with (often independent)
contractors
Normalisation of 24/7 services, and remote
working to become standard practice
Ongoing organisational change, as the
business responds to the repercussions of
the changing external context
Individualism
Demand for better work–life balance with
a pattern that suits workers’ individual
circumstances
High-skilled employees expressing their
personal ambitions, rather than negotiating
working conditions via traditional collective
channels, such as trade unions
Both customers and employees expect
systems to flex to meet their needs
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Knowledge capital has more value, beyond
individual human capital, as organisations
look to capture the skills and expertise
of individuals in organisational systems,
processes and policies
Workforce skills and knowledge will require
continuous development and investment
through strategically aligned learning and
development practices
Evolving performance management drivers
needed to tap into the intrinsic motivators
of individuals, particularly beyond task- or
process-oriented performance measurement
Human capital management that is more
aligned to the needs of individuals, including
their development requirements, through
improved flexible working arrangements
Human capital development opportunities
will be a requirement for knowledge
workers entering the organisation, and
will become a fundamental part of the
knowledge business brand
Trend
Prediction
Impact on human capital management
and measurement
Social
responsibility
Greater alignment between society and
business agendas, with sustainable business
models becoming the norm
Human capital measures and reporting will
point towards the greater social good of the
organisation, and be used to demonstrate
the materiality of human capital to the
organisation
Pressure to introduce technologies for a
more efficient use of resources, such as with
reducing carbon footprint through smart
working initiatives
Core focus on managing reputation and
building trust to attract both customers and
talent
Quality of
education
Improvement of educational standards
worldwide, stimulated by governments
seeking to boost their competitive position
in the global marketplace
Overqualified individuals with high human
capital may need their expectations to be
managed as to the scope and potential of
their role
Greater onus on continued individual
development, lifelong learning, retraining
and multiskilling
Alternative forms of employment may also
need to be designed
Rise in accessible educational opportunities,
open universities and peer-to-peer learning
Diversity of
employment
relationships
Resource efficiency will drive greater
emphasis on management techniques that
drive long-term thinking and awareness
of resource issues and opportunities for
resource reduction
Diversity of working patterns, as well as the
types of employment contracts, driven by
the changing needs of organisations in when
and how they want to provide services,
as well as by the evolving expectations of
individuals about the ways of working
Two-tiered workforce, with the traditional
core comprising permanent staff,
complemented by a large group of
contractors and freelancers
Fragmentation of organisations into smaller
units, representing collaborative networks of
contingent workers
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Human capital development through
mentoring schemes and other forms of
workplace support to help new employees
integrate into the organisation and role
Customer service data will drive employment
demand, and matching of human capital
to customers will require data and
measurement of value created
More transparent collection and reporting of
human capital data with regards to diversity,
measuring aspects of thought diversity as
well as protected characteristics; increasing
emphasis on the development of diverse
talent pools against varied employment
types
For example, PwC researched
the future of work in 2015 and
found that business professionals
considered three significant
transformative factors which
they believe are exerting
pressure on their business
models: technology innovations,
scarcity of resources (including
the impact of climate change),
and shifting of global centres of
economic power. These factors
are thought to be driving rapid
change in many organisations
globally, creating opportunities
and challenges in new, previously
unconsidered ways. In their
research, PwC highlight three
theoretical scenarios in which
organisations will need to operate
in the future – characterised as
being fragmented or integrated,
and individualistic or collective
(PwC 2015) (see Table 2).
Table 2: Three worlds of work
Scenario
Characteristics
The blue
world
Corporate is king: big company
capitalism continues to grow as
individual preference overrides social
responsibility.
Integrated
Individual
The
green
world
Companies care: social responsibility
dominates the corporate agenda,
where concerns regarding climate and
demographic change influence the
strategy of organisations.
Integrated
Collective
The
orange
world
Small is beautiful: companies
break down into small collaborative
units, which build and sell specialist
expertise and products via larger
connected networks.
Fragmented
Collective
This research shows that there are radically different scenarios that
today’s organisations must plan to navigate. PwC note that to achieve
true competitive advantage, organisations must adapt and understand
their business model in each scenario. Businesses must heed the
information available to them, through external evidence such as this
practitioner-focused research, and look to include its thinking in their
strategy. Combining internal and external data will help to formulate a
clear view of what the future may hold, and it is this internal data which
may provide the greatest level of insight into how the organisation can
drive value through its intangibles.
12
The importance of
intangible assets
The companies which today
hold and create the most value
for their stakeholders are not
those with the most tangible
physical or financial assets –
instead, it is those companies
which manage the intangibles
effectively which hold the most
value, and which are driving the
knowledge economy. Research
which investigated the constituent
capitals of organisations on the
S&P 500 has shown how over
time the type of capital has
shifted towards intangible assets.
As of 2015, around 84% of the
value on the index is tied up in
intangible assets according to
corporate valuations, up from just
17% in 1975 (Ocean Tomo 2015)
(see Figure 1).
The value of organisations today
is clearly held in intangible assets,
and as such the way in which
they manage, measure and report
on their intangible assets is
changing. Entire business models
of organisations are evolving and
enabling value-creation in creative
new ways, revolutionising sectors
where value has been traditionally
locked into physical assets
(Hesketh 2014). A considerable
force for change has been the
emerging digital economy in
which digital technologies and
social media are rapidly changing
how consumers interact with
products and services, and have
in the recent past filtered into
the workplace, influencing how
employees work (CIPD 2013).
The gravity of this change is
stock. Recent research by CIMA
and the CGMA highlights that
Uber, the car service which
owns no cars, has been valued
in the past at US$51 billion
(CIMA 2016). Elsewhere in the
hotel industry, for example,
relatively young services such
as Airbnb are challenging the
established business models
of large hotel chains, and are
being recognised through highly
competitive valuations: in 2015
the service was offering 1 million
listings across 190 countries and
in October 2014 was valued at
more than US$13 billion, while the
Intercontinental Hotel Group, an
established brand and the largest
hotelier chain in the world, had
a market cap of US$10 billion
in March 2015 (Wallsten 2015).
Part of the ‘sharing economy’,
organisations such as Uber and
Airbnb demonstrate the rapidly
evolving landscape in which
organisations are now operating
and competing.
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Figure 1: Components of S&P 500
market value (%) (Ocean Tomo 2015)
100
83
68
32
20
16
17
32
68
80
84
1975
1985
1995
80
60
40
20
0
Intangible assets
2005 2015*
Tangible assets
*Source Ocean Tomo, LLC January 1st 2015
To understand exactly how
organisations can operate in
this changing environment
and make the most of the
valuable human capital they
have access to, we must look to
their business models (Ovans
2015). These models represent
how organisations approach
markets, customers, competitors,
technology, values and
behaviours, and are an important
indication of exactly how strong
or weak an organisation and its
strategy may be (Drucker 1994).
‘Business is all about
money and people. Money to
build the resources and relationships
to create and preserve value
through their business models
and, since nothing happens
without people, people to bring
their business models to life.
Management accounting has long
been concerned with joining the
dots between non-financial drivers
across business models and financial
performance, which is why CIMA is
proud to partner with the HR and
management professions, together
with boards, investors and other
key stakeholders, to advance
knowledge on how people create
value in businesses.’
Charles Tilley Executive Chair of the CGMA
Research and Practice Foundation
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The business model
An organisation’s business model sits at
the heart of its business strategy, and at
the centre of the business model sits people.
Valuing your Talent is about ensuring that
all organisations measure, understand and
communicate how effectively they are
making the most of the knowledge and
skills of their workforce.
At an organisational level,
business leaders and their
stakeholders need to understand
how the business uses the
resources available to it to
create value. It is the ability of
organisations to create value that
generates financial returns to the
providers of financial capital, and
provides security to the enterprise
to continue to generate further
value in the future.
The business model articulates
what value the organisation
provides, how that value is created
and what resources and activities
are required to deliver that value
– in short, what is required for
the organisation to meet their
objectives and obligations. The
business model demonstrates
to business leaders, investors
and other stakeholders how the
knowledge, skills and experience
of an organisation’s people are
the foundation of this valuecreation and growth over the
short, medium and long term.
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Understanding the business
model, therefore, is integral to
understanding and achieving
business success.
People in the business
model: integrated
reporting and integrated
thinking
The International Integrated
Reporting Framework
(International Integrated
Reporting Council 2013) defines
an organisation’s business model
as its:
‘system of transforming inputs,
through its business activities, into
outputs and outcomes that aim to
fulfil the organization’s strategic
priorities and create value over
the short, medium, and long term.’
It shows how a firm defines,
creates, delivers and captures
value for, with and to its key
stakeholders. It is important
Table 3: Stages of the business model
Stage
Description
Inputs
Inputs are the resources, relationships and other forms
of capital that the organisation depends upon or
which provide a source of differentiation. Integrated
reporting describes those inputs that are key to
understanding the strength of the organisation’s
business model. Human capital – people and their
interactions, skills and experience – is a fundamental
component of any organisation’s business model.
Activities
Central to the business model is understanding
how inputs are converted into outputs through
business activities. These activities may include the
planning, design and manufacture of products or the
deployment of specialised skills and knowledge in
the provision of services. Business activities are what
the organisation does to create value for itself and its
stakeholders (including society).
Outputs
An organisation’s outputs can be identified as its key
products and services, as well as any by-products,
waste or emissions that require discussion, based
on how important they are in understanding the
robustness of the organisation’s business model.
Outcomes
Actually producing something or making a service
available does not necessarily create long-term
value. What is crucial is the internal and external
consequences that occur as a result of the
organisation’s business activities and outputs –
their business outcomes. Do customers purchase
the output? Do they make repeat purchases or
recommendations to other potential customers?
And does the output generate brand loyalty?
Outcomes can be both internal (employee satisfaction
and engagement, revenue) and external (customer
satisfaction, tax payments) as well as either positive
or negative.
It is this need to identify and describe outcomes,
particularly external outcomes, which drives an
organisation to consider the kinds of capital it uses
beyond just those that it owns or controls.
to consider the stages in the
business model, which can be
defined as shown in Table 3.
Integrated reporting: <IR>
The increased importance
of human capital within
organisations, as well as its
links to the other organisational
resources that drive business
value, is reflected through
the Integrated Reporting
initiative or <IR>.
The integrated reporting
approach illustrates the way in
which the business model creates
value from the six capitals, as
designed by <IR>. Of central
importance to the business model
process is the role of people
management and the people
development process, as part
of the HR or people function.
Integrated reporting <IR>
provides a format for
organisations to report on how
their strategy, performance and
prospects enable their business to
create value in the short, medium
and long term. It promotes a
more cohesive and efficient
approach to corporate reporting
by providing a broader range
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of higher-quality information to
providers of financial capital.
<IR> aims to highlight the
complex inter-relationship
between human capital and
other forms of capital, such as
financial or manufactured, and
how these relationships create
value within organisations.
Although <IR> is primarily used
by those providing funding,
an integrated report will be
of benefit to a wide range of
stakeholders, including employees,
customers, suppliers, local
communities and policy-makers.
The capitals
An integrated report aims
to provide insight about the
resources and relationships
that are used and affected by
an organisation in the course
of its business activities – these
are collectively referred to as
the ‘capitals’.
The capitals most commonly
reported on by organisations are
financial and manufactured, but
<IR> takes a broader view by also
considering intellectual, social and
relationship, and human capitals
(all of which are linked to the
activities of people), and natural
capital (which provides
the environment in which the
other capitals exist).
Figure 2: The six capitals (adapted from Interantional Integrated Reporting Council 2013)
Financial
Manufactured
Intellectual
the funds
available to an
organisation
physical
objects that
organisations
can use in the
production of
goods or the
provision of
services such
as buildings,
equipment or
infrastructure
organisational
knowledge-based
intangibles such as
copyrights, patents,
tacit knowledge and
procedures
17
Human
Social and relationship
Natural
people’s
competencies,
experience and
motivation to
innovate
the relationships, networks
and ability to share
information, including
common values, brand
reputation and key
stakeholder relationships
renewable
and nonrenewable
environmental
resources
18
Value-creation
The value-creation process
Traditionally the meaning of
‘value’ has been associated with
the present value of expected
future cash flows. Integrated
reporting <IR>, however, is based
on the understanding that future
cash flows are dependent on
a wider range of capitals and
relationships than those directly
associated with changes in
financial capital.
<IR> combines an emphasis
on conciseness and future
orientation with a strong focus
on strategy, the business model
and value-creation. It is an
organisation’s business model
which is the driving force for
value-creation. However, the
business model does not exist
in isolation; it operates as part
of a system together with the
organisation’s mission, its vision
and its governance structure.
‘Value’ for <IR> encompasses
other forms of value that the
organisation creates through
the increase, decrease or
transformation of the capitals.
Each of these will ultimately
affect financial returns. It is not
the purpose of an integrated
report to measure the value of an
organisation or of its capitals, but
rather to provide the information
that enables report users to assess
the ability of the organisation to
create value over time.
The organisation’s strategy
identifies how it intends to
maximise opportunities and
mitigate or manage the risks
identified in the external
environment. Continuous review
of all these elements, together
with internal measures such
as performance measurement,
results in a system that is not
static. <IR> aims to provide the
information required for business
decision-making on all the
elements of this value-creation
process. This includes, crucially,
the interactions, connections and
19
trade-offs that occur between
each element and each of the
capitals over the short, medium
and long term.
<IR> makes transparent the
connectivity of information and
the interdependencies between
the various forms of capital and, in
so doing, enables a more efficient
and productive allocation of
capital, both between businesses
and within businesses.
Defining value for
the business
Defining value involves identifying
the unique value proposition
of the business, linking this
unique value proposition with its
customers and other stakeholders
and designing, developing and
refining a business model fit to
serve its customers and other
stakeholders. The purpose of
the business defines what it
is in business for and focuses
on its core capabilities, which
must be aligned to its business
model. Not all customers and
stakeholders are equal. Some will
best be served by competitors,
for example. So, the business
must rank and prioritise to clearly
identify its primary customer and
key stakeholders, which must
include its employees.
Creating value depends on the
capability and infrastructure
of the firm. It usually involves
motivating and mobilising
partners identified when
defining value, and locating and
accessing resources, markets
and technologies needed by the
business for creating its unique
customer value proposition. To
convert these inputs into outputs,
the business must design,
develop and deploy processes,
initiatives and activities that
provide the infrastructure to
convert partner inputs and the
business’s resources into goods
and services.
The resources available to any
business are the six capitals,
as illustrated in Figure 2. A
combination of some or all
of these capitals is always
required to generate value. An
organisation’s strategy describes
how a business plans to deliver
value over time and its business
model is its mechanism for
executing its strategy.
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In developing plans to implement
strategy, HR and finance must
clearly define what will be
required by human capital in the
implementation of the business’s
strategy. This includes the
formulation of people initiatives,
people process refinements
and analysing ongoing people
activities to deliver the business
outcomes targeted. This is the
people plan or strategy.
Businesses are good, or getting
better, at thinking about and
measuring the value of the ‘other
capitals’, described in Figure 2, in
an integrated way but deal with
human capital separately. If the
planning and management of
human capital is detached from
the processes, initiatives and
ongoing activities of the rest of
a business, it becomes difficult
to gain an understanding of the
value contribution of human
capital as part of an integrated
whole. It is vital that organisations
appreciate the value generated
by human capital as well as that
of the other five capitals. This
is where Valuing your Talent
can help.
'People are fundamental to the success
of organisations today: their knowledge,
skills and experience are central to driving
organisational success, but we still don’t have
a common language in business to describe
their importance and value. While there is now
more focus on people metrics, without a more
common framework and language it is hard to
connect across business on this shared agenda.
Equally important, is the fact that we need to
enable better engagement with all stakeholders,
including investors, regulators, customers
and even future employees, about how we
are developing the workforces for the future,
building resilient organisations and cultures,
and aligning to improve business outcomes.
This includes important issues from improving
productivity to building greater trust and
transparency. The Valuing your Talent initiative
which brings together the different functions
and stakeholders to develop a common
framework is an important step towards
defining a common language, and agreeing
exactly how we express the importance of
people to business today'
Peter Cheese Chief Executive Officer
Chartered Institute of Personnel and Development
21
22
The Valuing your Talent framework:
from theory to practice
An organisation’s people are its unique
resource. People can learn, develop and grow
– they are the only part of a business that can
improve itself and they are fundamental to
creating value in organisations.
People measures, and the field
of human capital analytics, can
help business professionals to
understand how purposeful
investment in the workforce
can create and preserve this
value, and in doing so, improve
productivity, innovation and
business performance.
