The Definitive Guide to Strategic Human Capital Management” provides insight into: The visibility and information needed to proactively manage your business and your talent Keys to recruiting and hiring the best talent Ways to nurture and optimize your existing talent, including best practices in assessing and developing employees Mitigating risks and lost productivity due to employee absence Benefits of developing a high-level view of the health of the company using HCM data and KPIs

1. Whitepaper
Definitive Guide to Strategic
Human Capital Management
Consolidating Strategic HCM
Functionality to Optimize
Your Workforce
In the realm of human capital management, there’s a new wave of thinking
about what it means to be strategic and drive workforce effectiveness. Riding
the leading edge of this wave are the savvy human resources executives, driving
their organizations with a forward-thinking, strategic and integrated approach to
human capital management. This new wave is commonly known as Strategic
Human Capital Management (HCM).
At its core, Strategic HCM enables a whole set of so-called “cross-process”
workflows, such as integrating recruiting and onboarding or pay-for-performance. SumTotal’s end-
They are cross process because they span the classic silos of HR to provide a to-end Strategic
more efficient, effective approach to human capital management. Below are a HCM solution
classic set of these cross-process flows enabled by a Strategic HCM solution enables businesses
and industry examples to which they can apply. to track their
Talent Learning Workforce Payroll
workforces across
All Industries
Management Management Management Management
• Talent development for key strategic competency the needs of the
entire organization,
focus for company
Learning development suggestions and
assignments based on competency gaps
Services Industry increasing the
Incentive compensation based on
• Managing variable pay based on contract
assignments
visibility of budding
Performance and schedule adherence problems and the
Demand driven talent succession, hiring,
Retail Industry efficiency of the
initiatives used to
• Demand driven hiring of employees and contingent
and development plans based on gaps labor based on optimized schedules
Schedule based on employee compliance, solve them.
certifications and/or performance Healthcare / Manufacturing Industries
• Validating certification to operate a machinery before
assigning resource to schedule
Training schedules aligned with work
schedules
Healthcare Industry
• Managing performance based on time spend with
patients and critical shifts
Typical cross-process flows for Industry needs for Strategic HCM
Strategic HCM cross-process flows
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2. Definitive Guide to Strategic Human Capital Management
At the highest level, Strategic HCM enables human resources to effectively
work with executive management to help create and execute the organization’s
strategic goals by providing a single source of truth for all workforce-related
questions. By providing one, unified employee profile across all HCM processes
and making that information easily available for analysis and further correlation
with business data, Strategic HCM solutions provide HR and management a true
strategic planning tool. More importantly, this planning tool is integrated with all the
cross-process HR systems that are needed to tactically execute all HR functions.
Strategic HCM Processes
Transformation
Workforce Strategy & Planning
Perform to Assess to Plan & Schedule
Acquire to
Reward Develop to Pay
Onboard
(Performance (Learning (Workforce
(Recruitment)
Mgmt) Mgmt) Mgmt)
Enablement
Profile & Compliance
Core HR Skills &
Social (Expense,
Record Competencies
Connections Payroll, etc)
Infrastructure
Basic Record HR Transaction ERP Finance &
Keeping Management Project linkage
Tactical HCM
The diagram above demonstrates the relationship between the Strategic HCM
and tactical functions that HR classically executes. This paper focuses on the on
the main transformative solutions that Strategic HCM can provide:
■ A Single Source of Truth
■ Acquire to Optimize
■ Perform to Reward
■ Assess to Develop
■ Plan and Schedule to Pay
■ Closing the Loop
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3. Definitive Guide to Strategic Human Capital Management
A Single Source of Truth – Centralized HR Information
Oftentimes, as an organization grows, the various aspects of human capital
management become the responsibility of disparate systems or groups. One
consequence is that, over time, organizations develop silos of employee
information, with each profile containing only the information required for the
specific function. This can lead to inefficiencies and inconsistencies as changes
fail to propagate completely throughout the company.
Recruiting Profile
Mary Smith
HR Profile
SumTotal’s Integrated Strategic Human Employee Profile
Capital removes the inefficiencies and
Mary Smith inconsistencies of siloed functions and
creates a clean profile with end-to-end,
Payroll Profile
real-time capabilities.
Mary Smith
Mary Smith
Scheduling Profile
Mary Smith
By centralizing these functions in one integrated Strategic HCM solution,
organizations are able to automate and connect all of the HR information.
SumTotal empowers HR managers with the ability to maintain consistency,
ensuring that all necessary parties have access to the same up-to-date
information by managing one central profile for each employee. A centralized
employee profile provides a single source of information on your talent pool’s
information, skills and competencies. The result: providing HR and executives a
closed-loop relationship between business and workforce planning and strategy.
Acquire to Optimize
Hiring a candidate to fill an open role is not the end of the process for a business.
The onboarding process for a new employee is only complete when that person
is satisfactorily productive in a new role. Accomplishing this in a timeframe that
meets business needs often requires this candidate to be appropriately skilled and
motivated, with a solid understanding how his or her actions affect company goals.
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4. Definitive Guide to Strategic Human Capital Management
An essential feature of any complete Strategic Human Capital Management system
is that it must allow HR managers to manage their talent pools proactively. Instead
of only solving problems as they arise, a successful organization must be able to
predict its own needs and act to promote priorities and actions that maximize the
chances of success. With SumTotal Talent Management, managers can keep a
finger on the pulse of their workforces, know an employee’s abilities to achieve
optimal output, and understand employee weaknesses to guide training and hiring.
