Tim Giehll, CMO Bond-US &Author of Human Capital Supply Chains and

Human Capital Financial Reports

Here’s what you’ll learn in this session:

1. What a Human Capital Supply Chain (HCSC) entails.

2. What Human Capital Financial Reports (HCFR) entail.

3. The benefits a company will experience with HCSC and HCFR.

The recession of 2008/09 gives reason to review the industry:

• 7 million people laid off since November 2008 and unemployment is still at +8%, four years later

• Nearly 14 million people are still unemployed

• Unemployment jumps to 16% if you include Underemployed• Most HR Executives still do NOT have a Board Seat• Some CFOs (Google) are taking over the HR Function

1970s CFO: Financial systems are automated and spreadsheets born.

1980s COO: Manufacturing and Distribution are automated with ERP systems and new JIT processes.

1990s CSO: Sales is automated with CRM systems, but many implementations fail due to poor process re-engineering and bad user interfaces.

2000s CIO: Customer interaction is automated using the internet and content explodes.

2010s CHRO: Decade that Human Capital Supply Chains and Financial Reports streamline and automate the flow of workers.

1970s CFO: Financial systems are automated and spreadsheets born.

1980s COO: Manufacturing and Distribution are automated with ERP systems and new JIT processes.

1990s CSO: Sales is automated with CRM systems, but many implementations fail due to poor process re-engineering and bad user interfaces.

2000s CIO: Customer interaction is automated using the internet and content explodes.

2010s CHRO: Decade that Human Capital Supply Chains and Financial Reports streamline and automate the flow of workers.

1970s CFO: Financial systems are automated and spreadsheets born.

1980s COO: Manufacturing and Distribution are automated with ERP systems and new JIT processes.

1990s CSO: Sales is automated with CRM systems, but many implementations fail due to poor process re-engineering and bad user interfaces.

2000s CIO: Customer interaction is automated using the internet and content explodes.

2010s CHRO: Decade that Human Capital Supply Chains and Financial Reports streamline and automate the flow of workers.

1970s CFO: Financial systems are automated and spreadsheets born.

1980s COO: Manufacturing and Distribution are automated with ERP systems and new JIT processes.

1990s CSO: Sales is automated with CRM systems, but many implementations fail due to poor process re-engineering and bad user interfaces.

2000s CIO: Customer interaction is automated using the internet and content explodes.

2010s CHRO: Decade that Human Capital Supply Chains and Financial Reports streamline and automate the flow of workers.

1970s CFO: Financial systems are automated and spreadsheets born.

1980s COO: Manufacturing and Distribution are automated with ERP systems and new JIT processes.

1990s CSO: Sales is automated with CRM systems, but many implementations fail due to poor process re-engineering and bad user interfaces.

2000s CIO: Customer interaction is automated using the internet and content explodes.

2010s CHRO: Decade that Human Capital Supply Chains and Financial Reports streamline and automate the flow of workers.

• US GDP Forecasted Growth at a SLOW 2-3%

• New Recruiting Complexities as Social Media explodes

• Ongoing Global Mergers and Acquisitions

• Movement to Cloud-based SaaS Solutions

• Demand for Mobile Access 24/7

• Complexities of a Global Workforce

• Starting this year, 10,000 baby boomers will turn 65 every day for the next 19 years. (Source: Pew Research Center)

• In the US, employees eligible for retirement are outnumbering their teenage counterparts for the first time in 60 years. (Source: Time Magazine 2008)

• By 2018, 63% of all jobs will require some postsecondary education. The U.S. will fall short by three million workers with postsecondary degrees. (Source: Georgetown University Center on Education and the Workforce)

• By 2020, the demand for U.S. labor will outstrip supply by almost 18 million people. (Source: ManpowerGroup 2011)

• Current HR systems have been built around a steady state type model – thinking of human resources as “fixed assets“

• This “lifer” model will not work in today's environment

• Need to be able to assess need (demand), deliver resources quickly (supply) and accurately view resources in “real time”.