The Valuing your Talent framework
enables business leaders,
managers and investors to better
understand an organisation’s
people management strategy
and the ways in which it drives
business performance. It
provides a basis for conversation
between all parts of the business
to understand how best to
‘join the dots’ and unlock the
value of their people.
Updating the Valuing your
Talent framework
Managing the Value of your
Talent: A new framework for
human capital measurement,
published in 2014, set the
foundation of the first Valuing
your Talent framework.
Building on the conceptual
model theorised in that report,
the updated framework
represents modifications
advised through a series of
case study interviews and
roundtable engagement events.
The fundamental structure
of the framework remains as
originally devised, with a clear
link to the business model
process emphasised through
the refinement of outcomelevel strategic measures. The
framework now includes greater
detail of the quality and types of
people measures operationalised
in practice today.
23
The Valuing your Talent
framework: driving value
through people insights
The framework (Figure
3) is made up of the four
levels corresponding to an
organisation’s business model:
its inputs, activities, outputs
and outcomes. The first level
represents basic people data and
fundamental aspects of people
strategy. As organisations move
up the framework, each level
offers greater insight, moving
from people strategy to business
strategy and increased business
impact.
The framework describes the
measures that an organisation
may use and illustrates their value
to the organisation by positioning
them in a business model
hierarchy. The four key stages
in the framework are inputs,
activities, outputs and outcomes,
which ties directly to the business
model stages as discussed earlier:
• Inputs: Inputs are the
fundamental building blocks for
achieving value through people.
At any point in time, this is
the stock of human resources
that an organisation needs
to build from to sustain and
improve overall organisational
performance, and to respond
to new opportunities and
challenges. This is the most
basic level of measures available
to an organisation.
They provide the means for
evaluating the impact of the
human capital development
and people management
processes at the activities
level, and describe how the
return on those investments
can be improved, optimised
and adapted to meet an
organisation’s ongoing needs.
• Outcomes: Outcomes tell
organisations and their
stakeholders whether outputs
are translating into value. Value
to the organisation will include
financial, human, intellectual,
social, enviromental and
customer value, and will be
prioritised according to the
business model operated by
the organisation. Outcomes
measures describe how the
organisation is sustaining itself
to deliver value not just for
today, but into the future.
• Activities: Activities are the
key investments and processes
that organisations choose to
make to ensure their people
are able to work productively
and healthily, and deliver value
for all of the organisation’s
stakeholders. Data at the
activities level includes tangible
information about the processes
through which human capital
is mobilised through people
management processes.
Valuing your Talent is designed to
be a flexible tool for organisations
to apply in various situations and
contexts. The framework does
• Outputs: Outputs are the
results of the investments
in activity-level processes.
not propose a one-size-fits-all
solution, given the simple fact
that organisations will all have
different needs, (Hesketh 2014).
The flexible approach means that
organisations are not encouraged
to apply the methodology in
a tick-box fashion. Instead,
professionals should look to apply
the concepts of the framework to
their business and, through using
their own professional judgement,
decide which areas of the
framework are most appropriate.
Ultimately, what Valuing your
Talent offers is a tool through
which an organisation can work
through the choices it needs to
make as it strives to build the
capabilities which are aligned
to its objectives, and highlights
through improved data the areas
of investment in which attention
should be placed.
For more information about the
framework and to see example
people measures, see Appendix 2.
Table 3: The Valuing your Talent framework
Value-creation, risk and opportunity
Innovation, agility
and resilience
Organisation
performance
Culture
Outcomes
Leadership capability
Workforce performance and
productivity
Engagement and well-being
Business operating
model
Outputs
Attraction and
recruitment
Performance
management
Learning and
development
Reward and
recognition
Employee
relations
Employee
welfare
Knowledge
management
Organisational
design and
development
Workforce
planning
Activities Measures
Workforce composition and
diversity
Workforce costs
Regulatory compliance
Input Measures
24
Workforce potential
‘The number one driver of productivity
and business growth is the quality of
management and leadership, because
that’s critical to how far organisations
get the best from their people. But if
managers don’t have sight of good
people measures, they have a huge blind
spot about performance and can’t make
the best decisions about their business.
The Valuing your Talent framework gives
managers a clear model for talking with
colleagues in HR and finance about
what they need to measure and report
when it comes to their people.’
Ann Francke Chief Executive Officer
Chartered Management Institute
25
The external stakeholder perspective:
roundtable feedback
People measures describe the way in which the workforce generates
value for the organisation. We convened a number of Valuing your
Talent roundtables to explore how organisations are tackling the people
measurement and reporting challenge, and to investigate how the Valuing
your Talent framework may be operationalised in a number of settings.
Discussions at each session were
guided by five key questions:
1
2
We hosted roundtables in a number of locations
and were focused to engage a number of business
professional cohorts (see Table 4).
What are some of the challenges and
opportunities that you are facing with regards
to people measurement and reporting?
Table 4: Roundtable information
Cohort
How would you apply the Valuing your Talent
framework in your organisation?
3
What information would you look to explore
using the Valuing your Talent framework?
4
Which measurement categories would be
most useful to define and standardise in your
industry?
5
Which measures in the framework would help
your organisation to drive value-creation?
Number of
attendees
Roundtable 1
13 October 2015
London
6
Roundtable 2
16 October 2015
Birmingham
6
Roundtable 3
20 October 2015
London (Hospitality)
12
Roundtable 4
10 November 2015
London (Financial)
7
Roundtable 5
19 November 2015
Manchester
4
The facilitated roundtable discussions allowed
‘deep dives’ into parts of the Valuing your Talent
framework and engaged leaders and practitioners to
explore new research and content in an open forum.
Discussion at each event focused around four
broad themes, which are summarised below.
26
Feedback on the
framework
Feedback on the utility of the
framework was positive, with
many attendees across the
roundtables reflecting that their
organisations required a stepchange in their approach to
measuring and reporting people
data. Attendees also felt that
the measures in the framework
broadly described the data that
they currently use, or aspire to
use in the near future. Participants
recommended a number of
ways by which the framework
could be improved or applied
to organisations in practice:
• Simplify the language in the
framework to describe real
people processes and activities
which professionals in all
disciplines will understand.
• Clarify the purpose of the
framework through the
design; use the structure
to illustrate progression
towards the objective/goal
and explain the intended
outcomes that will come from
applying the framework.
• HR professionals believed that
some measures are too focused
on financial performance, and
prefer to see an outcomelevel measure concerned with
improving workforce skills and
capability, alongside financial
measures of performance. They
also noted the importance of
culture, and that a number of
the measures in the framework
are likely to interact to directly
and indirectly demonstrate
culture in different ways.
• Finance professionals reflected
that they want the framework
to tie directly to business
outcomes, and include clear
language of financial measures
that may be of value to users
of the framework. They also
reflected that culture is a hard
concept to articulate through
measurement, although they
agreed that measuring it is
fundamental to driving business
performance over the short,
medium and long term.
• Connect more clearly the
outcomes of the framework to
the business model: show how
investment in aspects of the
business model can improve
success against defined business
and strategy objectives.
27
Barriers to more
effective measurement
and reporting
A theme throughout many of the
roundtables was the need for
clear language to articulate the
capitals and how they interact and
work together to generate value.
HR and finance professionals
reflected on the importance of
the relationship between their
professions and functions, but
noted that there is some way
to go to come to agreement
on the type of language for
communication and reporting.
A number of participants noted
that the framework is a potential
route to break down the barrier
of inconsistency in language and
unclear people metrics.
Consultants and those working
across professions in an advisory
capacity noted alignment and
clarity are vital if the business,
including other professions, is to
engage and use the framework.
Without alignment, consultants
felt that vital information that
can enable the business to
operate optimally may be
missed. Experienced in working
across sectors with various
clients, consultants noted that
many human capital issues can
be considered ‘horizontally’ –
operations at the same stage in
the value chain can be present
across different functions and
business units – and ‘vertically’ –
meaning that throughout the value
chain there are recurring issues
related to the same human capital
challenges. Consultants believed
that the framework can help
alleviate issues on both of these
planes, but show the connections
between value-adding processes
within the human capital value
chain and the measures which
can be developed to evaluate
and improve human capital
management processes.
Differences across sectors
and contexts
Technology implementation
was believed to play a fundamental
role in enabling human capital
measurement to be successful.
Without clearly defined technology
and systems which enable
measurement and management of
data, many participants reflected it
would be difficult to move towards
consistent and more standardised
ways of measuring and reporting
on data.
Sectoral differences were also
highlighted during the roundtable
events. For example, participants
noted that in the financial services
measures of interest may include
those related to risk measurement
and demonstrating cultural
improvement. This was considered
different for the manufacturing
and utilities sectors, where the
measures believed to be of
more interest include health and
safety and workforce capability.
Finally, the hospitality roundtable
illustrated that a key indicator
of workforce performance is
customer service data – within this
sector there needs to be a direct
link between organisation culture
and customer outcomes.
28
Roundtable summary
Overall consensus from the
roundtables was that the degree
to which the framework could be
implemented is dependent on
the maturity of the organisation
with regard to human capital
measurement and reporting. Many
participants reflected that it is
well suited to driving performance
in larger organisations, and if
it is to gain a wider audience it
should be built with elasticity
and adaptability, with flexible
measures that can be used to
different degrees across sectors
and organisations.
The key question that roundtables
focused on was that of value:
where in the framework can
organisations determine value
and materiality? This forms
the basis of research and
development moving forward.
Reporting human capital: illustrating your
company’s true value – executive summary
In 2016 the Valuing your Talent partners commissioned
Ulster University Business School to explore the type and
quality of FTSE 100 human capital disclosures. The research
explored how human capital information is shared through
corporate reporting, and mapped whether quality of
reporting is changing over time.
Introduction
An organisation’s people are
its unique resource. People can
learn, develop and grow – they
are the only part of a business
that can improve itself and they
are fundamental to creating
value in organisations. People
measures, and the field of
human capital analytics which
looks to measure the value of
people’s knowledge, can help
organisations to understand how
purposeful workforce investment
can create and preserve this
value, and in doing so, improve
productivity, employee well-being
and commitment, innovation and
business performance.
Recent research from both the
CIPD (CIPD 2016a) and the Office
for National Statistics (ONS
2016) indicate an increasingly
buoyant labour market in the UK.
For example, according to the
official February 2016 statistics
from the ONS, unemployment in
the UK fell by 60,000 between
October and December 2015 to
1.69 million. Furthermore, over
half of the employers in the latest
CIPD representative survey,
investigating the state of the UK
labour market, indicated that
amongst over 1,000 employers,
hiring difficulties are becoming
more commonplace and what are
termed as ‘hard-to-fill’ vacancies
are also on the rise in many
economic sectors.
Given this background, ensuring
that organisations understand
and report in a transparent way
to existing and prospective
employees, shareholders and
other interested parties on their
human capital (HC) assets is
becoming increasingly important.
Additionally, the rising number of
high-profile scandals illustrating
poor or unethical behaviour
involving employees has
resulted in increasing scrutiny of
organisations from both media and
government agencies. In summary,
organisations need to take the
issue of HC reporting seriously and
understand that key stakeholders
need to be able to access true and
accurate company information.
Purpose and methodology
Valuing your Talent is helping
organisations realise the full
potential of their workforce
through understanding and
measuring the impact and
contribution of people to
business performance. The
business-led initiative is driving
a greater appreciation of human
capital in organisations, and is
enabling organisations to better
appreciate the value of their
workforce, so as to drive more
sustainable investment in people
and organisations. An important
consumer and beneficiary of
human capital data, alongside
business and employees, is
the investor community, which
must appreciate both present
and future human capital
value in their valuations.
This study was commissioned to
assess the current standard of
HC narrative reporting amongst
the FTSE (Financial Times Stock
Exchange) 100 companies and to
ascertain if the most up-to-date
guidelines (see main report) have
improved current practice. After
undertaking a comprehensive
review of the literature relating
29
to HC and its key constituents in
any organisation, an analytical
framework was developed to
allow us to carry out a systematic
content analysis of key HC terms
in the annual reports of the FTSE
100 companies in the UK. The key
HC elements were grouped under
four main categories: knowledge,
skills and attitude (KSA), human
resource development (HRD),
employee welfare/stability, and
employee equity. To enable us
to understand and calculate any
change in how HC was reported,
we reviewed the 2013 and 2015
reports of these companies.
Additionally, to further augment
our understanding of HC
narrative reporting amongst
these companies, we carried
out an analysis of three major
media outlets: the BBC website,
the Financial Times and The
Economist. This analysis was
designed to allow us to compare
and contrast companies’ annual
reports with media outputs
and ascertain if the companies
concerned were reporting HC
issues accurately, particularly those
that might be linked to ‘workforce
risk’ factors such as poor people
management practices, negative
employee relations incidents,
toxic organisational cultures
or inadequate training and
development provision.
Findings
The research shows that there
has been an overall increase
in the reporting of HC issues,
particularly in the area of HRD
(see Figure 3); however, the item
reported upon that showed the
largest increase comes under
the heading of
employee equity,
namely human
rights, which
had increased by
127%. Within the KSA category,
the biggest increases over the
two time periods were for the
key terms of innovation (41%),
entrepreneurship (26%) and
flexibility (20%). In the employee
welfare category, the biggest
increases were for the key terms
of ethics (22%) and employee
well-being (21%). Surprisingly,
corporate social responsibility
showed a decline in reporting
of –16%. In the employee equity
category, equality had increased
by 34% and diversity by 29%.
Finally, in the workforce risk
category, which was made up
of key terms from the other
categories, the biggest increases
were in talent management (43%),
succession planning (32%) and
ethics (22%).
On a sectoral basis, companies
working in the areas of property,
recreation and what was
categorised as ‘other’ saw the
biggest increase in their HC
reporting (see Figure 4). However,
in a large number of cases
companies had actually reduced
the number of references to HC
issues (see Figure 5). Companies
also had different ways of
referring to, and mitigating
against, workforce risk, with the
three main areas seen as relevant
to HC being health and safety,
ethics and the recruitment and
retention of key employees.
Following the media analysis,
it was clear that while some
companies’ reports reflected
stories appearing in the media,
others left out important details
or did not report an adverse
incident at all.
When we analysed various
categories in more depth, it
was clear that a number of
HC issues attracted particular
attention and there were
many specific examples of
excellent reporting practice:
• In the general category of
HRD we found clear evidence
that organisations are
focusing on workforce and
succession planning. There
were many instances of good
practice where companies
reported on the value of
successful talent pipelines.
• In terms of employee welfare,
there were a number of
consistent elements relating to
employee engagement referred
to by companies. Although the
traditional employee survey
was still a common occurrence,
alternative methods are being
reported on – for example,
qualitative methods designed
to understand employee
commitment and motivation
which are being used to
understand employee voice.
• Again under the employee
welfare general category,
companies attached a high
importance to illustrating how
they cared for the well-being of
their employees. We found clear
evidence of companies going
beyond statutory health and
safety requirements in order to
ensure employee welfare.
• There was also clear evidence
that in terms of the KSA
category, many companies
are extremely focused upon
understanding the capabilities
of their workforce and in their
reports frequently illustrated
how their approach to skills
development is connected
to risk issues such as skills
shortages. The report also
detailed mitigation activity
against these workforce risks.
• An important issue that
emerged under the employee
equity general category related
to human rights. Our study
found that some companies
clearly understood the vital
30
importance of looking after
employee human rights
and adopted a stakeholder
approach, which allowed
them to develop policies that
were aligned with the needs
of employees, suppliers,
customers, trade unions and
activist organisations.
• Also under the employee
equity general category we
found numerous instances in
company reports evidencing
formal mechanisms to promote
diversity. It was clear that
innovations such as diversity
councils and enhanced training
and development programmes
were designed to investigate
and improve issues related to
equality and diversity.
Conclusion and
recommendations
This study has shown
that both the quantity and
quality of HC reporting
has increased across the
FTSE 100 companies
between 2013 and 2015,
although whether this
increase may be solely
attributed to changes in
legislation is open to question.
Moreover, given these findings,
it would seem that FTSE 100
companies are addressing the
inadequacies regarding HC
issues, which have been voiced
in relation to the content of
annual reports. It is clear from
our analysis that the majority of
FTSE 100 companies are doing
more than simply fulfilling their
statutory duties in terms of
reporting. It is also clear from
our analysis that companies are
conscious of FRC 2014 guidance
(FRC 2014) and corporate
governance codes that are
drawn up by major institutional
investors (Tricker 2015).
