can hr standards mitigate risk?
TRANSCRIPT
CAN HR STANDARDS MITIGATE RISK?
Xolani Mawande, COO: SABPP
3rd Annual HR Conference
2 June 2016
@xolani_mawande@SABPP1
Global HR trends• Strategic HR as foundation for HR success
• HR business partner role
• Talent management
• HR Governance – making better and ethican
decisions about people
• HR Risk Management
• HR Technology + social media
• Innovating the HR function and business
• OD focus in HR work – employee engagement
• HR measurement – big data & metrics
• HR competencies and standards
HR Risk Management: It is all about
people factors
Top facts about HR
• Human Capital is the biggest concern for
CEOs (PwC).
• Only 18% of CEOs feel confident that they
have the right people in place to execute
strategy (CEB).
• Human Capital is the biggest risk in
business (HCI Africa).
• Skills crisis is the top obstacle to economic
growth.
• Strikes cost SA R 200 million+ per day.
More facts about HR
• SA losing R12 billion a year due to absenteeism.
• Only 19% auditors feel they use HR optimally (CG
Index – Institute of Internal Auditors)
• Only 5% employees understand business strategy.
• World-wide 13% of employees actively engaged.
• Companies with engaged employees outperform
others by 202% (Dale Carnegie).
• Companies with good HR Practices outperform
others by treating HR as critical business function,
these companies are 105% more profitable.
• Average ROI on wellness programmes: 300%.
HR Professionalism Priorities
What are standards really?
• A level of acceptable quality
• Good enough in terms of professionalism
• What is good or normal or usual
• A guideline for practice
• A foundation for reasonable expectations
and sound judgement
• A framework for managing risk
• A basis for measurement (M&E)
468 HR Leaders developing
HR Standards for South Africa
BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
StrategicHRM
TalentManagement
HR RiskManagement
HR ARCHITECTURE
I
HR VALUE & DELIVERY PLATFORM
Work-force
planning
Learning&
Deve-lopment
Perfor-manceMana-
gement
RewardWell-ness
ERM OD
HR Service Delivery
HR Technology(HRIS)
Prepare
Imple-ment
Review ImproveHR MEASUREMENTHR Audit: Standards & Metrics
H R
C O
M P
E T E N C
I E SSABPP HRM SYSTEM STANDARDS MODEL
Risk / Readiness Profile
HR RISK MANAGEMENT
STANDARD
DEFINITION
HR Risk Management is a systematic
approach of identifying and addressing people
risks (uncertainties and opportunities) that can
either have a positive or negative effect on the
realisation of the objectives of an
organisation.
SABPP (2013)
Do you manage HR risk?
HR Risk Management
OBJECTIVES
3.2.1 To increase the probability and impact of positive events and decrease the
probability and impact of negative events caused by people factors on the
achievement of organisational objectives.
3.2.2 To align HR and people management practices within the governance, risk
and compliance framework and integrated reporting model of the organisation.
3.2.3 To ensure appropriate risk assessment practices and procedures relating to
people factors are embedded within the organisation.
3.2.4 To ensure appropriate risk controls are designed and applied to HR activities
and interventions.
3.2.5 To contribute in creating and sustaining a risk culture in an organisation
which also encourages innovation and creativity.
SABPP (2013)
181 babies died in state hospitals last year.
Human errors, faulty equipment & cover-up by senior medical staff were key factors.
Infection-control nurse retired, and her post not filled.
Critical shortage of nurses & clinical engineers who are responsible for maintaining ventilators.
Senior doctors presented inaccurate stats to their bosses to cover up poor management practices.
Doctors failed to alert DoH to the crisis, even though a few nurses had raised the alarm to management.
