One of our greatest challenges as Human Resources professionals is to align our functions and initiatives with the business goals of our organization. For corporations and other for-profit organizations, the most important business goal is growing shareholder value. It is not always clear however precisely what drives shareholder value for a particular organization. Changing marketplace trends such as; globalization, talent shortages, technology, and demographic shifts keep us busy. The day-to-day priorities for HR often keep our attention away from the metrics of the enterprise which contribute most to shareholder value.
Fortunately, Deloitte Consulting provides a practical and effective tool for connecting HR initiatives to the bottom line of the organization. I have found Deloitte’s Enterprise Value Map™ for Human Capital v2.0 a great job aid for identifying:
What Drives Shareholder Value
- Key Value Drivers (revenue growth, operating margin, asset efficiency, outside expectations and perceptions)
- Improvement Levers (volume, price realization)
- Improvement Actions (activities aimed at increasing volume, such as bringing in new customers or adding services)
- Dimensions of Human Capital Activities that can influence the three levels of activity above (areas within talent strategies, learning and development, and organizational capabilities)
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Our role is to focus on talent, figure out the right way to get things done, and ensure that our HR initiatives are aligned with our business goals and strategies. The Enterprise Value Map for Human Capital helps us focus on the right business solutions and serves as a graphic reminder of what we are doing and why. The human capital dimensions shown in the map include:
Human Capital Dimensions within the EVM for Human Capital
- Strategic HR Alignment: Alignment of HR/Talent strategies with business strategies
- Learning and Development: Training, coaching, and mentoring of managers and employees
- Performance Management and Improvement: Expectations and standards, tracking and evaluation, feedback and coaching, rewards and recognition, career development
- Workforce Planning, Talent Management, Acquisition and Deployment: Talent supply and demand forecasting, sourcing, recruiting, onboarding, succession management
- Organizational Capability: Structure, culture, knowledge management, HR performance metrics, talent retention, employee relations, job design
- Change Leadership and Transformation: HR implications of major business decisions (mergers and acquisitions, consolidation, outsourcing), adoption of new processes/technology, cultural transformation
- HR Services and Administration: Technology, administration of payroll, health plans, benefits, grievances, compliance
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How Can the EVM for Human Capital help You?
Whether you are developing HR strategic plans, managing HR projects, or providing performance consulting for business clients, the EVM for Human Capital can support you by:
- Helping you identify and execute human capital initiatives that grow shareholder value
- Expressing business objectives and HR solutions in the language of your business clients
- Enabling the development of focused business case justification for your human capital investments
- Graphically showing the intersection between business strategy and HR
- Presenting the contribution of the HR function in quantitative terms
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I have found the map a great performance support tool in my own work, and a valuable resource for training and coaching others on how to align HR solutions with business goals and shareholder value.
How Can You Get a Copy of the Map?
Order a complimentary copy of the EVM for Human Capital.
This post was provided by guest blogger Charlotte F. Hughes, HCS. Charlotte is an expert talent development professional with extensive experience in leadership and organizational development as an advisor to business leaders and HR in multiple industries. In her role as Learning and Development Consultant with Kimberly-Clark she is responsible for helping human resources and business leaders with performance improvement and learning solutions that drive business goals. You can connect with Charlotte on LinkedIn and read more from Charlotte on her TalentFocus Blog.