However, even though it would
appear that there has been an
overall increase in HC reporting,
it is debatable whether investors
and other stakeholders will be
able to make informed decisions
based on what are, on the whole,
generally positive reports on
Figure 1
Change in reporting (2013–15)
across the HC and workforce risk
categories (%)
30
a variety of HC issues. Indeed,
when we carried out our media
analysis, we found that although
the majority did cite incidents
that could be labelled under the
workforce risk banner in their
reports, some organisations
seemed to avoid reporting HC
risk incidents that appeared in
the media. We believe that this
approach is being chosen so as to
minimise the impact of the events
on the firm’s corporate reputation
and share price, and to avoid
deterring potential investors who
may pay particular attention to
annual reports.
With this in mind, the key
recommendation from the study
is that companies continue
to focus on the reporting of
HC issues, but adopt broadly
consistent terminology to
describe the human capital
items, thereby making universal
comparison easier. However, this
does not mean that they should
all use the same wording or
take a ‘boilerplate’ approach to
HC reporting, which we believe
would not adequately reflect the
contextual nature of the HC issues
present in organisations.
Ultimately, we feel that our
findings have shown that
companies are reporting many of
the elements and metrics in the
Valuing your Talent framework
(CIPD 2016b). In addition, this
model may provide a useful
foundation for HC reporting in the
future and may offer a solution to
the challenge of communicating
HC issues that are of considerable
material importance to
organisations today.
About this report
Reporting Human Capital:
Illustrating your company’s true
value by Professor Ronan McIvor,
Dr Martin McCracken and Mr Tony
Wall of Ulster University Business
School is available now at
www.valuingyourtalent.com
Figure 4
Change in reporting (2013–15)
across the HC and workforce risk
categories (%)
30
26
25
15
15
10
6
5
20
15
24
23
20
24
23
26
25
0
15
Knowledge, skills and abilities (KSA)
10
Human resource development (HRD)
6
Employee welfare
5
Employee equity
Workforce risk
0
Knowledge, skills and abilities (KSA)
Human resource development (HRD)
Employee welfare
Figure 5
Employee
Increase
in HCequity
reporting across sectors (%)
Workforce
risk
50
41
37
40
30
30
19
20
10
22
20
18
3
6
4
5
1
0
Mining
Defence
Retail
Construction
Manufacturing
Property
ICT
Transport
Financial
services
Energy
Recreation
Other
Decrease
No change
Increase
Figure 6
Change in reporting for the companies over the
categories from 2013 to 2015 (%)
76
80
65
70
58
60
50
40
42
33
30
23
21
21
20
10
0
76
74
3
2
0
Knowledge, Human resource Employee
skills and
development
welfare
abilities (KSA)
(HRD)
31
3
3
Employee
equity
Workforce
risk
Where to next?
Looking ahead, Valuing your Talent will build on all that we have achieved
so far – reinforcing relevance and driving impact for the leaders and key
decision-makers in business and other organisations, as well as investors
and other stakeholders.
Valuing your Talent recognises
that all value is created through
people – so identifying key people
measures, applying them to
business decisions, and reporting
on them consistently to external
stakeholders should be a central
concern for all organisations. We
recognise, however, that all too
often this is not the case.
Through our work to date we
have identified a number of key
measures and developed the
Valuing your Talent framework
to provide a platform which
supports finance, HR and
general managers, informed by
rich dialogues and supporting
research, to provide invaluable
insight and powerful case
studies. We are enormously
grateful to the UKCES in
particular for their significant
contribution as cornerstone
partners for Valuing your Talent
in this exciting and critical first
phase of the programme.
In taking Valuing your Talent
forward, we are committed
to continuing to build the
foundation of support to enable
organisations to improve practice,
by recognising that organisational
success rests mainly on two
things: money and people:
money, to build the resources
and relationships to create
and preserve value through
organisation business models, and
– since nothing happens without
people – people, to bring their
business models to life.
Reflecting our future priorities
for Valuing your Talent,
we will be developing two
related areas of focus:
1 convening a leadership team
of chairmen, CEOs, investors
and other key influencers
and stakeholders, as well as
CFOs, HRDs and others, to
champion and advocate for
the programme, and lead a
movement of change towards
the better measurement and
reporting of human capital
2agenda-setting thought and
practice leadership, focusing on
identifying the next-generation
people measures which will
be critical for the creation and
preservation of value through
the business model.
We therefore look forward to
broadening and deepening
the community of interest and
engagement and working closely
with the business community
to deliver real change in how
organisations value their talent.
32
Appendix 1:
Appendix 1: Action case studies
We conducted a series of case studies with organisations
to explore how HR and finance are approaching human capital
measurement and reporting in practice.
The case studies developed
were used to update the Valuing
your Talent framework and
to encourage more effective
utilisation of people data b
­y
organisations.
Themes explored through the
case studies include:
• Human capital measurement,
which explored the measures
which are in common use in
HR and finance, how they are
defined, and whether they
are being standardised across
organisations and functions.
• Impact of human capital
insights, which explored how
human capital data is informing
the development of insights
from analytics and whether
analysis processes are delivering
value to the organisation.
• The future of HR analytics:
under this section business
professionals were asked to
consider how they believe
people analytics will change in
the future, and if they expect
their business to continue
to invest in people analytics
capability.
• Human capital analytics and
reporting, which includes
understanding of the analytical
methods being used, how
HR analytics activity is
being resourced, and the
types of capability available
to conduct analytics.
33
Six case study organisations
participated in the research:
• Capgemini
• Coca-Cola
• London Councils
• Network Rail
• ASDA
• British American Tobacco.
Appendix 1
Capgemini case study: building from expertise –
using in-house talent to create a new approach to
managing and using data
Capgemini employs over 180,000 people across 40 countries and is a global provider
of consulting, technology and outsourcing services. Built around highly experienced and
skilled technical experts, the organisation relies fully on the expertise of its workforce to
drive performance and continue its trend of strong financial performance.
The challenges that Capgemini
face are similar to those of
many operating in the fluid and
uncertain economic and social
environment in which global
organisations must now function.
For a business with such reliance
on human, knowledge and
intellectual capital, there is a firm
desire from the leadership teams
to understand more about the
workforce, and how they can be
mobilised through HR activity,
to increase the productivity and
performance of the business.
The business does, however, have
to tackle some of the common
challenges other businesses will
recognise, not least the issue
of siloed working, which can
prevent teams from collaborating
and working more productively
together. Nowhere is this truer
than in the HR function, where
the different activities which the
HR teams manage sit separately
to one another with varying
degrees of overlap and cohesion.
This structural and functional
separation of activity meant that
the way teams connect and use
data was also very different.
Reporting was ad- hoc and
piecemeal, and the language that
the business used to speak about
people concepts was equally
disjointed (Figure 1).
Keen to draw value from the
organisation’s extensive HR data
estate, which was of good quality
but siloed, HR
Business Partner Maja Luckos saw
the potential for an alternative
approach at the CIPD HR
Analytics Conference in 2014:
34
‘We have always done the same
thing, as have most organisations,
which is to report on the past by
producing static reports, using
multiple data systems which are
not integrated. As the systems
are separate, we naturally report
in silos; so L&D is reported
separately, as is recruitment etc.
Everything is collated monthly to
review progress against our KPIs.
Everyone produces their own slide
which tells a different story on
headcount etc. So I saw the need
to change this because at the
end of the day we’re working as
one organisation with one set of
KPIs and one HR agenda. I really
started thinking, “How can we
pull it all together into one version
of the truth?”.’ Maja Luckos, HR
Business Partner
Appendix 1
Figure 7: Management of data before the change
Maja’s vision was to enable better
informed decisions by the business
at the point of action, through a
completely new approach to HR
analytics; to find an alternative
to spreadsheets that would
use engaging and meaningful
visualisations, facilitating dynamic
and real-time data discovery driven
by the user (Figure 2).
Getting started: finding
expertise and experience
and building buy-in
The first step on the journey
was to generate an appetite for
this new approach from the HR
Directors and convince them of
its achievability.
‘I started by approaching the
Insights and Data team who work
with our clients to build analytics
products and solutions. They
were very supportive of the idea
and instantly connected me with
Qlik, one of our partners. After
discussing our requirements,
Qlik saw the potential and gave
me access to a consultant for a
couple of days, free of charge, to
build a proof of concept.’
Maja Luckos, HR Business Partner
Building a proof of concept
for the tool was the first major
step in moving from ideas to
implementation. Three simple
applications were built over the
course of the two days with the
Qlik consultant, focusing on
Attrition, Talent and L&D. All were
underpinned by the same data
feed from Oracle HR, providing
a consistent picture throughout.
It was important to prepare
thoroughly before meeting with
the consultant, organising the
data and making decisions on
the key areas that would instantly
grab attention, in addition to the
most critical KPIs.
‘Talent was definitely key. We’re
quite good at identifying our
talent, using a nine box grid that
is well established. We designed
one example for talent that was
dynamic so you could pick and
choose different dimensions,
e.g. grade, and the application
would tell you how many of
the population were in each
position on the grid (Figure 3).
This immediately highlighted
some inconsistencies in the data,
which helped to show how useful
the tool could be. You could
35
also understand the succession
pipeline; which is something that
the HR Leadership team liked.’
Maja Luckos, HR Business Partner
The applications were presented
to the HR Leadership team and
they were instantly sold on the
approach. Seeing their own data
presented in this new way really
captured their imagination and
they agreed to invest in further
development of the tool. The
aim was defined; to build one
application covering all key
HR areas; Headcount, Talent
Management, Attrition, Career
& Employability, Recruitment,
Sickness & Absence and L&D.
Defining the audience and
the users for the tool was also
critical during this scoping
phase. Whilst the HR team knew
that they needed to gain better
insights from their people data,
there was little understanding
of how the tool could be used
by other functions. A process
of consultation was undertaken
to ascertain exactly how the
business may use the data, and
what format the final tool should
take to deliver the best insights.
Appendix 1
Figure 8: Management of data through QlikView
‘There were two intended types
of primary user for the tool so
we initially rolled it out to the HR
teams that would benefit most as
they work closely with decision
makers in the business, but also
eventually wanted to share it with
the line managers, team leaders
and capability leads, who manage
large teams of 50 plus people,
so they could use the insights to
better inform decisions.’
Maja Luckos, HR Business Partner
Setting up definitions
The model had to be able to
compute data from various
established systems and data
sets which were already well
used across HR and other
business functions. Integrating
these established systems
was a significant undertaking
which took considerable time:
‘We had to include a few different
data sets – the biggest one came
from our Oracle HR system,
which is very comprehensive
and holds good-quality data.
This accounts for around 70%
of the data requirement in the
application. The rest came from
different data owners across other
functions – which took a little
longer as we needed to get their
buy-in to feed into the process.
For example, you have to get
your respective heads of talent,
recruitment, L&D, etc, involved
and excited about this as well.’
Maja Luckos, HR Business Partner
36
Then the process of setting
up definitions began. Maja and
her colleagues had to define
the measures that were to
be computed in the system,
according to those who were
running the analytics, and those
who would be using the outputs.
Deciding which elements needed
to be measured was also an
important consideration, as there
are various measures that can
be applied, often for the same
concept. Maja recommends
focusing on the priority measures,
which can be understood more
by considering:
Appendix 1
Figure 9: HR dashboard, Talent 9 box grid
Figures provided for illustrative purposes only
‘Once we had requirements we
had to go through the process of
defining what each measure was,
so what recruitment cost equals,
and the formula you would use
to calculate it. You end up with a
long list which must be prioritised.
I think you have to constantly
challenge yourself; what is the
value in looking at those KPIs?
Why should we be measuring
this process?’ Maja Luckos, HR
‘We found that in some parts
of the business the definition for
‘Top Talent’ differed to ours. So
although we have a similar 9 box
grid, we define two of our boxes
as ‘Top Talent’ while they just
include the top right-hand one.
So we had to factor these
differences in so that anybody
could use the tool.’
Michelle Steele, HR Business Partner
Business Partner
Through exploring how the
business understands specific HR
terms, the team soon realised that
there were few set definitions that
ran across all functions and HR
teams. This meant there was no
common language when talking
about people measures, either
within HR or with colleagues from
other functions including finance:
37
Building the tool
Once the scope, definitions and
data feeds were agreed, the
structure of the tool could be put
in place. The design of the tool
was incredibly important as it had
to be easy to use and understand,
whilst illustrating data in a clear
and coherent way. The application
was built section by section by a
QlikView Developer, keeping in
touch with the main stakeholders
throughout. The main focus was
on the data model as it was the
quality of this that would give
users the freedom to draw real
insights from the data. Maja
and other team members also
attended the QlikView Designer
training course so they could
adapt the tool themselves.
Appendix 1
Figure 10: HR dashboard: Top measures
Figures provided for illustrative purposes only
The application consists of one
dashboard which illustrates
key performance indicators,
and seven areas of interest
which Maja defined through a
consultation exercise across the
business (Figure 4). She looked
to the different functions that
were already using the data in
spreadsheet format to appreciate
which particular areas
should be considered as key
themes in the data model.
‘The main area of the tool holds
the key performance indicators,
and then linked to this are seven
analysis areas; Headcount, Talent
Management, Leavers, Joiners,
Recruitment, Sickness & Absence,
and Learning & Development.’
Maja Luckos, HR Business Partner
38
Appendix 1
Table 9: Seven analysis areas in the analytics tool
Analysis Area
Examples of Indicative Metrics
Headcount
• Number of FTEs, flexible and part time labour
• Cost of employment: Average Remuneration Cost by grade
• Gender split (M/F)
Talent
• Population by talent grades (performance and potential)
• % talent against total headcount
Leavers
• Regretted and non-regretted leavers
• Managed leavers – cost and saving
• Top Talent leavers
• Reasons for leaving – using survey data
• Leavers by length of service
Recruitment
• Cost of recruitment
• Average cost of hire
• Source of hire
• Quality – performance and potential of hires after one and two years
Sickness & absence
• % days lost to sickness
• Cost of short to medium-term and long-term sickness
• Average days’ sickness per employee
Learning & Development
• Completion rates
• Global hours of training / month & YTD
• Classroom and virtual hours
• Compliance on mandatory training
The tool was given to users
to test as soon as it provided
enough information for them to
draw insights from. The decision
to go live partway through
development was taken to
explore real feedback from users
and potential users whilst changes
could still be implemented. This
allowed the tool to become fit
for purpose through real testing,
and to highlight any conflicts
for different user groups:
‘We spent a long time considering
how we should build different
requirements into the tool, for
example, whether we should have
different apps for the various
user groups or personalise the
talent matrix to user needs. In
the end we felt that because we
could pull all the UK data from
most of the feeds, it made sense
to have one single application so
everyone is looking at the same
thing. But it can get complicated
when parts of the business have
different definitions. In the case of
talent management, the long term
goal would be that everybody is
using the same matrix - I think
the application itself might help
us get there at some point… by
encouraging everybody to work in
the same way.’ Michelle Steele,
HR Business Partner
39
Introducing the HR
business to data: using the
tool to build capability
The tool was initially launched in
one part of the business (covering
the data of approximately 4,500
employees). It was then rolled out
country-wide and is today active
across HR teams responsible for
around 8,000 employees in the UK.
There are over eighty users in the
HR Community, including HRDs,
HR Business Partners, operational
HR Managers, recruitment partners,
and specific L&D functions. To
embed the tool and ensure that it
is used appropriately across the
business, a programme of training
and development was rolled out
to users as they explored and used
the new system:
Appendix 1
Figure 11: QlikView Data view: sickness and absence
‘We created some material to
help users understand how to use
the tool and what the outputs
show. It is quite intuitive but you
have to understand the data
inputs and definitions in detail
before discussing it with the
business leads. They know their
areas best and will therefore
always have questions about
the data. The future aspiration
is to give direct access to the
managers themselves.' Maja
Luckos, HR Business Partner
Driving value: connecting
people analytics to real
business issues
Through using the tool, the team
has started to explore specific
aspects of their workforce which
they believe will help the business
to perform. One particular
aspect is how attrition differs
across business functions. The
application enables teams to
cut attrition data according to
function and role, and compare
across the business. An objective
for the year is to ensure that nonregretted attrition is managed and
regretted attrition remains low.
The impact on the business?
The HR team is noticeably more
curious about the data that they
collect and the performance of
some of the core processes of
HR. There is now a much greater
appetite for the organisation
to question the efficacy and
impact of certain HR projects
and to share the insights with
the business, to inform and
drive people performance:
‘It’s revolutionary for us as
an organisation… users kept
telling me that what they now
get in terms of data analysis is
amazing. We had a meeting with
someone who’s worked with our
organisation in HR for a long time,
and different regions across the
globe, and she was stunned by
the amount of detail in the tool. I
think the HR teams now use their
curiosity to investigate, analyse,
and get to the bottom of the
problem. They use the skills they
already have as HR professionals
but aided by the application.’
