Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Engaging, Motivating and

Developing Finance Talent to

Deliver Business Value

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Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Engaging, Motivating and Developing

Finance Talent to Deliver Business Value

Jeff Higgins, CEO & President, Human

Capital Management Institute

• 15% productivity gain and lower costs ($55.0

Billion Package Delivery Co. )

• Predicting sales stars pre-hire{$1.0 Billion Bank}

• ROI of sales training {$2.0 Billion Retail Co.}

• Location optimization for talent growth • {large Regional Bank}

• Employee engagement service level revenue

impact {$1.0 Billion public Airline}

• 40% voluntary turnover reduction {public, financial

services co.}

• ROI of internal vs. external hires {public bank}

$1.1 Billion Annual

$264 Million Annual$1.1 million per sales person

$250 Million Annual $250k per Salesperson

$200 Million 10 years

$96 Million Annual $5 per flight premium

$12 Million Annual majority sales + operations positions

$6 Million Annual

Examples: Talent Analytics ROI

Keys to Success:

Formalize Workforce Strategy

• Shared Strategy across HR

Find the Right Key Metric Indicators

Create Data/Reporting Standards

Build Analytics Skills, Create Focus

Integrate Disparate Datasets

• (BI or HRIS systems)

Strong Processes and Tools

• Governance/Oversight

• Build/buy analysis tools

Analytic Answers to Key Questions

Change Management/Adoption

Workforce Strategy

Data Integration

Repeatable Process

CapabilityKnowledge

A Strategic Approach to Analytics

Cost of the

problem

Cost of the Solution

ROI of the Solution

Targeted Training

Intervention

Key Assumptions:

1. Cost of Training vs. cost of doing nothing = small short term savings

vs. big long term cost

2. ROI of Training = Productivity Gain + Career Path + Skills Gain +

Talent Bench

• Talent Shortages

• No Successors

• Time to Productivity

• Turnover Lost skills

• Deep Talent Bench

• Ready Successors

• Productivity Gains

• Skills Transfer

A VERY Simple Training Business Case

Questions!

How do we know our training $$$ are well

used?

What do we measure?

Do employees value training?

Does training drive productivity?

Engagement = Measure pre/post training engagement

Productivity = Measure pre/post training productivity

Retention = Measure pre/post training retention (i.e. critical roles

or High Performers)

Bench Strength + Career Path = ROI of internal Development

Measure by Job

Category and

Critical Role

Measure each

Training Course

or Series

NOTE: Training

ROI drives

Productivity,

Career Mobility,

Engagement

and Retention

1

2

3Total Cost of Workforce = Lower

workforce cost vs. outside replacement cost

Measuring Training Effectiveness How Training Adds Value

Base Data - No Metrics

Training Course #1, Skills 20% Qualified

Basic Qualifications

Steps on the Career Path

Strong Performance and Experience

Technical Training Course #2, Skills 40% Qualified

Project Management Certification Courses #3-5,

Skills 80% Qualified

Proven Performance and Skills, 100% Qualified

Promoted to next level/grade –BACK TO STARTING POINT!

The Learning ROI Journey

Promotion Cost (12% of $90k Salary)

ROI of Training for

Finance Manager Role

Cost of Training($15k employee cost per yr.)

-($30,000) over 2 Years

$33,000

$$$

k = US Dollars in 000’s

(+$125,000 + 33,000 + 20,000 - $30,000 - $11,000)

= $97,000

Engagement Productivity Gain: Finance Dept. (10% engagement gain = see case study)

$125,000 Compensation Hard Cost Savings*: Lower Total Cost of Workforce ($25,000 per yr. * 5 yrs.)

Hard Cost Savings: Replacement Cost of Hire (30% agency fee on $110k replacement hire salary)

Investment Cost Return on Investment

-($11k)

Retention Savings: Cost of Turnover Cost Avoidance

(1-2% for Finance Dept. = ($10k Turnover cost * 2 positions per yr.)$20,000

* May require use of discounted net present value (NPV) analysis on $25k savings 5 yrs. at 12% discount rate or roughly $100,000

Example Training ROI: Finance Manager “Grown Internally”

Staff Accountant

Mgr., Accounting

Dir., Accounting

Accountant

Sr. Accountant

CAGR: Compound Annual Growth Rate

Accounting Job Family Career Salary Progression

$46,400

$49,600

$59,800

$67,000

$79,100

$94,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

0 1 2 3 4 5 6 7 8 9 10 10+

Years of Experience

Bas

e S

ala

ry

Staff Accountant

Accountant

Sr. Accountant

Mgr., Accounting

Dir., Accounting

Ave Annual Rate

Market Rates

(50%-75%ile)

CAGR = 10.0%

$130,000

CAGR = 6.6%

Entry level Staff Accountant

hired at 50%ile needs annual

salary growth of 10.0% to stay

with market(Assumes mkt growth of 3% annually

w progression to . Director in 10

years.)

50th %ile

The ten-year cost savings is the area

between the cost of External Hires

compared to the career path of an

Internal Staff Accountant

Note: Make sure to select the period which will provide the most accurate forecast. In some cases, a run rate based on

the current or last year is optimal, but in others an average of several years or a custom time period is best to use.

Case Study: Real Estate TrustQuantifying an Appreciating Asset

Engineers

Lack of mobility in first 3 years of

tenure = high turnover

Case Study: Diversified Oil CompanyVisuals with the Right Metrics

Thank you for your interest in this presentation.

View the on-demand webinar or download the full

presentation at:

www.Proformative.com

Engaging, Motivating and Developing Finance

Talent to Deliver Business Value