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Calculating HC ROI & Productivity Using Employer’s Own Financial Statement Information

Calculating HC ROI & Productivity Using Employer’s Own Financial Statement Information . HR Specialty Products & Services Catalogue Executive Summary A No Frills Distillation of Vendor’s Marketing Collateral Thomas A Ference President & CEO Human Resources Mining & Distribution Co

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Calculating HC ROI & Productivity Using Employer’s Own Financial Statement Information

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  1. Calculating HC ROI & Productivity Using Employer’s Own Financial Statement Information HR Specialty Products & Services Catalogue Executive Summary A No Frills Distillation of Vendor’s Marketing Collateral Thomas A Ference President & CEO Human Resources Mining & Distribution Co Locating, Validating and Accelerating HR  Innovation Office: 219-662-0201 Cell: 630-240-2583 Fax: 219-661-0236 e-mail: tference@hrmdco.com Website: www.hrmdco.com

  2. Other HR metrics are only tactical in that they measure HR “efficiency” which lacks true C-Suite credibility • These 5 years-in-the-development, Wharton School-based strategic level metrics measure HR’s “effectiveness” in contributing to bottom line • Metrics include HR ROI, Productivity and Liquidity • Can be developed for any Business Unit that is supported by segmented financials • Can overlay tactical HR metrics in the areas of Talent, Rewards, Culture and HR Services to determine where HR should focus efforts to improve HR ROI and thereby stakeholder value • ROI for this service will depend on each employer’s facts and circumstances Calculating HC ROI & Productivity Using Employer’s Own Financial Statement Information

  3. Source: Boston Consulting Group Human Capital Investment vs. Financial Capital Investment

  4. HC ROI = EBITDA – Financial Capital Costs Human Capital Investment • HC Productivity = Revenue – Material Costs HC Costs + FC Costs Patented Formulae

  5. HC Productivity vs. ROI by Business Unit

  6. Turning HR Tactics into HR Strategy Human Capital Strategic Priorities High • HIGH/LOW • Appoint an EB NPL & RPLs with accountability and authority • Revise HC investment allocation strategy • Revise & align incentive compensation • Restructure base compensation system • HIGH/HIGH • Develop a new performance management program • Develop a comprehensive professional development program • Create & staff regional “Centers of Excellence” StrategicSignificance • LOW/LOW • Create uniform job descriptions • LOW/HIGH Low Resource Commitment (People, Time and Money)

  7. This product/service is contained in the HR Specialty Products & Services Catalogue™ • Operational level details about this particular service provider can be obtained in conference with the vendor • The HR Mining &Distribution Co. is an independent and contracted representative of the vendor • Upon your request, we will arrange for an introduction that can range from a simple, quick conference call to a services overview / system demo • Tom Ference 219-662-0201 (Chicagoland area) or tference@hrmdco.com • Thank you for your potential interest in this fresh thinking Next Steps

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