Maja Luckos, HR Business Partner
40
Sickness and absence are also
areas of real interest to the
business. A lot of time was spent
considering definitions and
understanding how the business
would view and use the analytics
being provided – particularly
because trends are displayed for
both short-term and long-term
sickness, and the associated
costs. The tool is opening up
new conversations around
sickness which are based more
firmly on evidence. The real-time
application of data is helping to
assess and alter business activities,
such as campaigns to reduce
sickness- absence (Figure 5):
‘‘Sickness has been a much
bigger subject than I ever thought
it would be. Many users are
interested in sickness trends and
analysis. It is probably the area
that I spent most of my time on
because everybody had a different
view of what the definitions should
be. Once we got it working, the
HR teams really valued being able
to see at a glance whether their
activities to tackle sickness were
making a difference. Before we
had the application, it wasn’t as
easy to compare month on month
Appendix 1
Figure 12: Diversity and inclusion (D&I): QlikView dashboard
Figures provided for illustrative purposes only
via the spreadsheet reports.’
Michelle Steele, HR Business Partner
When it comes to saving
costs in the organisation, a
knowledge-based company
such as Capgemini relies on
the significant, and expensive,
expertise that its consultant,
development and research teams
have. For the HR team, few
measures have been as useful
and fascinating for the business
to consider in real-time than
the measures of recruitment,
such as cost and rate.
‘The highest impact measure is
cost of recruitment because once
is visible and you can cut it in
many ways you can relate it to so
many other things.
I think it is interesting that
in my interactions with the
business recruitment always
attracts a lot of attention. It is
easy to compare the measure
in many different ways to our
profitability and performance as a
business. Anything you spend on
recruitment fees hits your bottom
line, and that’s the message that
everybody gets in the business
and that is a start of many
interesting and more focused
conversations for example around
retention.’ Maja Luckos,
HR Business Partner
Turning the HR tool into a
commercial product
The aspiration is to take the
framework of measures and
the indicative definitions and
develop a commercial product
that customer facing teams at
Capgemini can begin to share
with clients. The dashboard
in particular is something the
business is keen to introduce its
clients to. Building commercial
viability from the beginning
has been important for the HR
team, who knew that for the
business to commit resource to
the HR product, there was some
requirement to understand its
business value. The business
believes that the direct value
that the tool could generate as a
commercial product is high, and
also suggests that the business
can start to build and learn from
sharing the tool externally:
‘We’ve taken the application back
to the part of the business that
supported it initially and they
41
want to start using it as one of
their credentials when developing
proposals. So now, when we bid
for HR analytics work, we can say
that we have intellectual property
and expertise that we can share
and use with the client.
Obviously every business will
be different, so some people
will have a slightly different
view on how they measure and
identify their talent, and what
KPIs they want to look at, but as
a framework it could potentially
work for any company once you
understand their specifics.’
Maja Luckos,
HR Business Partner
Appendix 1
Within a year, the HR team have
moved from ad-hoc, disjointed
operational reporting - where
56% of companies are according
to the Bersin by Deloitte
maturity model - to proactive
advanced reporting which
makes Capgemini one of 30% of
organisations. The next step isto
join the exclusive 10% through
strategic analytics in 2016.1
Now that the tool has gained
strong reputational impact
across the organisation, there is
real appetite to explore how it
can be applied to other areas,
with an application focused on
Diversity & Inclusion already
in production (Figure 6). This
incorporates a predictive analysis
slant which is a very exciting
development for the HR team
and demonstrates the next step
in the HR analytics journey that
Capgemini wants to take.
1 Bersin, J. (2012) Big Data in HR: Building a
competitive talent analytics function – the
four stages of maturity.
Bersin by Deloitte. April.
42
Appendix 1
Coca-Cola Enterprises:
The thirst for HR analytics grows
‘It’s a great opportunity for HR, and we should not pass up on it, because, if executed
well, HR analytics combined with business data allows us to highlight the impact of people
on business outcomes.
‘It’s about small steps, pilots, where you start to demonstrate the power of combining
HR and business data. If you understand the business problems and can come to the
table with insights that had previously not been seen, you enhance HR’s credibility and
demonstrate the value we can add as a function.
‘What amazes me as an HR professional, with a lean six sigma background, is that
companies are often great at measuring and controlling business processes but very
rarely consider the importance of people in that process. People are without doubt
one of the most important variables in the equation.’
Data analytics journey
The HR analytics journey within
Coca-Cola Enterprises (CCE)
really began in 2010. Given the
complexity of the CCE operation,
its global footprint and various
business units, a team was
needed which was able to provide
a centralised HR reporting and
analytics service to the business.
This led to the formation of an
HR analytics team serving eight
countries. As a new team they
had the opportunity to work
closely with the HR function
to understand their needs and
build a team not only capable of
delivering those requirements but
also challenge the status quo.
‘When I first joined CocaCola Enterprises in 2010, it
was very early on in their
transformation programme and
reporting was transitioned from
North America to Europe.
descriptive reports as possible.
The sheer number of requests
the team received was preventing
them from adding value and
providing more-sophisticated
reports and scorecards.
‘At that point we did not have
a huge suite of reports and
there was limited structure
in place. We had a number
of scheduled reports to run
each month, but not really
an offering of scorecards or
anything more advanced.’
CCE initiated a project to reduce
the volume of scheduled reports
sent to customers, which enabled
them to decrease the hours
per month taken to run the
reports by 70%. This was a game
changer in CCE’s journey. Many
of the remaining, basic, low-value
reports were then automated,
which allowed the team to move
onwards in their journey and look
more at the effectiveness of the
HR function by developing key
measures. The analytics team
was soon able to focus on more
The first step was to establish
strong foundations for the new
data analytics programme. It
was imperative to get the basics
right, enhance credibility and
automate as many of the basic
43
Appendix 1
‘value-adding’ analytics, instead
of being overwhelmed with
numerous transactional requests
which consumed resources.
‘In the early stages requests were
very basic. For example, how
many people am I supporting?
How many people have started
or left? How many promotions
have there been in my part of
the organisation? The majority
of requests were therefore
very descriptive in their nature.
There was an obvious need
to automate as much as we
could, because if we could not
free ourselves of that kind of
transactional reporting, there
was no way we were going to
add any value with analytics.’
Standardising and
reporting: towards a
basic scorecard
The team soon found that the
more they provided reports, the
more internal recognition they
received. This ultimately created
a thirst within HR for more data
and metrics for measuring the
performance of the organisation
from an HR perspective. The
HR analytics function knew this
was an important next step but
it wasn’t where they wanted the
journey to end. They looked for
technology that would allow them
to automate as many of these
metrics as possible while having
the capability to combine multiple
HR systems and data sources.
A breakthrough, and the next key
milestone in the journey for CCE,
was when they invested in an ‘out
of the box’ system which provided
them with standard metrics and
measures, and enabled quick and
simple descriptive analytics.
Instead of building a new set
of standards from scratch, CCE
piloted pre-existing measures
within the application and applied
these to their data. The result
was that the capability to deliver
more sophisticated descriptive
analytics was realised more
quickly and began delivering
results sooner than CCE business
customers had expected.
‘We were able to segment tasks
based on the skill-set of the team.
This created a natural talent
development pipeline and ensured
the right skill-set was dedicated
to the appropriate task. This freed
up time for some of the team to
focus on workforce analytics.
‘We implemented a solution
that combines data from various
sources, whether it is our HR
system, the case management
system for the service
centre, or our on-boarding/
recruitment tools. We brought
all that data into one central
area and developed a lot of
ratios and measures. That really
took it to the next level.’
As with any major transformation,
the evolution from transactional
to more advanced reporting
took time, resource and
commitment from the business,
and there were many challenges
for the team to overcome.
‘There were a lot of lessons.
With the workforce analytics
implementation we probably
underestimated the resource
and the time needed. Sometimes
less is more and we provided too
many metrics at first. The key
was to really collaborate with
our HR leaders and understand
what the key metrics were.’
With the standards in place,
CCE then turned to establishing
a basic scorecard approach to
illustrate the data. Scorecards are
a common instrument used by
many organisations to provide
an overview of the performance
of a function. Typically they
consist of clear targets illustrated
in a dashboard fashion and are
utilised by senior management
to guide their leadership of the
organisation. The leadership
team’s familiarity with the
scorecard methodology meant
that the analytics team could
simply fit into a standard reporting
process. But for CCE to create its
HR dashboard, it was apparent
that a clear purpose and objective
for the analytics was needed,
and that the development of
future scorecards should be as
automated as possible.
Consulting to the business:
HR as a centre of ‘people
expertise’
At CCE it’s clear that HR analytics,
insights, and combining HR and
business data is an illustration
of the value that HR can add to
the business. CCE has developed
a partnership approach which
demonstrates the power that
44
high-quality analytics can deliver,
and its value as a springboard
to more-effective HR practices
in the organisation. By acting
in a consultative capacity, HR is
able to better understand what
makes CCE effective at delivering
against its objectives, HR
ensures both parties within the
partnership use the data which is
extracted, and find value in the
insights which HR are developing.
‘To be a consultant in this area,
you have to understand the
business you’re working in. If
you understand the business
problem, you can help with your
understanding of HR, together
with your understanding of all the
data sets you have available.
‘You can really help by extracting
the right questions. If you have
the right question, the analysis
you are going to complete will be
meaningful and insightful.’
Moving from descriptive
reporting towards
correlation analysis
There are numerous examples
where the HR reporting and
analytics team have partnered
with the HR function and
provided insights that have
helped to develop more impactful
HR processes and deliver greater
outcomes for the business.
As with many organisations, it
is the engagement data with
which the majority of HR insight
is created. Developing further
insight beyond standard survey
outputs has meant that CCE
has begun to increase the level
of insights developed through
the method, and by using
longitudinal data they have
started to track sentiment in the
organisation. Tracking sentiment
alongside other measures
provides leaders with a good
indicator for sense-checking
the power of HR initiatives and
general business processes.
The question is whether the
relationship between engagement
and business results is causal or
correlative. For CCE this point is
important when explaining the
implications of HR data insights
to the rest of the business.
‘There have definitely been a
number of examples where we are
starting to share insights that are
being acted upon. One example is
Appendix 1
our engagement survey that is run
every couple of years. Within the
survey there are three questions
related to communication.
‘The business was keen to
understand if there was a
correlation between how an
employee scores a manager,
in terms of communication,
and key performance indicators
across our sites.
‘We demonstrated that across all
of our sites there was a positive
correlation between how leaders
communicate and business
outcomes. That is great but it
is not implying causation. There
is something there to explore
further, but we cannot go and
say, good communication causes
better business performance.’
Building analytics
capability within HR at CCE
For CCE’s analytics team one
of the most important next
steps is to share the experience
and knowledge gained from
developing the analytics function
with their colleagues, and build
capability across HR.
‘We are also reviewing the learning
and development curriculum
for HR to see what skills and
competencies we need to
build. One of the competencies
that we have introduced is HR
professionals being data analysers.
‘For me, it is not only
understanding a spreadsheet
or how to do a pivot table, it is
more understanding what a ratio
is, or understanding what their
business problems are, or how
data can really help them in their
quest to find an intervention
that is going to add value and
shape business outcomes.’
Barriers
As with any long journey, the
analytics team at CCE have faced
numerous barriers. The challenges
they list are common to most
HR professionals attempting
to establish a significant new
process, but it is the challenge
of establishing new capability
and embedding fit-for-purpose
technologies which has created
the greatest challenge at CCE.
‘In terms of barriers, technology
is one. For example, having the
right data warehouse in place
that allows you to extract the
data very quickly. From an HR
perspective we are well placed;
however, extracting data from the
rest of the business is a challenge.
At CCE HR is trying to branch out
and get the data from other parts
of the business, which is probably
quite unusual. People probably do
not expect HR to be that kind of
driving force.’
CCE recognises a recruitment
challenge centred on sourcing
the capabilities to develop highimpact HR analytics, which
includes hiring individuals
with the ability to analyse
data, develop insights and the
communication know-how
to share across the business.
One challenge for HR is to sell
the profession as suitable for
analytical high-potentials to build
their broader business acumen:
to move away from the traditional
view of transactional HR with
little or no analytical capability,
to a function based around
high-quality data and business
insights. For CCE this represents
a significant opportunity – highcalibre analysts must see HR as a
profession in which they’re able to
build a lasting career.
‘At conferences I have listened to
major firms who have PhD students
in their business intelligence teams,
who appear to be very good at not
only analytics but also presenting
information. They are few and far
between, and I believe that people
who have that skill-set would not
naturally go into HR. If I reference
the recent big data conference
I went to, and the projects that
some of these companies were
doing outside of HR with customer
data, Twitter data, really what
I would call “big data”, it may
seem a lot more appetising and
appealing than HR analytics. If I
was a PhD student, I am not sure
I would consider HR as a place to
go to develop my career and also,
whether I would see any longevity
in it. As a function we need to
change that.’
Utilising predictive
analytics: CCE’s approach
For organisations such as CCE,
natural progression in analytics is
towards mature data processes
that utilise the predictive value
of HR and business data. For
most organisations this can
45
too often remain an objective
that exists in the far future, and
one which, without significant
investment, may never be
realised. Alongside the resource
challenges in building capability
there also exists the need to
understand exactly how data
may provide value, and the
importance of objective and
critical assessment as to how
data can be exploited. Without
appreciation for methodological
challenges, data complexity and
nuances in analysis, it may be that
organisations use data without
fully understanding the exact
story the data is telling.
‘Predictive analytics is difficult.
We are very much in the early
stages as we are only starting to
explore what predictive analytics
might enable us to do, and what
insights it could enable us to have.
If we can develop some success
stories, it will grow. If we go down
this route and start to look at
some predictive analytics and,
actually, there is not the appetite
in the business, or they do not
believe it is the right thing to do, it
might not take off.
‘If you think about the 2020
workplace, the issues that we have
around leadership development,
multi-generational workforces,
people not staying with
companies for as long as they
have done in the past, there are a
lot of challenges out there for HR.
These are all areas where the use
of HR analytics can provide the
business with valuable insights.’
For CCE it appears that analytics
and HR insight are gaining
significant traction within
the organisation. Leaders are
engaging at all levels and the
HR function is increasingly
sharing insights across business
boundaries. This hasn’t been
without its challenges: CCE
faces HR’s perennial issues of
technology and the perceived lack
of analytics capability. However,
their approach of creating
quality data sets and automated
reporting processes has provided
them with the foundations and
opportunity to begin to develop
real centres of expertise capable
of providing high-quality insight
to the organisation. It is clear CCE
remains focused on continuing its
HR analytical journey.
Appendix 1
London Councils:
The power of expert networks
London Councils is a lobbying organisation that promotes the interests of London’s
32 borough councils and the City of London. A public organisation, London Councils
operates across political parties to deliver services on behalf of the public, by ensuring
that its member authorities have the correct resources, freedoms and powers to deliver
their services for residents and local businesses.
London borough councils have
faced the biggest financial
challenge of any part of the
public sector since 2010. The
Spending Review 2015 confirmed
further funding reductions of
around 30% in real terms over the
next four years, on top of cuts to
core funding of over 40% since
2010. Fundamental changes to
the way services are delivered
will be necessary to deliver the
savings required.
London Councils offers a number
of services to support London
boroughs to meet the challenges
they face during this period of
change. This includes supporting
professional networks, one of
which is the Workforce Planning
and HR Metrics group that
enables HR professionals working
at London boroughs to explore
people data and share ways of
using it to improve performance.
‘The London Directors of HR
sponsor a number of council
network groups. We have
recruitment, pay and employee
relations and OD networks and
we wanted to develop a network
to work together on workforce
planning and in particular the
benchmarking of HR data, and
that’s why the group came
together.’ Mark Porter, Operational
HR Manager, OneSource and chair
of the London Councils Workforce
Planning Group
The group consists of the HR
professionals in each council
who are responsible for or use
HR data most frequently. They
are often technical experts with
an understanding of the specific
measures and technology their
council has access to which can
provide them with people data.
The group meets quarterly at
London Councils.
‘Most group members are the
HR metrics expert or lead within
the councils: either performance
people, on the HR side; or
sometimes people who are
involved with the payroll system.
