Weekly Insight - July 26, 2010

Maximize Training Resources and Show ROI

A recent survey by McKinsey & Company found that 90% of firms say that building employee capabilities is one of their top-ten priorities. However, only one quarter of them said that they are effective at improving performance measurably, and only 8% track their training program ROI. For being a top-ten priority, the lack of performance measurement and ROI is a significant issue.

HR leaders can address this issue by taking a more disciplined and systematic approach to training. Through benchmarking employee capabilities and performance, both externally and internally among business units, HR can determine not only which skills and capabilities are lacking but also which ones are linked to performance. Training programs can be created to address those needs, and then by tracking the organization's performance prior to training as well as after, an ROI can be determined.

The critical aspects are to link training to needs that are proven to drive organizational success, and measure performance before and after training. This targeted approach will make the most of available resources as well as show the effectiveness of the training program. One organization in the survey took this approach found that their training program had a 400% ROI – every $1 in training resulted in $4 of additional revenue for the firm.

Resourcing and Outsourcing

Many companies outsource some of their HRIS processes. While this is often a good strategy, it never eliminates all the work or risk associated with a given process. To reduce the amount of work that remains, consider how you would handle the following four areas:

• Technical Staffing: How much effort will you need to put into maintaining the technical integration and interfacing from SAP HR to the outsourcing provider? There is always some effort there, it varies based on how well the interfacing and integration was done in the first place.
• Governance: Who is going to be in charge of defining and monitoring the SLA (Service Level Agreement)? Who is responsible for issue resolution? Who will monitor the outsourcing provider to make sure you are taking advantage of all they have to offer, and to monitor their overall health and direction?
• Transition Costs: How much effort will you have to spend for creating the interfaces and integration with the provider's system? Which business processes will be affected, and who is going to redesign them? How will the outsourcing affect internal reporting, since some data won't be stored in SAP HR now, and how will that be managed?
• Organizational Change: As you outsource work, how will jobs be redesigned and/or eliminated? How will you handle cases where only part of a job is outsourced?

Steve Bogner, Managing Partner
www.insightcp.com

This newsletter can also be viewed online.

You are subscribed to the Weekly Insight newsletter by Insight Consulting Partners (http://www.insightcp.com/)

To subscribe to this newsletter use the following link: Subscribe
To unsubscribe to the newsletter use this link: Unsubscribe

Registered users can also login to maintain their subscriptions.