i4cp Conference Blog

Presentation by Jac Fitz-enz, Ph. D.

The era of measurement is over; the era of analytics has begun. Jac Fitz-enz, PhD., CEO of Human Capital Source Workforce Intelligence Institute, presented his model for human capital management for the 21st century: HCM: 21.

HR professionals continue to talk about becoming strategic, but what do they do to get there? Change can’t occur in a vacuum; there needs to be context. The HCM: 21 model focuses on alignment, integration and predictability. A truly transformed human capital management system cannot rely on lagging indicators such as prior financials. Fitz-enz believes that such benchmarks are passé, as companies are simply too diverse -- even within the same industry -- to provide valid comparisons. Companies need to learn how to focus on leading indicators and intangibles.

The first step to making change is to scan all of the forces that impact the company. These are external forces such as the economy, globalization and customers as well as internal forces such as the brand, vision and competencies of the organization. Once identified, it can be determined how much effect each force has on the company’s structural, relational and human capital. These forces can then be addressed by HR through planning and delivering on hiring, paying, developing and engaging employees.

The next step is alignment. The organization as a whole must transform and realign to meet new needs. The company’s tools, systems, processes, and facilities need to be aligned with the overall vision, culture and brand; personal objectives need to be aligned with corporate goals and linked to pay. The company’s brand should send the same message to employees as it does to customers. Another big part of this alignment is an audit of current processes to determine if they are able to meet future requirements. Assessing and improving hiring, selling, servicing and retention can reduce costs and boost revenue.

The last piece of alignment is workforce planning, which Dr. Jac suggests can be looked at as risk management. Which positions are mission critical? Does the company have a strong benchmark for each of these positions? What would be the impact of a vacated position? Is there an active succession plan? These are some of the questions that can be used to manage risk. According to Dr. Jac, 80% of the positions in the company should be mission critical, which makes planning all the more important.

The third stage of transformation is integration. The silos that exist in the traditional HR model must be destroyed. Each division should be integrated around the employee as a customer, focused on hiring, paying, training, engaging and retaining those customers.

The evaluation of the transformation is where the leading indicators and intangibles come in. The process can’t be measured by yesterday’s operating results such as costs, quantity, time cycles, quality and satisfaction. HR needs to look to the future and evaluate based on aspects such as readiness, leadership, knowledge worker churn, engagement, culture, commitment and brand awareness. HR needs to “predict what will happen tomorrow, not report what happened yesterday.”

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