Meetings usually start with a
presentation, often from one
of the group’s members on a
new system or application and
move on to discussing upcoming
issues on data collection and
46
presentation. At our most recent
meeting the Department for
Education attended to receive
feedback on changes they
are proposing to one of their
statutory surveys. The meetings
are lively and a good place to
share ideas.’ Tessa Mapley,
HR Metrics Service Lead,
London Councils
For many HR managers, one of
the biggest challenges can be
developing business confidence
and buy-in. By encouraging
the use and benchmarking of
HR data, the network enables
HR professionals to facilitate
evidence-based decision-making
and helps them to make their
organisations more effective.
Appendix 1
Benchmarking: developing
standards and improving
practice across London
boroughs
London Councils conducts a
range of benchmarking surveys
which have been developed
using the shared expertise
of the Workforce Planning
network. In addition to enabling
benchmarking and analysis at
a regional level, the surveys
promote the local collection and
use of best practice HR metrics.
‘Working with London Directors
of HR, London Councils had
already developed an HR metrics
survey and there was interest in
expanding this. With the support
of the Directors of HR network,
we compiled a list of all the HR
metrics in use locally. A subgroup
of the Workforce Planning
network met and, using the list as
a basis, produced draft sets of HR
metrics for benchmarking. These
included many of the metrics from
the original survey with others
added to give greater insight.
The subgroup also produced
draft definitions and guidance for
the surveys. The group’s drafts
were shared with the Workforce
Planning network to produce the
sets of HR metrics questions now
in use.’ Tessa Mapley, HR Metrics
Service Lead, London Councils
Regular review and monitoring by
the Workforce Planning network
ensures the definitions are kept
relevant and up to date. This also
led to the development of an
appendix included with survey
results providing comments
from survey contributors adding
context if required, and letting
other users know if they have
been unable to follow guidance
in the calculation of any of their
metrics.
‘We are lucky because the
members of the Workforce
Planning network have in-depth
expertise in HR metrics, years
of experience and practical
know-how and are generous in
sharing this with the network
and the survey service. We are
also supported by the Directors
of HR network and we have a
designated director lead for
HR metrics who champions our
survey and benchmarking work
and gives us invaluable feedback
and advice.’ Tessa Mapley,
HR Metrics Service Lead,
London Councils
Focusing on performance
The benchmarking of HR data
from the London region enables
evidence-based decision-making
on key issues. It empowers
individual councils, groups of
councils and the region as a
whole to assess performance and
drive improvement.
Councils can compare their
performance on HR indicators
ranging from the reasons why
staff leave to diversity in the
workforce, HR casework and
sickness absence. Each council
can see where its performance
sits in relation to the others
and they can share policy/
procedure development and
innovations that work.
Online tools provide systematic
analysis of data and offer
instant, up-to-date outputs that
would take weeks to produce
manually. They offer a costeffective solution to collecting
and processing large quantities of
benchmarking data.
‘We use an online tool which
has been set up to conduct our
HR metrics surveys. Boroughs
input their own data locally
and can generate sophisticated
results, reports and scorecards
each with their own council’s
branding. This has reduced the
manual processing of the data
and enabled instant reporting and
updating of results outputs.’ Tessa
Mapley, HR Metrics Service Lead,
London Councils
When resources are limited and
reducing, sharing best practice
and ideas is an important way
that councils can be more
cost-effective and improve
performance – learning from the
best performers among their
comparators and not having to
come up with their own solutions
in isolation.
‘We use the benchmarks at a local
level at Havering and at Newham
not only to continually assess and
improve performance in day-today HR activities but also to focus
on emerging priorities.’
Mark Porter, Operational HR
Manager, OneSource
47
‘The fact that all London
boroughs subscribe to the HR
Metrics Service and participate
in providing data is testament
to its value and success. Sharing
and benchmarking HR metrics
supports our continuous
improvement, both as individual
councils and as a region. Having
the service and the network in
place also enables us to quickly
access London-wide data to
provide insight and evidence to
support the development of new
strategies.’ Jon Turner, Divisional
Director of Human Resources at
Harrow Council – Lead Director of
HR for the HR Metrics Service
‘The London HR Metrics Service
is recognised across the regions
for producing some of the most
highly reliable and relevant data
and analysis. Key London-wide
facts and figures are available and
can be used to support London’s
case on the wider national
stage that includes government
departments, parliamentary select
committees and other decisionmaking bodies. It has been utilised
by the national employers to
maintain and build the reputation
of the sector.’ Selena Lansley –
London Councils, Head of London
Regional Employers’ Organisation
Tackling real business
issues
The network also works
collectively to explore issues that
they all face – for example, the
recruitment and retention of staff
in specialised roles that are often
in high demand and low supply.
‘I am in regular contact with the
director lead for HR metrics and
once a year I attend a Directors of
HR network meeting to talk about
the work of the group, the things
that we’ve delivered, and find out
from them what they want the
group to deliver next year. One
of the key issues this year was
difficulty in recruiting children’s
social workers that had led to an
over-reliance on agency workers.
There is high demand for these
roles and agency worker rates had
become inflated, adding to costs
for councils.
Appendix 1
‘At the request of the network
the HR Metrics Service surveyed
councils on agency pay rates
for children’s social workers
and produced an analysis of
the rates across London. The
London Directors of HR used
this information as part of a
project to broker a memorandum
of understanding (MOU) to be
signed off by chief executives,
directors of children’s services and
directors of HR across London.
The MOU sets standardised pay
rates across London for agency
workers and an agreement not to
go above those rates. At present
there are 27 councils of 33 that
have signed the MOU. Councils
are now working collaboratively
to manage the market and not
compete with one another.’
Mark Porter, Operational HR
Manager, OneSource
This demonstrates the clear
financial benefit in using HR
data to inform and enable
collaboration across stakeholders,
particularly within public services
– further cost-saving measures
are also being developed
across London, particularly
with regards to managing
workforce reductions to retain
talent and avoid the potentially
significant cost of redundancies.
Skills to be an HR analyst
‘An HR analyst needs a
combination of skills. It’s good
if they have some background
knowledge or understanding
of the organisation but it’s also
important that they have good
knowledge of the systems they
will be using to collect and
analyse data. They will also need
expertise in data analysis and
in presenting data to different
audiences so it can be understood
and used effectively. There is
also an important role for HR
analysts in working with other
HR professionals to identify and
define HR metrics for which good,
collectable data is available and
which provide useful insight.’
Tessa Mapley, HR Metrics Service
Lead, London Councils
HR analysts who develop a sense
of curiosity about the workforce,
and want to ask questions of
data and explore its relationships,
correlations, and so on, can
discover new things about their
workforce and potentially find
ways of increasing performance.
‘HR metrics people should be
playful. If you get a bit of spare
time, run some reports and
compare things, see if you get
a correlation. Sometimes you
come up with a new insight.’ Tessa
Mapley, HR Metrics Service Lead,
London Councils
48
HR analysts need to be able to
communicate and present data in
a way which is clear and usable
by functional leads within the
business.
‘I think another important role of
the Workforce Planning group is
sharing ways of presenting data,
communicating what your data is
telling you and understanding the
context, or the reasoning behind
it. If you get the story right, and
you understand it, people take
your data more seriously as well.’
Mark Porter, Operational HR
Manager, OneSource
Sharing ideas with other
public service providers
Having solved some of the
practical challenges, London
Councils is in a good position to
share ideas and demonstrate the
benchmarking processes and
systems it uses to other public
service organisations, including
a recent presentation to the Civil
Service.
‘Benchmarking is something we
can all benefit from. There is
potential to reduce costs in the
public sector if we are able to
look at our data more closely and
make good use of it.’ Tessa Mapley,
HR Metrics Service Lead, London
Councils
Appendix 1
Network Rail: Building the workforce
of the future through talent analytics
Network Rail is a public sector body for the maintenance and infrastructure
management of the rail network in England, Scotland and Wales which employs
over 34,000 people across the three nations. Nearly 1.7 billion passenger journeys
are made each year on railways managed by Network Rail, which in 2015 reported
revenues of £6 billion. With a diverse workforce of highly skilled, technical engineering
and planning experts based across a broad geography, Network Rail relies fully on
the expertise of its workforce to deliver high-quality performance for its public rail
customers and the franchised railway services which operate on its network.
Delivering a public service
365 days of the year
Railways in England, Scotland and
Wales continue to be some of
the busiest in the world, and are
often operating on some of the
oldest infrastructure. For decades
Network Rail has been investing
in improving infrastructure across
the three nations, while the level
of usage has continued to rise
year on year. At no time since
the 1920s, when the rail network
was almost twice in size, has the
railway been as busy. This has
raised significant infrastructure,
design and maintenance
challenges for the business, if it
is to operate and perform in a
sustainable way.
‘The demand for the use of the
railway has grown significantly. In
the last 20 years we have seen a
100% increase in customer traffic.
It is predicted that in the next 20
years it will double again. There
aren’t many businesses that are
seeing that amount of growth.
‘At the same time we must
improve the technology in our
business to deliver high levels of
safety while using what is basically
a Victorian railway which is over
150 years old. The challenges are
phenomenal.
‘There is also a great deal of
media and government scrutiny.
In September 2014 our balance
sheet was reclassified, an EU
regulation stated that we are to
be treated as part of the public
sector. This brought challenges
around disclosure, accountability
and restrictions on our funding,
which are new and complex for
the business to have.’ Ian Iceton,
Group HR Director
The size and scope of Network
Rail means that the organisation
operates with a long-term vision
in mind, and utilises the high
level of human and knowledge
capital available to it through
its people. The breadth of
skills and knowledge covers
many areas, including safety,
49
operations, engineering, digital,
information management, project
and programme management,
strategy, planning, research
and development, finance,
procurement, property, legal,
audit, tax, communications and
human resources. As a result of
this diverse workforce skills base,
the organisation has implemented
an HR model which allows
flexibility and accessibility for
the line management community
to enable them to manage and
tackle their own issues. The
focus on business-relevant HR
processes has meant that the
HR operating model has been
designed around the needs of
the functions in the business.
HR within the organisation is
structured in an Ulrich model,
that is, shared services and
centres of expertise, using
established business partners
to work across the organisation
to drive performance, through
focused work on business issues
Appendix 1
and delivering expertise directly
to the business function.
‘We have devolved business
partners throughout the business
based across the country. Our
centres of expertise include
resourcing, reward and benefits,
employee engagement, pensions,
diversity and inclusion, industrial
relations, employee relations,
organisational design and talent,
and training delivery. Our shared
service also exists to carry out
transactional activity. The model
helps us to deliver a consistent
service across the business, but
is something we need to adapt
for the future as the business
evolves.’ Ian Iceton, Group HR
Director
The workforce itself can be split
into four groupings: day-to-day
operations management, project
management, technical expertise
and engineering, and corporate
business functions. To deliver
railway services for customers
and organisations operating in
partnership with Network Rail,
the business operates 365 days
a year to maintain and develop
the nation’s railways. Because
of the high levels of usage there
are significant challenges with
regards to access and availability,
which mean that employees
are required to work outside
of regular working hours, often
overnight, on weekends, and
on bank and public holidays.
As a result engagement is a
key measure for the business
to keep track of workforce
health and well-being.
‘We have a lot of people that
work evenings, weekends and
particularly on bank holidays.
With both our own employees and
workforce from our supply chain,
we had more than 20,000 people
working over the Christmas and
New Year period on more than
500 projects.
‘Bank holidays are one of the
times when we can get access
to the railway for a long enough
period to do some of the much
needed major upgrades to the
network that is being demanded
because of the growth in traffic.
This impacts a lot of the travelling
public and line-side neighbours,
which is sometimes portrayed
negatively in the media for
infrequent disruptions to service.
Engagement is so important for
us.’ Ian Iceton, Group HR Director
Using people data to evolve
Network Rail
As an engineering and
infrastructure management
organisation, Network Rail relies
heavily on the use of data, from
the early days of ordnance
survey and geotechnical survey
data to modern and complex
modelling of how passengers use
the network. The organisation is
inherently a data-driven business,
but given its long history, various
legacy processes and data
management activities remain
unchanged.
‘We have inherited a legacy of
a lot of data that wasn’t always
recorded properly or accurately,
which we are moving to modern
technology. We have invested
significantly in the last couple of
years in terms of trying to be able
to use data and information in a
more intelligent way than ever
before.’
Ian Iceton, Group HR Director
Moving from legacy systems to
updated HR and IT systems is a
big challenge for an organisation
that is spread geographically
across the breadth of England,
Scotland and Wales, and
has TUPE’d in a number of
maintenance contractors. Legacy
systems such as payroll, and HR
processes such as employment
contracting, mean that there
are many processes or policies
that are not uniform across the
business. The transition to a more
integrated and strategic approach
is one which the organisation
knows will take some time given
the complexity of the external
environment and the relationship
with stakeholders, particularly the
trade union community.
‘We operate a number of
payrolls on different systems.
We also have a variety of terms
and conditions for people, and
different working patterns and
arrangements for individuals
sometimes in the same role. Some
of that is tied up in quite emotive
industrial relations agreements,
which we work hard in partnership
with trade unions to maintain. We
would love to simplify it all but it
is not that straightforward. We
would like to do it in a way that is
50
very consultative and that does
not happen overnight – it won’t be
something we can do in one step.’
Ian Iceton, Group HR Director
Accelerated Leaders
Programme: developing
future Network Rail leaders
A core strategy of HR is to invest
in and develop the leadership
capability of those with potential
in the business. The business
created the Accelerated Leaders
Programme (ALP) to develop
future leaders and in year 3
(2016 intake) of the programme,
creating focus on building
succession pipelines for key
risk roles at a very senior level.
The organisation identified a
need for a formal high-potential
programme to develop leadership
capability and help individuals
understand themselves and their
capability at a deeper level.
‘The Accelerated Leaders
Programme (ALP) is aimed at
those who have been identified
as “high potential” and tracking
to one of the 25 key risk roles
as a successor within five years.
ALP participants complete
formal group modules, personal
tailored development and are
encouraged to use peer-to-peer
learning, maximising on their
growing network. The programme
aims to create agile, emotionally
intelligent leaders for the future.’
Nita Devshi,
Head of Organisational Design &
Talent
Data plays a crucial role in
steering the development of
the initiative, and evaluating its
success. The business holds the
HR team to account through
the performance data collected
from the ALP. Reporting data
on a frequent basis means that
the ALPers can be tracked using
agreed key measures, and should
there need to be any ‘in-flight’
modifications, the business can
adjust and steer accordingly.
It also enables the HR team to
effectively work with the business
to push particular strategies and
people priorities – for example, to
ensure a good diversity of talent
flowing through the programme.
Appendix 1
‘We corporately set targets,
which is quite challenging to
meet as we’re reliant on devolved
businesses providing a sufficient
pool to meet them.
‘For example, a target of 30%
female representation on the
programme is only achievable if
we have 40–50% nominated for
assessment in the first place.
‘The measures set are
representative of the total
population within the organisation.
Gathering such data in the first
place is therefore critical for us
to demonstrate progress and
success.’ Nita Devshi, Head of
Organisational Design & Talent
Data in the form of feedback
forms and performance
management information is also
collected, particularly at the stage
of assessment and selection. This
stage of data use is important
because it allows the assessors to
make informed decisions about
who is currently suitable to join
the ALP, and then track their
progress through the programme.
‘As part of the assessment centres
we collate evidence about the
individual’s aspiration, ability and
engagement. Performance data
is provided by the line manager
to support the individual’s initial
nomination.
‘We have yet to agree a set
of consistent performance
measures for the ALP across the
business because of the variety
of roles included, which creates
complexity. This is something we
are working on at the moment,
looking at more general measures
where data can be available.’
Nita Devshi, Head of Organisational
Design & Talent
Developing internal
capability to complete HR
analytics
As well as bringing the business
up to date with new technology
and innovations for managing
data, Network Rail must also build
the capability of staff to use data
and new technologies. The shift
to being more data-driven as a
business is one which will take
time and commitment from the
organisation.
‘One of our challenges is that if we
change systems or processes, a
large number of people will need
to be trained. We are making
use of new technology, but we
have to go at the pace that it can
be trained and absorbed in the
business.
‘We recognise that some
employees in our business don’t
use technology in their day-today life. Therefore we can’t make
assumptions about what they do
and don’t know to start with – we
have to be considerate and take
them on the journey with us.
For example, the maintenance
workers’ focus is not necessarily
the technology but more on
delivering a good function job.
That may mean laying new pieces
of track or ballast. This relies a
lot on experience, not necessarily
being data-driven. There can
certainly be a cultural dimension
to it.’ Ian Iceton, Group HR Director
The HR function recognises that
shifting the business to new ways
of working will take time and
commitment by HR, and also the
line management community the
HR function works closely with.