Public sector case study
HR RISK MANAGEMENT PROCESS
Assessment of risk tolerance for each risk
Identify and evaluate impact of
HR risks
HR practices, programmes, metrics to
manage risks
HR Risk Map
HR Risk Register
Organisation’s risk management
structures and processes
HR Risk Register
HR Risk Management
Plan
HR Risk Map
MONITOR & EVALUATE
H R R I S K S – 8 African countries
• Safety - accidents
• Skills shortages/gaps
• Incompetence
• Employee disengagement
• Strikes & poor employment relationships
• Fraud/corruption
• Stress
• Staff turnover
• Low staff satisfaction –impact on customer satisfaction
• Cyber security
• Conflict/disputes
• Diversity problems
• Sexual harassment
• Expatriate issues
• Non-compliance
HR Standards Files
13 standards (2013) 19 standards (2014)
HR Professional Practice Standards• Absenteeism management
• Career management
• Coaching & mentoring
• Collective bargaining
• Disciplinary procedure
• Dispute resolution
• Diversity management
• Grievance procedure
• Leadership development
• Learning design
• Learning evaluation
• Learning needs analysis
• On-boarding
• Organisation design
• Performance appraisals
• Recruitment
• Remuneration benchmarking
• Selection
• Succession planning
BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
StrategicHRM 5.0
TalentManagement
4.3
HR RiskManagement
4.1
FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN
HR VALUE & DELIVERY PLATFORM
Work-force
Planning 4.4
Learning5.7
Perfor-mance
5.3
Reward4.7
Well-ness 5.5
ERM5.8
OD4.7
HR Service Delivery
5.6
HR Technology(HRIS) 4.6
Prepare
Imple-ment
Review ImproveMEASURING HR SUCCESS 3.8HR Audit: Standards & Metrics
H R
C O
M P
E T E N C
I E SSELF RATINGS – OVERALL AVERAGE MAY 2016
400responses
BUSINESS STRATEGY – HR BUSINESS ALIGNMENT
StrategicHRM 6.0
TalentManagement
4.8
HR RiskManagement
6.5
FUNCTIONAL & CROSS FUNCTIONAL HR VALUE CHAIN
HR VALUE & DELIVERY PLATFORM
Work-force
Planning 5.8
Learning6.5
Perfor-mance
6.3
Reward6.3
Well-ness6.6
ERM6.6
OD5.7
HR Service Delivery
5.6
HR Technology(HRIS) 5.6
Prepare
Imple-ment
Review ImproveMEASURING HR SUCCESS 4.9HR Audit: Standards & Metrics
H R
C O
M P
E T E N C
I E SAUDIT SCORES – OVERALL AVERAGE MAY 201617 audits
Link to risk
• The HR Risk Standard provides you with the
methodology and steps to identify and
manage people risks.
• Any standard scoring less than 60% in an
audit puts the organisation at risk.
• Build robust risk mitigation strategies in all
underperforming areas.
• Create a culture of continuous improvement.
Value of HR Audits
HR Audits as valuable instrument to mitigate
HR risks and to improve HR impact
Email: [email protected]
Tel: (011) 045 5400
2015 was our first year of HR
Audits
HR Audit - Certification
What the Auditors are looking for?
Positive trend in
results?
Sustainable?
Targets met?
External benchmarks?
Approach vs results?
Quality of
results
Across whole
organisation?
Up and down the
organisation?
Extent of
application
Sound?
Systematic?
Integrated?
Reviewed & updated?
Quality
approach
RATING SCALE TO ASSESS HR
PROBLEMATIC MEDIOCRE EXCELLENT
High Risk Medium Risk Low/no Risk
HR practice is non-existent, has a low uptake or is applied poorly. Little, no or poor results are evident. Requires urgent attention to move to medium risk over short or medium term.
Some pockets of excellence, but they are isolated, and applied inconsistently in certain parts of company. Some occasional positive results comparable to typical average HR standards. Should be addressed before it becomes problematic.
HR leading practice is well infused, aligned and integra-ted across the company and applied consistently with clear results. Comparable to world-class standards. Should be maintained, reinforced or used as a model for other companies.
SUSTAINABLE PERFORMANCE
“Whether a company sustains exceptional performance depends first and foremost on whether it continues to
have the right people in power.”
Can HR Standards mitigate risk?
• The 13 HR standards are positioned as a
risk-based framework to manage your
people risk in organisations.
• The HR Risk standard provides specific
focus on people risks.
• Identify and mitigate your HR risks.
• HR audits can be used as part of the 5 lines
of assurance in accordance with King IV.™
• Apply the HR standards (and HR Risk) and
get your HR function audited.
Conclusion
HR Standards usher in a new period of
institutionalising people management as a
best practice for sound HR professionalism in
organisations. As HR practitioners you are the
specialists who can make this change
successful. Let us build great organisations
with great people and HR functions in driving
our business strategies, while mitigating HR
risks in the process.
We set HR standards!
[email protected] or [email protected]
(Professional Registration)
[email protected] (CEO office)
[email protected] (CEO & Strategy inputs)
[email protected] (COO)
[email protected] (HR Audits)
[email protected] (Knowledge & Innovation)
[email protected] (Learning & Quality)
[email protected] (Events & HR Standards files)
Website: www.sabpp.co.za Blog: hrtoday.me
Office: 8 Sherborne Str, Parktown
Tel: 011 045-5400 Fax: 011 482-4830