human capital management - june 2004

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HUMAN CAPITAL MANAGEMENT

Presented at the

22 nd Annual Caribbean Conference of Accountants

St. Lucia – June 2004

L. Anthony Watkins

CEO / Principal Consultant

ODYSSEY CONSULTinc

[email protected]

www.odysseyconsultinc.com

mailto:[email protected]

mailto:[email protected]



Human Capital Management –

What it is

Human Capital = The sum of a workforce‟s skills, knowledge and

experience

Human Capital Management =

A strategic responsibility increasingly shared by all an organisation‟s leaders

A strategic approach to marshalling, managing and maintaining the human capital needed to maximise organisational performance.



H C M Cornerstones

Leadership Commitment to HCM

Role of HC Function

Strategic Human Capital Planning Integration and Alignment

Data-driven HC Decisions

Acquiring, Developing and Retaining Talent Targeted Investment in People

HC approaches tailored to meet organisational needs

Results-oriented Organisational Cultures Empowerment and Inclusiveness

Performance linked to organisatioanl goals



H C M – Fundamental Principles

People are assets whose value can be enhanced through investment. The goal is to maximise value while managing risk.

An organisation‟s Human Capital approachesshould be designed, implemented and assessed by the standard of how well they help the organisation achieve results and pursue its mission

Source: United States General Accounting Office – March 2002



So What is Different??

No longer the sole province of the HR Function Increasing shift from “talk” to “walk” for all

disciplines

HR traditionally seen as a cost centre but is

increasingly being seen as a strategic partner The business realities:

Collaboration and teamwork at Executive Levels in organisations

Collective input to Corporate Strategy at senior levels Increasing multidisciplinary exposure

The push towards „value- added‟



Some Recent Findings

36% revenue spent on Human Capital Expenses but only 16% express anything more than a moderate understanding of RO(HC)I

CFO‟s see HC as a key Value Driver

92% link it to Customer Satisfaction 82% link it to Profitability

72% link it to Innovation and New Product Development

49% report that investors are beginning to ask about

HC issues 23% report Boards involved in HC issues

In two years 36% expect such involvement



Some General ChallengesPersist Few (38%) explicitly consider Human Capital Value

when making layoff decisions

Measuring and quantifying the Human Capital Value

remains an intractable issue

HR information technology appears to have not delivered as much as expected in terms of helping to manage and quantify Human Capital issues

Source: © 2004 Mercer Human Resource Consulting LLC - www.mercerhr.com



HCM in Context – evolving realities

Economics, Development and Migration Appeal of the metropole

World-view

Uneven rates of development (intra-regional and sectoral)

Crime

Social Unrest

Production of Human Capital Our History

Our educational systems

Elitist? or Mass Production? Relevance

Quality

Techno-colonisation, attitudes and expectations



HCM in Context – evolving realities

DISEASE / PANDEMICS / HIV-AIDS Loss of productive capacity

the dead

the living

Cost of care

Individual National (allocation of resources)

Impact on the young human capital (orphans)

Replacement costs

FTAA and CSME

Mobility

Competition for scarce resources (loss and cost)



Imperatives for Action at all levels

Regional National

Professional Discipline

Organisational Managerial

Individual – Family

HCM is a societal issue manifesting itself and creating a mandate for action in all spheres



Revisiting HCM Cornerstones

Leadership Commitment to HCM

Role of the HC Function

The ODYSSEY CONSULTinc perspective on Leadership:

The process of influencing self, others and organisations through growth and change towards

achieving results and fulfilling a vision or purpose




Strategic Human Capital Planning Integration and Alignment

Data-drive Human Capital Decisions

Staying alert and constantly checking

Utilising a Strategic Thinking Framework

What‟s happening? (exploring perspectives) What does it mean? (discerning significance)

What might we do? (envisioning possibilities)




Acquiring, Developing, Retaining Talent Targeted investment in people

HC approaches tailored to meet organisational needs

Conversations about “win- win” development

Profitability of the “human spirit”

Creative action at critical leverage points Identifying key issues

Connecting with “touchstone” people




Results-Oriented Organisational Cultures Empowerment and Inclusiveness

Performance linked to goals

Creating Architecture

Freedom within Frameworks

Expectations and consequences

Empowerment

Choice

Competence

Meaningfulness

Progress



The Way Forward

Let us take our professional leadershipresponsibility, guided by our personalunderstanding and commitment and

make a difference in the way we manageour Human Capital across the region!!Our future, our organisations, our people

need our action!!



Play On !!!



ODYSSEY CONSULTinc

Limited

… BEYOND BUSINESS …

human capital management - june 2004

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