Clear and transparent use of
people data is one of the ways by
which Network Rail’s HR function
will develop capability within the
business.
Using scorecards to report
on vital human capital data
For an industry driven by
performance and strict adherence
to timelines, the business uses
extensive reporting to keep track
of its human capital and project
management data. Frequent
reporting by HR through a
balanced scorecard allows the
senior leadership team to keep
track of those topics which are
important and timely within the
business and, where necessary,
make leadership decisions to
steer the organisation.
‘We use a number of
communication channels to
reinforce the messages to our
senior leadership team. Our CEO
does a regular briefing on our
intranet. Our business scorecard
is published every month so that
people can look closely at the
data. There is an expectation
within each function that the
51
scorecard is considered and used
in functional meetings. Support
is also given to line managers to
provide knowledge and awareness
on how to use the scorecard in
more-local team briefings.’ Ian
Iceton, Group HR Director
The people data in the scorecard
is one of the most important
categories, as it relays key
performance indicators
regarding health and safety and
performance of the workforce,
two hugely important concepts
at Network Rail which permeate
throughout the organisation’s
leadership and management
culture:
‘We are a business that is
really focused on safety and
performance going hand in hand.
We also use a lot of opportunities
to talk about safety-related
matters … when we talk about
the health and well-being of
ourselves, our colleagues and
avoiding safety issues, everyone
listens. It is more powerful if we
can provide metrics to illustrate
why it is so important for wellbeing and performance. There
is a way to tie the two together.’
Ian Iceton, Group HR Director
The future of people data
at Network Rail
Consistency and standard
measures are the desired
objective for people analytics at
Network Rail. For the organisation
to be able to effectively drive
performance and link HR
activity to business outcomes, it
recognises that it must have a set
of standardised measures which
can be used across
the business to clearly
communicate the link between
people and performance.
‘Within the next five years we will
move to being clearer and more
consistent about the things that
we are measuring and why we
are measuring them. This will help
us to identify the levers that we
can pull to effectively change the
business. We will be able to report
improvements and see that we’re
not just capturing something
for the sake of it, but it was
absolutely leading to improved
business performance. This is our
goal with HR data and analytics.’
Ian Iceton, Group HR Director
Appendix 1
ASDA: People analytics and the
changing business model
As one of the UK’s largest supermarket retailers, ASDA recognises the importance of its
colleagues. With a workforce of over 170,000 people, serving 19 million customers a week
and generating £21 billion of revenue in 2014, the footprint of the business is vast.
The changing landscape
of retail
Innovation and change are driving
forces for organisations such
as ASDA. Changing consumer
behaviour means that for the
business to operate in the
highly competitive retail market,
employees must be equipped
to operate within complex and
challenging environments. For
example, over half of in-store
transactions at ASDA now go
through a self-scan checkout;
employees are now hosting
customers, helping with queries
and managing multiple checkout
sites at one time. This shift in
customer service and customer
management within the business
model is challenging the
traditional supermarket retail skills
that ASDA has built ever since
being founded in 1965.
Where once repeatable and
predictable tasks could be
trained and operationalised
through training of customer
service staff, now more complex
and individual-based skills are
required. Decision-making and
autonomy are a pair that are
thought to be of particular
importance to ASDA in the future,
as Hayley Tatum, Senior Vice
President for People and Stores at
ASDA, explains:
‘The challenges are about helping
our colleagues to understand
that delivering great service and
meeting future business needs
requires an acceptance that the
business must change and adapt
quickly. Therefore, being able
to manage with autonomy and
agility is an essential skill and
is something to be relished and
prized, not something to resist
and be afraid of.’ Hayley Tatum,
Senior Vice President for People
and Stores
Rapid growth in online and
mobile shopping is also acting
as a catalyst for the business,
pushing for innovation
throughout operations and
people development. Workforce
planning is one particular aspect
of ASDA whereby innovation,
and in particular automation,
will radically alter the makeup
of the retail business. New skills
and capabilities are therefore
being planned into the future
52
workforce, and mapped against
current capabilities – the gaps
being addressed through new
HR interventions, training and
deployment of workforce skills.
With this disruption only on the
increase, the business is tracking
its performance through two
key HR measures: customer
satisfaction and engagement:
‘From an HR point of view,
some of the key questions at
the moment are around how
many colleagues we need, and
what skills they will need to
develop. For example, what is
the optimum level of service for
our customers, and how many
customers should one colleague
be serving at any one time? This
is not just an operational question
– this also affects who our people
are and their suitability with
their role … our colleagues are
dealing with different technology,
different customer reactions:
their own capability is suddenly
being challenged. We have to
support them to continue to
be happy and productive in the
future' Hayley Tatum, Senior Vice
President for People and Stores
Appendix 1
People as the drivers,
analytics as the enabler
ASDA’s people are at the heart
of the organisation’s growth
and success, and reflecting the
diversity of the communities
in which the business operates
is important for the business
to continue to meet the high
expectations of its customers.
Utilising this diversity in the
workforce is a powerful way,
then, for the business to connect
with customers and deliver the
type of service they desire – as a
result HR strategy and operations
are tailored to reflect the
individual needs of employees.
This is particularly apparent
when considering workforce
demographics and the very
personal needs of staff, which,
if met correctly, can drive longterm performance. Working at
this individual level is just one of
the ways by which HR analytics is
bringing HR teams closer to the
needs of individual employees
and is enabling them to tailor the
function accordingly:
‘In ASDA we’ve got more than five
generations under one roof. We
were celebrating a gentleman’s
90th birthday the other day; he
works for us 12 hours a week. The
best part of the whole story is he
has ten years’ service, so he was
80 when he joined us. What he
might need and his needs as a
colleague versus someone on our
graduate scheme might be quite
different, so it is very important
to me that I’m engaging with the
colleague on an individual basis
and not broad-brushing. On some
things we might all be the same,
but on others we might not be.’
Hayley Tatum, Senior Vice President
for People and Stores
As a result, the organisation’s HR
strategy is built around the three
key pillars of culture, talent and
ways of working. Engagement
in particular is an area which the
business focuses on within the
culture and engagement pillars,
with considerable attention paid
to appreciating the relationship
between engagement and
performance. The organisation
has a dedicated role within
the function: the engagement
analytics manager, who leads
the organisation’s push to better
appreciate this relationship, and
is responsible for managing and
reporting on engagement data:
‘My role is within the engagement
space at ASDA and concerns the
measurement and quantification
of engagement, the planning and
development of engagement
proposals and how we as a
business drive engagement. I am
interested in exploring the return
that we get from our employees
and which measures we can
put in place to track mood,
aspirations and motivations.
This is of real importance
to ASDA as a business.’
Engagement Analytics Manager
As a driver of performance
ASDA is aware that engagement
is one of the major levers that
can be used to ensure that
customer satisfaction remains
high. Senior leadership teams
are most interested in this
because, along with developing
and providing quality goods,
customer engagement is one of
the most important activities the
business can deliver on to create
value. By exploring engagement
data the leadership team is
encouraged to sense-check
how HR processes and systems
are driving the right behaviours
in employees, and particular
aspects of engagement which are
believed to be directly correlated
to crucial measures of business
performance, including both
sales and customer satisfaction:
‘Segmentation analysis is really
important to me. It saves me a lot
of money if I can be precise and
tailored about how I am talking
to my teams. Equally, it helps me
with engagement and I’ve got
direct correlation between our
engagement scores and things
like shrink performance, waste
performance, wages, sales and
obviously customer satisfaction.
This shows the importance of
engagement as an HR measure
when we are looking to create
competitive advantage in our
business.’ Hayley Tatum, Senior Vice
President for People and Stores
53
But while many organisations may
view surveys as the be-all and
end-all of engagement, ASDA is
clear that it is the conversation
and behaviours that result from
surveys which are of value. The
engagement team recognise the
value of this ongoing dialogue
and discussion with employees,
and therefore communicate
openly during and outside of
the survey period. Instead of
forcing responses and driving
the wrong behaviours in the line
management community, team
leaders are encouraged to lead
powerful conversations within
their teams that are proactive and
open, designed to create dialogue
and create the right conditions
for high-quality customer
interactions:
‘If I just talk about response
rates: it’s really important
for us to get as many people
through the surveys that we
do, so they have a voice. That’s
what we want to encourage in
our colleagues, but actually we
know that it doesn’t make a
difference in terms of the output
of numbers that we get, because
of convergence of the data.
‘We say to our senior
stakeholders, “It’s not really that
important if you don’t get 100%,
but actually make sure you’re
encouraging your colleagues,
as many of them as possible, to
participate. Don’t force them.”
That can be quite conflicting, I
think, for our leaders, so we help
them to understand it as much
as possible.’ Engagement Analytics
Manager
The people analytics
function
Retail, with its significant
workforce and vast geographic
footprint, is naturally driven
by operating costs, one of the
biggest being its workforce.
Payroll then is one of the most
important data-rich activities
within the wider HR function;
and given the desire of the
organisation to drive performance
while efficiently using resources,
productivity is a key performance
Appendix 1
indicator for both internal
and external stakeholders:
‘Analytics has been used in
retailing for many years because
it’s a people business and people
are your biggest cost, other
than your cost of goods. The
largest bill is your payroll bill. So
understanding how long each
task takes, whether it is done well,
and then being able to refine and
value-engineer tasks to modify
your wage costs accordingly is
very important. Many retailers
challenge themselves every
year on how many millions they
can take out of their cost base
as a result to re-invest for the
customer and shareholder.’
Hayley Tatum, Senior Vice President
for People and Stores
To drive these cost-control
activities, the business draws
on basic productivity and
performance measures which
help to illustrate how employees
across the business are delivering
in their roles. Based around time
to delivery, these measures of
productivity play an important
role in maintaining service-level
standards, and help focus the
training and development of staff:
‘In terms of employee analytics
we measure service, transaction
times on a checkout, time to
restock, time to deliver, and so
on. We centralise this data and
use it to manage and maintain
standards. We can see optimum
pick rates, optimum scan rates,
and transaction times and then
we set targets and standards that
we train towards, encouraging
and coaching our colleagues
to achieve certain levels of
performance for the customer.’
Hayley Tatum, Senior Vice President
for People and Stores
present, wages would be at the
top, as this tells us how much
we’re spending on our employees.
Then it would come down to how
much they’re costing us when
they leave, and also absence.
Our sector is highly focused on
cost management, and this is
reflected in our HR measures.
Those two quantitative sets
of data are important for us
in the financial sense. Then if
we were to move through the
spectrum, measures regarding
engagement, performance
tracking, and qualitative data
such as how they feel, and so on.’
Engagement Analytics Manager
The size and scope of ASDA
mean that within the organisation
there is real talent and capability
available and ready to be
leveraged. Following ASDA’s
acquisition by American retail
giant Walmart in 1999, ASDA
has been able to access people
analytics capability which was
previously unavailable. And
while UK-based ASDA has only
recently started to delve into
HR analytics and explore how
people data may help drive
performance, the Walmart team
has long invested in attempting to
answer the people performance
question. So much so that the
Walmart function has a highly
capable people analytics team
and is now driving insights in
collaboration with their ASDAbased counterparts:
‘I am very lucky because,
obviously, ASDA is owned by
Walmart. There are dedicated
people inside the analytics team,
not only in ASDA, but they can
work with and leverage, from a
systems and a capability point of
view, into Walmart.
The analytics team has worked
hard to develop core measures
that the business holds as
standard measures. These
standard measures are applied
by HR, the custodians of people
data, to all the information they
manage, with the aim of drawing
comparisons and moving the
business towards potential
benchmarking against peers
and competitors. For ASDA
the metrics order into a logical
hierarchy of value to the business:
‘It also allows me to share
information and learning with
other markets. Obviously, ASDA
being in the UK is one of 29
countries in which Walmart
trades. So I’m able to utilise
global insight and understand
if somebody else has already
cracked a problem which perhaps
I’m only just beginning to face.
I’m able to get information and
guidance from across our expert
network.’ Hayley Tatum, Senior Vice
‘I think if we were to order them
in importance to the business at
This global perspective on people
data is now helping ASDA to build
its own capability and deliver
President for People and Stores
54
insights across its UK operations.
Investment for the business
is now in building individual
capability by sourcing highly
capable analysts with a basic
understanding of people and the
HR function. At present analytical
skills at ASDA are based around
an equal weighting of data
understanding, plus the ability to
communicate and influence using
evidence. For ASDA, both skillsets are needed: one without the
other can lead to misinformation
to the business with potentially
damaging results:
‘The skills that I would say my
own team have, they’re techsavvy, and so they know how
to get around quickly and
present and get information.
They’re disciplined in working
through things like algorithms
and finding patterns and trends
in information. But they have a
very personable style that they
can then go and test. So they
don’t only take the information
at face value: they’re able to then
go out and run focus groups
and check it, and then present
it, which is a very important
skill to have. It gives me and
our leadership team confidence
that the right tests have been
taken to provide robust and valid
insights.’ Hayley Tatum, Senior Vice
President for People and Stores
Customer data and
employee data
to create insight
While measuring standard
metrics is important for HR
operations, the value of data
grows significantly once it is used
in the form of insights across the
business. A fundamental role of
the HR analytics team is to build
clear reports which deliver timely
insights across functional teams
and senior leaders. And because
data availability is increasing,
the number of potential reports
that HR must develop and
understand is also going up. It
is for this reason that ASDA is
now looking to rationalise their
HR measures and present them
as a simple dashboard which
illustrates key performance
indicators connected to the
three HR strategic priorities.
The business is working with
external experts to use HR data
within the dashboard report
Appendix 1
which will feature alongside other
business metrics. Accompanying
the dashboard will be narrative
information which is intended to
provide a holistic perspective of
ASDA’s people, in the context
of focusing on business and
customer performance. This tool
is now in development by the
HR team and is one which they
believe will radically change the
way the business uses HR data:
‘We’re in the process of creating
a dashboard. We’ve never really
achieved it … on our retail side
we’re looking at how our key
performance indicators in HR
link to the overall business
performance indicators. We’ve
worked with a consultancy that
has been able to link output
measures back to input drivers.
Now we’re going to look at
some of the HR angles in that
data, for example, what makes
the difference in terms of our
home shopping picking accuracy,
and how that impacts on sales.
What we want to do now is join
everything up. At the moment we
don’t bring everything together,
for example, by talking about data
holistically and how it impacts
wider business. We tend to be
quite siloed in the way that we
work. We need to develop greater
integration between our different
types of data.
‘The dashboard that HR is building
will help to change this as it will
use HR data and engagement
data to tell the story clearly. It
will show absence and turnover,
and so on. We’re also working on
how we would reduce some of the
reporting of requirements, which
are very manual, to feed into that
so that it would then be a very
holistic view.’ Engagement
Analytics Manager
It is clear then that ASDA
recognises the importance and
value of high-quality people
data. Across the business data is
used in multiple ways and is now
being utilised alongside other
types of business information.
ASDA has put in place senior
leaders with oversight and
governance responsibilities within
the data and analytics space,
predominantly around customer
data, where value is driven from
insights through to increased
sales. Market insight in particular
is important in the highly
competitive retail environment,
where customer loyalty is
shrinking and customer behaviour
is increasingly fickle.
‘We have a chief customer officer
whose role is to oversee customer
insight and intelligence and how
the business uses this information.
This capability provides data
frequently. For example, it
provides an ongoing pulse of what
our customers are saying and how
they’re behaving. Because what
customers say isn’t necessarily
what they do, you have to
continually measure and monitor
their actual behaviour.
‘You can then compare a lot of
that information with competitive
market information so you can
see how we sit by comparison.
We’ll do a whole variety of
things, for example in our stores
where we’ve got focus groups
and listening groups with our
own customers and with our
competitors’ customers, just to
understand different reactions
and behaviours. Then we’ll
analyse this data and choose
what to do in our business
that might affect competitive
service.’ Hayley Tatum, Senior Vice
President for People and Stores
This direct action from market
insight through to alterations in
customer service or operational
delivery models is driving real
value-creation in the business.
Leaders too are now using this
data in various ways, and it is
during its combination with
employee data when truly
powerful people insights can
occur. ASDA has recognised
this and is focusing much of
its analytical development on
building this multidimensional
analytics capability – and while
there is some way to go until
the business is able to benefit
from these insights, there is
definite belief that utilising data
in this way will drive business
performance in unique and
innovative ways.
Data as the weapon in the
war for talent
ASDA then is very much futurefocused, and in preparation for
the increasingly competitive retail
environment the chain is building
55
its capabilities in analytics
and focusing on modifying its
human capital through various
HR activities and interventions.