– this assigns resources as a more

variable cost, rather than fixed cost

– providing more flexibility

• Create systems to manage HR with more people coming in/going out at a faster pace

• Operate with Talent as

inventory vs. a fixed asset

• Optimize Workforce via supply chain management concepts

• Use Human Capital Financial Reports to measure Success

All US Dollars are in BILLIONS

US Non US  Global

Temp Help employed via staffing firms 93 381 474

Internal Part-time & Other Temp Help 89 182 271

 

Independent Contractors (1099)  243 503 746

 

Consultants 79 93  172

               

Total Contingent Worker Spending 504 1,159 1,663  $1.7 Trillion Each Year (40 million workers) (from

Staffing Industry Analysts and Kennedy Information)

Phase 1: Implement a Human Capital Supply Chain strategy:

• Manage human capital as efficiently and scientifically as other supply chains“Think Six Sigma”

• Translate manufacturing and distribution supply chain Best Practices from companieslike Wal-Mart to human capital

• Streamline, optimize and apply integrated technology, just like ERP for manufacturing and CRM for sales

WorkSupplyAcquireOnboardManage

Phase 2: Collect & Report the Data

• Work with your HR team to develop new global Human Capital Financial Reporting (HCFR) for their entire Human Capital spending

• Define Human Capital as ALL full-time, part-time, temps, contractors, consultants and outsourced workers

•Ask your HR executives to present your Boards with new strategic initiatives such as Human Capital Supply Chains and Human Capital Financial Reports

• Include all fulltime, part-time, temps, 1099 contractors and consultants

• Include performance reviews for all five categories of individuals

• New focus on individual skill competencies and related experience, not degrees/titles

• Need the ability for individuals to move between the five categories

• Track Employees “forever”, like Colleges

Help your company see the advantages:

• Finally knowing total spending on all human capital categories

• Understanding Workforce Planning needs in real time (i.e.: Annual Quarterly Monthly Weekly)

• Being in tune with market dynamics enables quick Daily adjustments

• The ability to ramp down a workforce less aggressively or pick up talent without delay

QUOTES:• “The most common challenge reported by all organizations is lack of

appropriate skills within HR to analyze and interpret data”(Inform Metrics Utilization Research)

• “Our job is to innovate, innovate, innovate in everything we’re doing”(Jack Welch, former chariman and CEO GE, 1981-2001)

• “People are our most important asset” (every CEO on Earth)

• “Very few top executives know the true status and costs of their fluid workforce, which is similar to not knowing the cost of inventory” (Jac Fitz-enz, Founder, Saratoga Institute and “father” of HR Metrics)

THE TEST:• # of Full-time employees • # of Part-time employees• # of Temporary workers• # of Contract (1099) workers• # of Consultants• # of Outsourced workers

• Total as of 12/31/20XX = ____________

• Did YOU know all 6 numbers ??? Why Not ???

HCFR is a new worldwide concept being reviewed by the SEC, FASB, SHRM, ISO and global investors.

• It is THE Game Changer!

• Assumes that the Human Capital health of a company is just as important as its Financial Statement health.

• Human Capital Financial Reports can impact a company’s stock price, valuation and future earnings potential.

• GAAP IFRS HCFR

GAAP Features HCFR Features

Industrial economy Knowledge economy

Land, buildings, equipment Talent Management

Local markets Global markets

Long-term employees Short-term, multiple jobs

Primarily full-time employees Blend: FT, PT, temps, contract, consultants

Obsession with Profits Revenue per Worker

Obsession with Stock Price Workforce Flexibility

100% Full-Time 50% Contingent

Executives/Managers Consultants

Professionals Contractors

Associates Temporary/Part-Time

Entire Departments Outsourced Partner

• 4 GAAP Financial Statements = 4 HCFR Human Capital Financial Reports– P&L (Past Period) = R&E (Revenues vs. all Human Capital

Expenses)– Balance Sheet (Specific Date) = Talent Sheet

(Assets = Talent, Liabilities = Risks)– Cash Flow (Use of a Resource) = Human Capital Talent Flow

(Changes in Flow of Talent = Fulltime + Contingent + Non-working) – Financial Ratios (% analysis of the other 3) = Human Capital

Metrics (% analysis of relationships between data)

This is the “window of opportunity” for us to rise up and say:

“We Have A Better Way This Time Around.”

www.HumanCapitalFinancialReports.comwww.HumanCapitalSupplyChains.com

Thank You For Your Time

Tim.Giehll@Bond-US.com(Office) 1-800-456-5660 X4240