Human capital management is all about acquiring, developing, motivating and maintaining that all-important asset: people. But that covers a lot of ground and can mean different things to different departments. For training professionals, it means integrating training functions with HR functions for a more complete picture of how training dollars are spent—and how that can yield great results for the company.
Early efforts at human capital management (HCM) took the form of bringing self-service capabilities to traditionally HR-administered functions, such as allowing employees to update their own W-4 or benefits information. But companies are starting to take HCM further, and they're making employees a part of the process. In many aspects of employee development—performance evaluation, goal setting, competency assessments, skills gap analysis, personal development planning, talent management and leadership development—businesses are creating infrastructures that allow employees to participate more directly. They're also integrating these functions more tightly with training opportunities.
An example of this integration can be found at Convergys, a Cincinnati-based provider of customer care and billing software and services. Employees use the personal development center (PDC) housed on the company's LMS to set their goals. They can initiate a 360-degree competency assessment at any time, and are expected to do so at least once every two years. Based on the competencies associated with an individual employee's position, along with the assessment results, the PDC generates a learning map that shows the employee which courses or learning experiences in the curriculum will help him or her develop desired or required competencies. The employee can also maintain a personal development plan in the LMS, and add material from the learning map or external sources to that plan. In the case of high-potential employees, the organization development department works with their supervisors and uses the LMS to do drill-down assessments on competencies the high potentials must develop. k
"There are a lot of things in our learning catalog that the skills can map to," says Tim Huiting, senior director of organization development at Convergys. "The competencies really provide the link between performance management and the curriculum."
Another example of an HCM system is found at Accenture, a global management consulting and technology services company. Accenture's LMS, myLearning, is linked to the legacy applications that run the company, such as payroll, billing and facilities management. Tom Russo says this integration helps the company track the dollars that flow into training and the return on investment that flows back out. But Russo, associate partner at Accenture, says employees can also use myLearning to set their annual goals.
"Employees can define their development goals, define the training courses that they are going to take to help them achieve those goals, and map the skills," he says.
Deborah Schmidt says it's still the early-adopter stage for HCM systems like these, but the global vice president of human capital management at SAP, an inter-enterprise software supplier headquartered in Walldorf, Germany, also believes that within two to five years, these systems will be critical. And some analysts agree. Stamford, Conn.-based Gartner Group predicts that by 2005, enterprises that combine initiatives for knowledge management, learning and human capital management will deliver higher returns than those who pursue their initiatives separately.
The many intersection points between employee data and development make integration essential for efficiency, says SAP's Schmidt. When hiring someone for a job, Schmidt must understand what the appropriate orientation training program, certification program or training requirements are for that particular position. Over time these requirements change, so she must be able to easily update the profile of the position and simultaneously update the training curriculum or program.
"Once someone attends a training class, I need to record that experience and update their skills for their profiles," Schmidt says. "In the case of certification, it is imperative that I have the most current version of an individual's profile so that I can bill them out and make sure that I'm achieving the maximum return or the highest margin on that particular individual. It's very difficult to do those things at a low cost without a significant amount of integration between training and development or learning management solutions and the HR information system."
Jim Mitnick wanted to know exactly what training he should be offering, to whom and when. As senior vice president for Pittsburgh-based Turner Construction, Mitnick and his department developed a new competency model for Turner. The model divides all jobs at Turner into nine job families, and divides those families into levels—senior management, administrative/clerical, and so on. It also identifies five major competencies, 47 skills that fall under the five competencies, and 15 attributes (qualities which can't be taught, like drive or integrity).
Now, when employees at Turner conduct the online performance evaluation, they are evaluated on their skills and attributes, based on their job family and level. The performance management system links to Turner's LMS, which analyzes employees for skills gaps and links to courses that will help close those gaps.
The system also yields skills gap reports to present a broader picture. Mitnick can tailor the reports to identify skills gaps for an entire level, job family or business unit. He uses those results to make decisions about where to spend his training budget. For example, if a report reveals that all employees in the construction family at level 5 have a communications skills gap, Mitnick knows to include communications training in his training and development plans. "That starts to be powerful, because we're no longer guessing about what's needed," he says. "We're dealing with hard metrics after evaluating 5,000 employees."
For Bob Dean, HCM is a matter of survival. Dean, the CLO at Grant Thornton, a Chicago-based global accounting, tax and business advisory firm, says that without a strong HCM system, his department couldn't sustain the continuous learning culture that's essential to Grant Thornton's success. "We have a cadre of knowledge workers and we need to keep their knowledge fresh, because that's what we're selling to our customers," says Dean. "We need to keep developing the competencies or be able to tap into the right competencies at the right time."