Through all of this, data is playing
a vital enabling role, and the
analytics that HR is applying to
data is uncovering fascinating
concepts the business is now
building into its workforce,
engagement and customer
service plans. Management
capability is one area of focus
which the business now believes
should be enhanced and made to
be future proof. The new context
and evolved business model
mean that managerial roles are
expected to decline in number,
but the need for strong capability
to innovate and drive customer
service will continue to grow:
‘In the future I believe we will
have fewer managers and more
engaged, contributing teams of
colleagues who figure stuff out
for themselves. I’m certain those
closest to the customers will come
up with brilliant and the best
solutions.’ Hayley Tatum, Senior Vice
President for People and Stores
For Hayley and her colleagues,
it is HR analytics which holds
the key. By applying the
same techniques of customer
segmentation and analysis to their
engagement and people data,
the team believe that they will
unlock the ability of employees
to behave and engage with
customers in such a way that they
deliver high-quality service every
time, and deliver the competitive
advantage the business needs to
succeed today and well into the
future:
‘I’d like the data to tell me how to
get the most engaged colleague
that I possibly can to give the best
level and noticeable, industryleading service in the market. If
I could find that, that would tell
me, “What does that colleague
do, say, and sound like?” From
a behavioural point of view I
believe that would give us a real
competitive advantage.’ Hayley
Tatum, Senior Vice President for
People and Stores
Appendix 1
British American Tobacco: Building centres
of excellence for people analytics
British American Tobacco (BAT), one of the world’s biggest listed tobacco producers, has
delivered solid earnings growth in recent years despite a raft of regulatory challenges.
Introduction
The London-headquartered
group’s tenfold share-price
increase since 2002 to become
a £75 billion behemoth is due in
part to its commitment to a highquality people strategy.
According to Gordon Barrie,
BAT’s outgoing head of corporate
HR, at the heart of the strategy
is the group’s rigorous talent
assessment and regular reviews,
which surpass anything that he
had seen previously.
Barrie – who held finance roles at
BAT until 2012 when he became
head of HR for IT and finance,
then global head of corporate
HR two years later – says: ‘In my
previous finance career it was
always numbers and plans and
cycles, but at BAT for the first
time I saw detailed succession
plans for every role.’
The company’s investment in
succession planning, leadership
development, talent management
and business partnering training
for the global finance pipeline
really dates back to the 1980s,
when finance partnered with
Cranfield University professor
Keith Ward: ‘As a result,
we created an integrated,
aligned and joined-up global
community of people,’ says
Barrie, who is leaving the
group in late spring 2016.
Ward’s influence was key in
driving a partnership approach
between finance and consumer
and trade marketing in the end
markets, enabling BAT’s evolution
from an audit and controloriented financial operating
model to a more commercial
finance approach. The new
commercial capabilities also
helped build a more meritocratic
and nationally diverse talent pool
across one hundred different
markets, with local rather
than solely expatriate career
development and succession.
At the same time BAT started
a long-term relationship with
Human Qualities, a business
psychology practice, to jointly run
leadership capability assessment
and development centres for
its international finance talent:
‘The result is an incredibly
diverse talent pool in terms of
high-potential and succession.
This incredible offer in people
development and leadership
56
investment has defined the
agenda for leaders within the
company at all levels,’ Barrie adds.
Centre of excellence
To ensure that the same level of
career development was rolled
out across the whole group,
BAT launched a global centre
of excellence for talent and
organisational effectiveness
three years ago. Didem Aydin,
who looks after BAT’s talent
development for finance and
IT functions worldwide, says:
‘The centre has achieved better
investment resource-allocation
decisions in different functions
and across geographies.’
BAT’s global business had
migrated from a
largely dispersed holding
company to a centralised,
integrated enterprise, with a
single chart of accounts and
common systems ‘Now it is
completely integrated. Resourceallocation decisions that were
previously dispersed and
inefficient are now centralised,
including the people and talent
strategy,’ says Barrie.
Appendix 1
Barrie says there is no
requirement to push for a more
inclusive group at BAT as the
talent model, sourcing talent
from its business units all over
the world, means it is already
very nationally diverse: ‘This
headquarters has people of at
least 85 different nationalities,’
he declares.
There is also an emphasis on
hiring and stretching leaders
from the countries in which
growth will be generated: ‘That
is a huge alignment between the
people strategy and the business
growth strategy,’ says Barrie. ‘It’s
about finding the right balance
between succession for the board
and getting the right teams in
the marketplace.’ The many
nationalities on the board confirm
the success of the approach.
The analytics of the centre
of excellence include a
detailed dashboard, shared
with all the regions, and the
functions that can be sliced
by markets, geography, grade
and management population.
The centre’s impact will be felt
even further when a global
HR transformation using
SuccessFactors, a SAP cloud
solution, converts data stored in
multiple sources into one source
by the end of the year, says Aydin.
The value of the analytics
Reporting
The analysis gives insights
into attrition rates, turnover,
promotion rates and identification
of high-potential people,
says Aydin. ‘For global junior
management and global nonmanagement, it’s hugely relevant
and significant,’ adds Barrie.
When it comes to reporting
BAT’s people strategy, Barrie
says the company’s four strategy
pillars – growth, productivity,
sustainability and winning
organisation – are covered
within the governance section
of the annual report. Details
of staff turnover appear
in sustainability reporting
submitted to the Dow Jones
Sustainability Index, he adds.
Such insights are particularly
valuable in addressing challenges
such as high turnover in
competitive talent markets in
Asia and increasing female
representation among the
company’s top 200 leaders.
Where global strategy and
people strategy are most aligned
is in correlating business scale
and potential value with the
best talent: ‘We prioritise our
investment on those seen as
outranking their peers in terms
of potential,’ says Barrie. ‘The
leaders in the biggest businesses
– such as Brazil, South Africa,
Russia, Germany, Australia, Japan,
Malaysia – will have typically
been identified as management
or board potential in this way.
Likewise, finance directors and
marketing directors in the major
markets will usually have the
potential to be at least a regional
functional head,’ he says.
‘The decision-making landscape
is becoming more focused on
scorecards and dashboards based
on global business information
data from a single source-data
warehouse,’ says Barrie. ‘We
have spent the last four years
implementing the world’s biggest
single SAP instance.’
Barrie says this investment
underlines BAT’s drive to
become an increasingly agile and
integrated company. ‘The tobacco
industry can be perceived as
being somewhat complacent as a
defensive, high-margin, high-cashflow stock, but maintaining profit
growth keeps management on its
toes. You cannot be complacent
– you have to be impatient
for change, agile, imaginative
and ambitious to continue
delivering to shareholders’
expectations,’ he says.
Aydin says the group’s people
strategy will play a key part in
maintaining that momentum in
a world where regulatory risks
to the business are likely to
increase. ‘It is good to see that
our leadership capabilities are
very aligned to becoming an agile
company, by focusing on business
and people,’ she says.
57
Appendix 2
Appendix 2: Valuing your
Talent Framework People Measures
Input measures
The input level of the framework represents the fundamental people-data building blocks which help
an organisation understand their human capital. This is people data at its most basic – it is absolute and
cannot be broken down any further. By combining input-level data, it is possible to build more complex
types of data and indicators.
Table 4 details definitions of each input measure, and indicative people measures that may be applied.
Table 4: Valuing your Talent input measures
Workforce composition and diversity
The characteristics of an organisation’s workforce, which includes basic descriptive demographic
measures – diversity is a measure of the differences and similarities between these characteristics
Common measures
Example
Employee profile: age, gender, race, sexuality
% of employees between 18 and 25
Departmental ratios: gender ratios at senior
leadership level
60 female : 40 male
Headcount: number of employees
Total N of employees
Modes of employment: a measure of the ratio of
labour types
45:1 full-time to part-time labour split; buy new
labour, build new labour or rent new labour
Leadership diversity: a measure of the diversity of
senior leaders in the organisation against defined
measures in the organisation’s diversity strategy
% LGBT employees in senior/leadership positions
58
Appendix 2
Workforce costs
The sum of all costs associated with the workforce
Common measures
Example
Total compensation: all direct and indirect
compensation received during a specified time
period
£N/annum salary and benefits
Guaranteed pay: a fixed monetary (cash) reward
paid by an employer to an employee – the most
common form of guaranteed pay is base salary
£N/hour
Variable pay: a non-fixed monetary (cash) reward
paid by an employer to an employee that is
contingent on discretion, performance or results
achieved. The most common forms of variable pay
are bonuses and incentives
£N/annum, where N is determined through
assessment of performance
Benefits: programmes an employer uses to
supplement employees’ compensation, such as
paid time off, medical insurance, company car
N employees accessing additional benefits (for
example life insurance)
Equity-based compensation: stock or pseudo
stock programmes an employer uses to provide
actual or perceived ownership in the company
which ties an employee’s compensation to
the long-term success of the company – the
most common examples are stock options
N employees taking out company stock
Employer costs: taxes and insurances mandated by
law and regulation
Total workforce cost: a measure of the total cost of
the workforce – a key indicator of the financial value
the organisation places on managing, maintaining
and developing its workforce (SABA 2014)
Total compensation cost + benefits cost + other
workforce costs = total cost of the workforce
59
Appendix 2
Regulatory compliance
The organisation’s adherence to laws, regulations, guidelines and specifications relevant to its human capital
– violations of regulatory compliance regulations often result in legal punishment, including fines. Adherence
to different regulatory frameworks will need to be measured for some organisations and sectors to operate
in various geographic regions.
Common measures
Example
Health and safety measures: a measure of the
number of incidents required to be reported under
statute, for example Reporting of Injuries, Diseases
and Dangerous Occurrences Regulations 2013
N number of serious incidents in 2015
Competence compliance: measure of
professional competence required to practise,
for example professions requiring a licence
to operate, measure of compliance with
anti-bribery and corruption guidance
N number of registered practitioners
Measures of critical people risk: in high-stress
environments measures regarding behavioural
risks can help to monitor behaviour of
individuals against predefined values (included
as part of the broader culture category)
Workforce potential
The organisation’s adherence to laws, regulations, guidelines and specifications relevant to its human capital
– violations of regulatory compliance regulations often result in legal punishment, including fines. Adherence
to different regulatory frameworks will need to be measured for some organisations and sectors to operate
in various geographic regions.
Example
Common measures
The availability of key skills, knowledge, competency
and experience across the workforce. The terms
‘competency’ and ‘competencies’ focus on the
personal attributes or inputs of an individual.
They can be defined as the behaviours (and
technical attributes where appropriate) that
individuals must have, or must acquire, to
perform effectively at work. (CIPD 2015b)
Distribution of qualifications in the workforce: for
example, number of employees with graduate-level
qualifications
for example, N number of employees with graduate
degree qualification or above
Technical qualifications: a measure of the
technical capability available to the organisation
for mobilisation
for example, ratio of project management trained
managers/total number of managers
60
Appendix 2
Activities measures
Activities measures are the processes available to the organisation through which it activates the human
capital available to the business. At this level activities are based around human resource and financial
management processes – data at this level illustrates a process within the organisation’s business model
which manages human capital.
In Table 5 we detail definitions of each activity measure, and indicative people measures that
may be applied.
Table 5: Valuing your Talent activities measures
Attraction and recruitment
The initial stage of the employee lifecycle provides the business with important data as to the incoming
human capital available to the business (CIPD 2011).
Common measures
Example
Employer brand warmth: a measure of the employer
brand, important for attracting new talent to the
organisation
for example, % of new recruits joining organisation
as a result of targeted role advertisements
Cost per hire (CpH): the total cost of recruiting and
on-boarding a new employee
CpH = recruitment costs/(compensation cost +
benefit cost)
Time to fill (average): a measure of the time taken to
fill an open position (ERC 2014)
Time to fill = total days taken to fill a role/number of
successful new hires
Time to competence: time it takes new recruits
to reach adequate level of capability to complete
their role
for example, Time = 5 months
Talent identification: development of people in
priority talent segments
for example, % of identified talented individuals per
department/team
Rate of retention of new starters: % of new
starters retained over a given timeframe – useful
in service industries with traditionally high levels of
employee turnover
for example, N of new starters leaving within 6
months/total number of new starters
Recruitment effectiveness: questions to hiring
manager regarding their satisfaction with the
recruitment process and its outcome
% satisfaction with hired employee
Turnover (annual): a measure of the rate of
employees leaving the organisation over a
one-year period
N leavers/year
% satisfaction with hiring process
61
Appendix 2
Performance management
The management of the performance of people, teams and groups in order to obtain predetermined
objectives and key performance indicators – process-based management against targets
Common measures
Example
Feedback breadth: ratio of people undergoing
feedback process (Mayo 2001)
= number of employees in performance review
process/total number of employees
Performance goal success rate: a measure of the
percentage of performance goals which have been
met by employees; a measure of overall employee
performance against objectives
= number of performance goals met or exceeded/
total number of performance goals set
Performance management effectiveness:
percentage of people finding positive satisfaction
from the performance management process
(Mayo 2001)
% rating their performance management activity
as good or very good
Performance management efficiency: a measure of
whether jobs are delivered in line with plans
(budgeted hours/actual delivered hours) *100%
Performance against objectives: a measure of
% of objectives met during defined period
whether performance goals are being met by
performance against benchmarks per role
employees (Department of Trade and Industry 2005)
New hire high-performer rate: a measure of the
quality of new hires entering the organisation
% new hires rated at highest level of quality
Learning and development
The process which builds the workforce capabilities, skills or competencies required to ensure a sustainable,
successful organisation (CIPD 2015c).
Common measures
Example
Return on investment: the benefits that are realised
(realised £benefits – £costs)/£costs *100
as a result of investment in learning and development
programmes
Improvement in desired behaviours: measure of
whether employees are behaving in the desired way
alongside the required values of the organisation
% of employees reporting improvement in operation
with desired behaviours
Improvement in knowledge: a measure of the impact % of employees demonstrating an improved
of training on the knowledge of individuals – a
understanding of the topic being trained
measure of training effectiveness
Hours training received: hours or days training per
person over given time period
N days/employee in given time period
Capability development: a measure of increases in
job-related capabilities (Mayo 2001)
change in N capabilities/person
62
Appendix 2
Reward and recognition
The extent of financial provisions made to employees, including cash pay and any additional benefits
package, including pensions. The purpose of employee benefits is to increase the economic security of
staff, improve engagement and drive retention. Discretionary benefits, such as free or subsidised meals
and leisure time, may also be included as part of employee reward and recognition. The term ‘total reward’
encompassing non-pay benefits.
Common measures
Example
Comp ratio (CR): a measure of the relationship
between the salary of an employee or a position, and
the midpoint of the pay range for that employee or
position (Payscale 2010)
CR = salary/salary range mid-point
Salary range penetration (SRP): a measure of salary
in relation to the whole pay range (Payscale 2010)
SRP = (salary – range minimum)/(range maximum –
range minimum)
for example £25,000/£30,000 = 0.83; salary is 83%
of the mid-point for the range
for example, (£25,000 – £22,000)/(£35,000 –
£22,000) = 0.23; salary is at 23% of the range of
potential salaries
Average compensation per employee: a measure
of the average compensation paid to all full-timeequivalent employees
average compensation = compensation/headcount
Market index: a measure of the ratio of internal
salaries compared with market rates for external
benchmarked roles; requires external benchmark
data
MI = (internal average pay – external benchmark
pay)/external benchmark pay
Bonus pay percentage: a measure of the percentage
of annual bonus paid relative to annual base salaries
bonus pay percentage = bonus pay/compensation
*100%
for example, MI = £40,000 – £36,000/£36,000 = 0.11
Employee relations
The process of two-way communication between employer and employee – employee voice focuses more
on opportunities for employees to be involved in decisions collectively, whether through trade unions or by
other means (Bucknall & Wei 2006).
Common measures
Example
Average time for dispute resolution: length of
time for which a dispute continues to exist in an
organisation. The shorter the resolution time, the
more effective the dispute resolution process
N of days taken to resolve disputes/total number of
disputes
Number of live disputes: total number
of live grievances in process at any given point in
time
N of live disputes
Type and number of live consultations with trade
unions: number of consultations by category which
are live with trade unions, and their performance
against defined targets
N by type
63
Appendix 2
Employee welfare
Describes the various services, benefits and facilities offered to employees by the employers, which are
designed to create a healthy and happy workforce. The welfare measures need not be monetary but in any
kind/forms.
