These best-in-class practices and trends can help any organization.
HCM has become a boardroom-level topic with overarching organizational implications and impact. In fact, according to an Aberdeen benchmark report, 78 percent of the 245 organizations surveyed worldwide responded that HCM is either a “high” or “top two” organizational priority. The 2007 study found that the overwhelming pressure driving all organizations to focus resources on HCM is “the need to increase the productivity of the company’s workforce.” Furthermore, the majority of all surveyed companies said they plan to impact productivity by aligning the workforce with business objectives.
The role and strategic relevance of enterprise learning and development within HCM became very clear another 2007 Aberdeen benchmark report. In this groundbreaking study — which consisted of survey responses from 687 HR, training and business line management professionals and executives from around the world — the top factor driving organizations to focus on learning and development was the exact same factor forcing organizations to pursue human capital management: To align the workforce with business objectives.
In the latter study, Aberdeen used performance against three key performance indicators (KPI) to distinguish the top 20 percent of all organizations in learning and development (referred to by Aberdeen as “Best-in-Class”):
1.) increase in year-over-year customer satisfaction;
2.) improvement in year-over-year employee performance, defined as percent of goals attained, ratings in job-specific performance reviews, and output and performance of the employee;
3.) decrease in year-over-year workforce turnover.
>> Factors that impact Best-in-Class performance: The ability of Best-in-Class organizations to differentiate themselves by improving year-over-year performance against the critical KPI is staggering. One clear advantage that cannot be understated is that Best-in-Class organizations nearly twice as likely as all other organizations to have a learning and development strategy that is integrated with the organization’s overall strategic plan. In addition, Best-in-Class companies are at least 60 percent more likely than all other organizations to utilize learning and development strategies or programs to make human capital a competitive differentiator (Figure 1).
>> Organizational communication is critical: The increasingly strategic view of human capital makes it vital to ensure communication throughout the organization. Seventy-four percent of Best-in-Class organizations promote learning initiatives and programs to those who can benefit from participating, as compared to approximately one-half of all other organizations. Best-in-Class companies are 46 percent more likely to get HR and training personnel into the business units. This collaboration not only uncovers the specific needs and priorities of the business units but also leads to proactive recommendations on how learning and development can help achieve these objectives.
>> Generational differences require shift in learning and development focus: Aberdeen’s research on learning and development reveals a strong shift in focus that not only reflects the global realities of the dwindling supply of talent (in terms of sheer numbers and skills) and the increasing competition for this talent, but also the diverse career expectations shared among a younger generation of workers. Young talent today understands the value of its skill set and subsequently expects employers to cater to it.
Additionally, this younger generation grew up with technology (i.e. Internet and cell phones) that has become their primary means of not only communicating with each other, but also meeting others and socializing.
Best-in-Class organizations are stepping up their adoption and use of tools that provide a familiar environment from which the “Net” generation can communicate and socialize as well as access learning. Our research also found that 62 percent of Best-in-Class organizations are committed to offering a coaching or mentoring program, which are especially helpful for younger or new employees.
A LOOK AHEAD
The most widely used technologies among Best-in-Class organizations for learning and development purposes focus on the use of Web-based tools for creating efficiencies in the learning and development process, as well as providing a blend of classroom and online education. In fact, 60 percent of Best-in-Class use enrollment and administrative tools, and 58 percent use course scheduling/organization tools and virtual classroom (or Web conferencing) tools.
The planned technology adoption by Best-in-Class organizations, however, illustrates a strategy that relies heavily on prescriptive learning based on identified skills gaps against defined competencies and follows a cycle similar to the following: (1) Define competency frameworks (for positions and levels); (2) Assess against those frameworks to identify and assess gaps; (3) Prescribe a learning path or developmental plan to close or eliminate the gap, and encourage knowledge sharing and workforce collaboration; (4) Track progress against learning plans and/or career development plans via an LMS and/or employee performance management solution; (5) Leverage analytics and succession planning to identify future needs and map against current workforce readiness to pinpoint recruiting and development efforts.
Figure 2 illustrates how several learning and development tools will experience adoption growth upward of 168 percent among Best-in-Class companies within the next six to 18 months.
For organizations to prove and improve the business impact of learning and development:
>> Integrate learning and development strategy with overall organizational strategy. HR and training personnel should meet with the heads of individual business units to better understand the organizational “pain points” and critical business drivers, so they can subsequently correlate how learning and development can help overcome these hurdles. This will also help all of these executives to identify the stakeholders who can benefit from learning and development.
>> Focus first on measuring and improving “soft” metrics; and then move to quantifiable “hard” metrics. Organizations previously unable to improve performance, or that have yet to measure performance of learning and development, should focus first on Donald Kirkpatrick’s Level 1 (reaction) and Level II (learning). Once your company has a process in place to measure and adjust against soft metrics, it should then focus on more quantitative metrics.
>> Identify and eliminate skill gaps. The ability of companies to identify and eliminate potential labor (and skill) gaps, as well as the practice of providing detailed career development paths will not only provide competitive advantage in both pre- and post-hire “talent” initiatives, but also will prove to be a competitive necessity.
>> Offer structured learning programs to more internal stakeholders. Work with individual business unit managers to understand and identify the stakeholders who can benefit from learning and development. Though not everyone requires the same level of investment or number of learning programs, most everyone seeks to make a difference at their job.
>> Promote the successes and ROI that result from learning and development initiatives. Our research found that while 74 percent of Best-in-Class organizations promote learning initiatives to those who should participate, only 49 percent promote the successes and ROI of learning and development to relevant stakeholders. The key is to understand the impact of learning and development and to communicate the ROI using terms/metrics that are specific and relevant to the audience.
>> Integrate learning into pre-hire (recruiting) and post-hire (on boarding or succession planning) practices. A successful strategy can be to showcase learning as a means to attract top talent. A public-facing organizational learning and development program may be why a top candidate chooses your company or selects another one in its place. Once organizations define the competencies required for success in a given position, a focused learning and development program can be the key to permit a prospective candidate to acquire the knowledge and skills required to ascend to that position.
>> Expand learning initiatives to external stakeholders. Organizations that do not offer structured learning to external stakeholders — a group whose mindshare is not dedicated to your company — are making a competitive mistake. Look to create a portal that provides relevant and timely education and/or information to your customers. Also, utilize Webinars to conduct semi-frequent, hardhitting “lunch-and-learns” for your indirect sales organization. In many instances, if these groups are not paying attention to you, they are paying attention to your competitors. Seek to capture their mindshare and become the go-to source for their success.
>> Encourage workforce collaboration and knowledge sharing. Organizations should leverage the expertise within their organizations, as well as connect more easily and conveniently with their stakeholders. Organizations should begin to utilize social networking tools and other informal learning tools to communicate practices that can build-upon internal and external subject matter expertise, as well as promote a feeling of cohesion and camaraderie among colleagues that are geographically dispersed and/or may never communicate in-person. In addition, organizations should provide access to content via multiple methods (from iPods to iPhones, etc.) to engage and appeal to the technology savvy.
Kevin Martin directs Aberdeen Group’s Human Capital Management (HCM) research practice with an eye on technology enabled strategy execution at two levels: workforce management (focused on workforce planning and administration, goal-setting and alignment, analytics and performance as a whole) and talent management (focused on employee acquisition, performance, learning and development, and succession planning). He holds a M.B.A. from Boston University and a B.S. in Business Administration from the University of Dayton. Reach him at firstname.lastname@example.org.
To download research from Aberdeen Group’s HCM practice visit the Website http://www.aberdeen.com/channel/hr.asp.