Frequent performance evaluations and a year-end performance review allow Dean to target competency data. Grant Thornton's LMS is searchable by competency, and when development needs or performance areas for improvement are identified during performance evaluations or reviews, an employee and his or her coach can immediately address those skills gaps or career aspirations by searching the LMS for courses to develop the competencies.
"With the fast pace of change we have in business, technology and customers, employees must keep up to speed and develop their competencies more dynamically than they did 10 or 15 years ago," says Dean.
Convergys's Huiting says he's able to target his resources better since his department installed an LMS that integrated performance management with learning management. "Implementing an LMS allowed us to be much more efficient in training administration as well as 360-degree assessments," he says. "They used to be a major undertaking. Now we have to do much less, because it's all self-administered."
Now, many classes have been moved from the classroom to the desktop, Huiting says, and his department can focus its resources on programs that will have the greatest impact: training in front-line supervisor skills, business consulting skills and other needs.
Industry experts suggest that training professionals will be more successful if they work with HR to identify and close knowledge gaps, recruit the right people and improve the selection process using HCM systems. Darryl Carson has put this idea into practice. Carson, the director of education and development at Cypress Semiconductor, a San Jose, Calif.-based supplier of integrated circuits for network infrastructure and access equipment, says that Cypress's competency model links to success profiles, which detail an employee's roles, responsibilities, activities and career development initiatives—including training options—that would enable the employee to advance and plan a career at Cypress. They also include qualities that can't be developed, such as resilience and tenacity, and behaviors associated with those qualities, such as "does not slow down upon encountering obstacles."
These profiles are used in evaluations, but the HR department also uses them in Cypress's hiring process. For example, Carson's group developed a profile of a successful engineer, which is used to select engineering candidates with the greatest chance for success. This way, Carson can put a training plan in place for new hires on day one to help them ramp up faster. "Before we put this system in place, I don't think we really understood what people needed to be trained on in order to be successful," Carson says. "I think we also identified things that we can't train for, that we had to hire for."
The increasing application of HCM is partly a response to economic conditions. Widespread layoffs and budget reductions have left many workforces in the unenviable position of doing the same amount of work with fewer people. Schmidt says these conditions have forced these leaner companies to look inward for what they need.
"In the past couple of years, how many organizations have reorganized or gone through significant head count reductions as well as budget reductions?" asks Schmidt. "As a training professional, it's really imperative that I understand who I have in my organization. In many instances, I'm looking at one person to basically take on another role, because I've eliminated five people and I'm not going to be able to hire any additional people."
Sue Todd says it's going to become imperative for training professionals to align their programs more closely with the needs of the business. "Look at the IT investments companies have made," says Todd, director of strategic market planning at Reston, Va.-based KnowledgePlanet, which designs, builds and operates enterprise-learning systems for global organizations. "They've made humongous investments in technology. And now Gartner is saying that they're seeing a trend where business units are taking back those budgets because the IT departments have been unable to show the real value from all that money spent on technology."
Todd believes that training departments could suffer the same fate. But one way to avoid it might be to start showing the value of the money they've spent. By integrating training and HR into an HCM system, she says, training professionals can hang on to the resources they have and better target the use of those resources.
Justifying the costs of integration can be a challenge, especially when a department is already facing cutbacks. But Accenture's Russo says the company's decision to integrate was driven by two factors: First, since the data was there anyway, there was no reason not to integrate it. Second, he says, integrating all systems into one allowed Accenture to eliminate the separate systems and the need to manually transfer data from one system to another.
Once the decision is made to integrate, the big question is whether to buy an HCM suite or combine existing systems. Turner's Mitnick says that although he considered a suite, it didn't fit his needs. "The difficulty with training today is that so many companies have created so much great content, but it isn't specific to a particular industry," he says. "When you generate a performance evaluation system that has taken you decades to create, to capture the knowledge that you need to train and develop your staff, you just can't go to a PeopleSoft or whatever, off the shelf, and integrate it within your system."
Convergys's Huiting knows there are more options for an integrated suite today than there were when his company was integrating, but he cites cost and customization as reasons to stick with his current solution. "Switching LMSs is a fairly significant cost," he says. "Also, we have quite a few customizations built into our LMS to reflect our terminology and to map some of our processes, and we've built a significant number of add-ons. I don't want to start that all over again."
Accenture's Russo says the decision was based on cost and convenience. "There are certain systems in the firm that, from a cost-benefit perspective, it was easier to build an interface than it was to build a whole new billing system or a whole new talent system," he says. "So we chose to build an interface to existing technology as opposed to rebuilding those applications."
Holly Dolezalek is assistant editor at Training. firstname.lastname@example.org
The HCMS Market: Q and A With Gartner
Avoiding the Pitfalls