Common measures
Example
Quality of working conditions: a measure of the
physical and environmental conditions of the
workplace that affect individual employees and
their ability to deliver against their objectives
in a productive and healthy way. Measures here
will depend on the sector, organisation and local
regulatory framework
for example, in a chemical plant, the airborne
concentration of airborne hazardous chemical does
not exceed the administrative control level at most
(more than 95%) points
Infrastructure for health and well-being: a measure
of the provisions provided by the organisation that
create a healthy workplace for individuals and enable
the organisation to deliver against its duty of care to
employees. This may include measures of uptake for
cycle-to-work schemes, career break provision, and
corporate gym membership.
% employees benefitting from corporate gym
membership
Knowledge management
Systematic process of finding, selecting, organising, distilling and presenting information so as to improve
comprehension of a specific area of interest. Specific activities help focus the organisation on acquiring,
storing and utilising knowledge for such things as problem-solving, dynamic learning, strategic planning and
decision-making (CIMA 2005).
An emerging set of organisational design and operational principles, processes, organisational structures,
applications and technologies that helps knowledge workers dramatically leverage their creativity and ability
to deliver business value (Gurteen 1998).
Common measures
Example
Increase in knowledge asset stock: measure of
increase in the stock of knowledge assets, typically
year-on-year
% increase in knowledge assets (including patents,
intellectual property)
Employee perception of managerial collaboration: a
measure of whether employees believe management
is creating a culture of sharing and appreciating
knowledge between individuals, teams and functions
Knowledge-process-oriented structure planned and
established: a measure of how the organisation is
structured to deliver knowledge-based processes
percentage of required changes satisfactorily
implemented
Mentoring and relationship development for new
starters: a measure of whether less senior members
of the organisation are supported by senior teams to
share and develop organisation knowledge
percentage of employees with less than five years’
service who have a godparent and percentage of
experienced employees who act as a godparent
Value-adding processes: a measure of the increase in maintain a register of new value-adding continuous
the number of implemented value-adding continuous business practices implemented, identifying the
business processes
projected and actual present value of each initiative
Work-process development: elimination of 40% of
redundant work activities within five years
cumulative percentage of identified redundant work
practices successfully eliminated
64
Appendix 2
Organisational design and development
The planned and systematic approach to enabling sustained organisation performance through the
involvement of its people. Activity includes organisational redesign and restructuring, organisation strategic
alignment, and job design (CIPD 2015e).
Common measures
Example
Management ratio/span of control: ratio of
subordinates per manager – a measure of
management depth and breadth (SABA 2014)
total management and non-management
population/total management population with direct
reports
Strategic delivery: number of strategic priorities
delivered within the stated timescale – a measure of
organisational effectiveness (FOSTER 2013)
N priorities delivered; N priorities outstanding
Goal consensus/conflict: a measure of consensus
and conflict between organisational goals and
priorities and individual objectives; a measure of
co-operation between teams and departments
number of goals in conflict vs number of goals in
consensus
Evaluation of organisation development activity:
measure of the impact of organisation development
investment, including through return on investment,
and additional programme key performance
indicators
change/uplift in specified KPIs
Workforce planning
The continual alignment of needs and priorities of the organisation with those of its workforce to ensure
it can meet its legislative, regulatory, service and production requirements and organisational objectives.
Includes the management of flows into and out of the organisation, and planning for changes in personnel in
roles of key importance.
Common measures
Example
Succession roles: number of roles identified for
succession with succession individuals allocated
N/potential position
Progress against targets: number of management
trainees recruited against agreed local targets
N recruited against target
Minimum strength time: minimum time in post for
managers in global key roles
t time
Successors in place: planned successors for global
key roles
N:pivotal roles
Succession planning depth: percentage of key roles
that have a succession pool of one or two unique
candidates (PwC 2008)
key roles with 2 successors in play/total number of
key roles
65
Appendix 2
Average time to promotion: average time that an
individual is in role before the progress to a more
senior position (Oracle 2011)
total T for progression upwards/N promotions
Average time in current management position: the
average time that managers and executives have
been in their current positions (PwC 2008)
total time in position for managers/total number of
managers
High-performer turnover rate: a measure of the
rate at which the organisation is losing talented
employees (SABA 2014)
total high-performer terminations/average highperformer headcount = high-performer turnover rate
Career path ratio: a measure of the ratio of
promotions against sideways moves (transfers),
to show the breadth of capability and illustrate
alternative development opportunities to promotion
for example, total promotions/(total promotions +
total transfers)
Talent management index: an index of defined
talent measures by the organisation that describes
key aspects of the talent management process from
across the entire employee lifecycle
combination of select key metrics, weighted by
importance and impact to the organisation
66
Appendix 2
Output measures
Output measures are the results of the investments in activity-level processes. They provide the means for
evaluating the impact of the human capital development and people management processes at the activities
level, and describe how the return on those investments can be improved, optimised and adapted to meet an
organisation’s ongoing needs.
As this data becomes more strategic, there may be less tangible measures. Consequently, proxy measures (or
approximate indicators) are often used at this level to describe human capital outputs.
In Table 6 we detail definitions of each output measure, and indicative people measures that may be applied.
Table 6: Valuing your Talent output measures
Workforce performance and productivity
The quality or fact of individuals operating against role-based objectives and targets to be able to produce
outputs and outcomes, including operational and behavioural aspects.
Common measures
Example
Performance against objectives: performance
against defined key performance indicators for
individuals and roles
% of targets met
Per-unit full-time equivalents: the measure of how
many FTEs are required to fulfil a unit of work
N FTEs/unit produced
Volume of work completed: measure of completion
of work against defined targets
Behavioural performance: performance of
individuals in line with defined behaviours set by the
organisation
% of employees demonstrating compliance in line
with organisational values and behaviours
Stakeholder satisfaction: measure of stakeholder
warmth/engagement with the organisation; measure
of the quality of relationships with key stakeholders
% stakeholders reporting positive experience with
employees
Labour utilisation: measure of how employees are
assigned tasks and the efficiency at which they are
able to deliver against their tasked objectives
availability – the percentage of time employees
spend making effective contributions
Overall labour effectiveness: a measure of the
utilisation, performance and quality of the workforce
and its impact on productivity
performance – the amount of product delivered
% of stakeholders reporting that objectives were met
to the desired level/standard
OLE measures availability, performance and quality.
quality – the percentage of perfect or saleable
product produced
• availability = time operators are working
productively/time scheduled *100%
overall labour effectiveness = availability *
performance * quality
• performance = actual output of the operators/the
expected output (or labour standard) *100%
• quality = saleable parts/total parts
produced *100%
Effectiveness: utilisation of resources such that the
output of the activity achieves the desired result
actual output/expected output * 100%
67
Appendix 2
Efficiency: achievement of either maximum
useful output from the resources devoted to an
activity or the required output from the minimum
resource input
resource actually used/resources planned to be used
* 100%
Expected productivity: the forecasting of potential/
desired productive effort
expected output/resources expected to be
consumed
Actual productivity: the measure of real efficiency of
production
actual output/resources consumed
Leadership capability
The capacity to establish direction, influence and align others towards a common aim, motivate, and commit
them to action and make them responsible for their performance. Leadership ability is a mix of skills and
knowledge, applied with authentic behaviour and attitude, which enables individuals to lead others towards
a stated objective or goal.
Common measures
Example
Leadership bench strength: number of leaders
trained to defined standard are exhibiting required
behaviours
N leaders trained to defined level
Quality of leadership: the assessment through
performance management processes, including 360
assessment
% defined high leadership grade
Leadership review process measures: measures
defined for the quality of the leadership process, for
example quality and outcomes of project
Talent distribution: a measure of where identified
talented individuals are deployed in pivotal roles
N pivotal managers/total key roles *100%
Talent distribution: proportion of top managers in
pivotal roles, or global key roles, as defined by the
organisation’s HR and talent development strategy
(Mayo 2001)
N defined top managers/total number of key roles
Development plan impact: a measure of the success
rate for achieving agreed development plans for
progression managers
N development plan objectives completed to good
quality/N development plan objectives set
Executive Stability Ratio: The ratio of executives
with less than 3 years’ experience over the number
of executives with more than 3 years’ experience.
68
Appendix 2
Engagement and well-being
A workplace approach resulting in the right conditions for all employees of an organisation to give
their best each day, committed to their organisation’s goals and values, motivated to contribute to
organisational success, with an enhanced sense of their own well-being, and the wellbeing of others
(Engage for success 2016).
Common measures
Example
Engagement index score: An index score of the
responses of individuals to questions exploring
aspects of their employment which may impact
on their engagement. These can often include:
organisation purpose, team relationships, inclusion
and fair treatment, relationship with manager,
relationship with work, and quality of development
opportunities.
Engagement Index: 70% engaged
Commitment People responding that they have high
levels of commitment, satisfaction and recognition
(Mayo 2001)
% positive opinion survey responses re: satisfaction
questions
Ill-health retirements: number of retirements due to
issues relating to ill mental or physical health, as a
result of work
N
Voluntary resignations: number of voluntary
resignations as a result of dissatisfaction with and/or
health standards and work
N
Absenteeism rate: a measure of number of
incidences when employees fail to report for work
when scheduled to do so; can also be measured
and reported by job category or by performance
category (Bucknall & Wei 2006)
N days lost in specific period/total N of staff working
days available in the period
Mental health well-being rate: days lost due to
incidences of low mental well-being
N days/year
Employee assistance service usage rate: number of
incidents reported during a defined period to the
employee assistance line
N assistant issues/month
69
Appendix 2
Quality of support received through employee
assistance service: a measure of quality on the part
of the employee as to how the employee assistance
service performed, using a number of measures
% satisfaction with support received
% likelihood of recommending the service to a
colleague
Business operating model
A business operating model is the combination of roles, skills, structures, processes, assets and technologies
that allow any organisation to deliver on its service or product promises. In effect, it is the way the business
is set up to deliver.
The operating model of the organisation can be split into five categories: (Amito Zott 20120
1 process
2 information systems
3 locations and buildings
4 organisation and people
5 suppliers and business partners.
Common measures
Example
Process measures: measures of the effective delivery process efficiency = value-added time/total time
of process-based activity according to ideas of
efficiency (transactional) = execution time/cycle time
productivity, performance and efficiency. Process
measures are part of the measure of the ability of the
organisation to drive value from groups of activities.
Information systems measures: measures that
describe the quality and effectiveness of the
organisation’s information systems to deliver value
to the organisation. These can include measures
of system quality, information quality, use, user
satisfaction, individual impact and organisational
impact (Palmius 2007)
measure of user feedback exploring:
Location and buildings measures: measures of the
geography and dimensions of the buildings and sites
used by the organisation
geographic location information
• satisfaction
• democracy/voice
• influence
• learning
Organisation and people measures: a summary of
the human capital measures that can be used to
describe the people in the organisation, selected at
the discretion of the senior leadership team of the
organisation
Suppliers and business partner measures:
measures of the quality and effectiveness of
activity throughout the supply chain, including
immediate and distance partners of the organisation.
Performance of the partnerships and supplier
relationships, including price, total cost, service,
on-time delivery, efficiency and responsiveness
70
measure of quality assessed by survey that includes:
• delivery against objectives
• cost-efficiency
• responsiveness to enquiry
Appendix 2
Outcome measures
Outcome measures tell organisations and their stakeholders whether outputs are translating into value. Value
to the organisation will include financial, human, intellectual and customer value. Outcomes also describe how
the organisation is sustaining itself to deliver value, not just for today but into the future. They help answer
the question of whether the organisation is able to meet its stakeholder needs today and whether it has the
capacity to be innovative, agile and resilient to meet the challenges and opportunities of the future.
Data at this level of the framework is of considerable value to the leadership and management of an
organisation. It consists of a mix of financial and people measures but is typically built of proxy indicators.
To consistently measure this most complex level of data requires significant investment, but can offer
significant reward.
In Table 7 we detail definitions of each outcome measure, and indicative people measures that
may be applied.
Table 7: Valuing your Talent outcome measures
Innovation, agility and resilience
Innovation describes the process of changing or creating more effective processes, products or ideas which
can increase the likelihood of the business succeeding. Agility is the capacity of the business to identify and
capture opportunities more quickly than rivals do. Resilience is the organisational capability to anticipate key
events from emerging trends, constantly adapt to change and rapidly bounce back from disaster. (Mckinsey
& Co 2009).
Common measures
Example
Innovation activity: a measure of the introduction
of new, improved products or processes
(Rogers 1998)
N new processes implemented
Percentage of sales from new/innovated products:
ratio of sales against total sales which have resulted
in recent innovation activity on new product lines,
or established products (Rogers 1998)
sales of recently innovated products or services in
the period/total sales in the period * 100%
£ spending on innovation
Intellectual property statistics: measures of
development of new intellectual property for
the organisation (Rogers 1998)
Number of patents
N
Number of trademark applications (successful
and failed)
N
Successful trademarks
N of successful trademark applications/total N
trademark applications
Total amount of research grants successfully
awarded to the organisation
£ of grants successfully awarded to organisation
Cybersecurity KPIs: measures of cybersecurity risk
that illustrate the compliance of an organisation
against measures to protect knowledge and
intellectual capital. Measures here can include those
which point to numbers of incidence, as well as type
and frequency of cyber espionage activity
Critical IT update lapse time: the time between an IT
provider supplying a critical security update and the
organisation’s full IT system installing it
T time
71
Appendix 2
Culture
The values and behaviours that contribute to the unique social and psychological environment of an
organisation (Business Dictionary 2018).
A set of beliefs and values shared by members of the same organisation that influences their behaviours
(Schein 1990).
Common measures
Example
Knowledge: measures of employee knowledge of
the values of the organisation; measures of whether
individuals can recognise the organisation culture
and understand when behaviours are inconsistent or
misaligned (Business Finance Magazine 2011)
Perceptions: employee opinion of the culture of the
organisation, its leadership, and their peers; focus
on identifying desired values and priorities and that
which exists in reality
Behaviour: reporting on incidents of good behaviour
which are related to the stated values of the
organisation, and the values of individuals within the
organisation
for example, N incidences highlighting prioritising
individual merit over employee well-being
for example, N of employees fired for acting outside
of stated behaviours and organisation culture
Alignment of business and team strategies against
for example, increase in management behaviours
defined objectives: measure of how aligned
aligned to business objectives and defined business
individual, team and function objectives are to overall culture
business objectives (Kissmetrics 2015)
Organisation performance
An analysis of an organisation’s performance as compared with goals and objectives. Within corporate
organisations, there are three primary outcomes analysed: financial performance, market performance
and shareholder value performance (in some cases, production capacity performance may be analysed)
(Business Dictionary 2016).
Common measures
Example
Earnings before interest, taxes, depreciation and
amortisation (EBITDA): a non-GAAP (Generally
Accepted Accounting Principles) measure of
profitability, which can be used to compare
companies and industries from the external/investor
perspective – best used in combination with other
financial performance measures (Investopedia 2016)
revenue – expenses (excluding tax, interest,
depreciation and amortisation)
Earnings before interest and tax (EBIT): a nonGAAP (Generally Accepted Accounting Principles)
measure of operating profit – does not include tax
burden or capital structure
revenue – operating expenses
or
net income + interest + taxes
72
Appendix 2
Organisation efficiency: how well the organisation is
using its resources to meet its strategic objectives;
this includes both its financial and human resources
(Vanbruaene 2011)
Cycle time: the time it takes for a process to be
completed
total time for processes/total number of processes
undertaken
Average response/customer service time: the
average time it takes to complete the desired service
for the customer/client
total time serving customer/total number of
customers
Organisation effectiveness: extent to which the
service provided meets the objectives and/or
expectations of the organisation and/or a customer
(Vanbruaene 2011)
N customer in Region X
Coverage: number of customers/clients served,
often by geography, business unit, and so on
Quality: the proportion of service provided
without error
• the proportion of services provided without a
complaint or the ratio of complaints to total
services provided
• the proportion of services produced at a specified
standard
• the proportion of services provided with
compliments from customers
Customer/user service: customer/user satisfaction as
measured by a predefined survey
Market capitalisation: the market value of a
company’s outstanding shares, and an indicator of
company size
Stock price * total number of shares outstanding
Share performance: measures of the value of
company shares, and therefore the value of the
organisation
Earnings per share: a measure of company profit –
shows the amount of money being made per share,
but does not include information about expenses
(profit – dividends)/number of
outstanding shares
Price to earnings ratio: a measure which
compares the current price of the company to
its per-share earnings
price per share/earnings per share
Return on equity: a measure of a corporation’s
profitability; reveals how efficient an organisation is
at making profit
profit/amount of equity (investment)
Compound annual growth rate: a measure of the
annual growth of investments
73
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