Bring in the Best - Making changes to your workforce can be risky and expensive,
especially when hiring new employees. Having a complete set of information Nati
Com onal Se
available allows HR managers to quickly and easily identify the best possible pan rvice
Seas y Ramps
candidates for hire or promotion among all those available. ona Up
Case lH
Stu ires dy >>
SumTotal Talent Management can help managers identify gaps in their workforce
and guide them toward candidates who are skilled, trained, motivated and aware
of how their performance drives the entire organization’s success. Combined with
SumTotal Learning Management, organizations can get the best employee for the
Knowing that its most prolific
position on the job quickly and efficiently. time of business comes in the
last quarter of the year, a national
Optimize your Talents - Even given the appropriate information, it’s often far more service company expands its
workforce annually from a core of
efficient to optimize your talent pool than to increase it. Consider a situation in which 4,000 to a peak of 20,000 in a few
an existing resource is dissatisfied with his or her employment and is considering months and then back down. The
company needed a solution to
leaving the company. Meanwhile, in another part of the organization, managers are both find and manage this amount
of talent, particularly because the
struggling to fill a vacant position, and the delay is costly. temporary employees seemed to
keep losing track of their goals and
Without the visibility provided by a fully integrated Strategic HCM solution, the core employees were not effectively
managers may never know that a potential candidate already exists within the able to transfer their knowledge.
These problems not only made the
organization, the source of the employee’s dissatisfaction or that the employee is new hire experience in learning
how things worked extremely
dissatisfied at all. The company stands to lose a valuable resource and is still left arduous and time consuming, but
with the task of bringing on a fully new team member to fill both vacant positions. also tended to create a system
of positional power for those who
did hold that knowledge, which
An integrated Strategic HCM system helps managers approach such issues multi- could diminish the company’s
dimensionally. The visibility into the current workforce ensures that potential internal representatives’ overall ability to
work cohesively toward a goal.
candidates are considered, and the individualized talent profile helps organizations Using SumTotal Talent Management,
prepare employees for advancement. the company was able to develop
and disseminate requisitions for
With SumTotal Strategic HCM, companies can nurture talent and maintain candidates with specific skills. After
the HR department sourced and
morale to limit attrition and prepare for future needs with an actionable leadership filtered these candidates using
guidelines set out by the company
development plan outlined below. and held in SumTotal software, the
company’s priority was to onboard
the new workforce quickly so that
Define Career Goals Develop personalized Perform Gap Analysis the employees were prepared to
• Integrated goal mgmt. training paths • Integrated performance mgmt. meet business needs in a specific
• Integrated employee profile • Integrated learning mgmt. • Integrated competencies timeframe. Instead of having an
• Integrated development
HR department that had to invest
planning too many resources in managing
the bureaucracy that can come
with quintupling the workforce
seasonally, the department is able
to use SumTotal to find and develop
the necessary candidates to have a
Track potential Keep workers Form and enact detailed profitable year.
• Integrated succession planning compensated in line succession plans
• Integrated analytics with performance • Integrated succession planning
• Integrated pay for performance • Integrated analytics
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5. Definitive Guide to Strategic Human Capital Management
2009 State of Global Talent Management
Perform to Reward
Perhaps the greatest measurable benefit in Strategic HCM comes from
the relationship between performance management and compensation
management. These two processes encompass the management, tracking
and execution of the organization’s strategic and tactical business goals, as
well as the management of the organization’s largest controllable expense
and best resource – employees. The result of successfully linking these
processes can drive real results across the business. In fact, SumTotal’s own
external study of over 300 senior-level HR practitioners from around the globe
showed that the integration of performance and compensation management
processes correlated to a measurable reduction in voluntary turnover across
their organizations.
Today, performance management has one the highest rates of automation of
any HR process in organizations across North America and is becoming more
common in other parts of the world as well. The prevalence of automation
has also helped bring about agreed upon standards for goal and competency
management and measurement. As a result, the move from simple “process
enablement” to the more valuable “HR transformation” is in process at many SumTotal’s own external study
of over 300 senior-level HR
organizations today. practitioners from around the
globe showed that the integration
Still, organizations lose the efficacy of perform to reward when their methods of performance and compensation
of planning and executing compensation management are extremely complex management processes
correlated to a measurable
and customized – often done with desktop tools such as spreadsheets and reduction in voluntary turnover
documents. Without centralized management of the process, including a across their organizations.
workflow and business rules engine, compensation management is often
riddled with gaps and inconsistencies. The cost of these issues is high for the
organization – both in financial terms and on employee morale and turnover.
Organizations frequently try to link compensation to performance ratings to
enable a cultural transformation into a high performing organization. This “pay-
for-performance” process often fails when organizations do not provide enough
differentiation in merit and bonus amounts to effect the behavioral changes
required to enable this transformation. When an organization only awards high
performers a percent or two more than low performers, it does not provide the
incentive for low performers to change their behavior or motivate high performers
to continue performing at the highest levels. Best-in-class organizations
implement an integrated performance and compensation management system,
which uses performance ratings to drive pay guidelines. This ensures that high
performers receive a larger share of the merit pool while increases for low
performers are kept to minimum to maintain an appropriate budget.
Assess to Develop
Whether an employee is newly hired or promoted, an effective training program
is essential to minimize the time to productivity. Even existing employees benefit
from continued training on new processes or responsibilities.
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6. Definitive Guide to Strategic Human Capital Management
2009 State of Global Talent Management
With a learning management system like the one integrated into SumTotal’s
Strategic HCM solution, organizations can streamline on-boarding and employ-
ee development.
Assessment Results - A company can assess an employee using a competency
gap analysis for the current or future position, self-assessment, 360-degree
assessment or a comparison of actual to expected or targeted results. Using one
or a combination of assessment results provides a full scope of employee efficacy
in current tasks or readiness for a promotion.
Knowing a workforce’s capabilities provides a variety of benefits. A company
can plan to:
■■ Develop the workforce further
■■ Ensure compliance on training
■■ Keep employees updated on newest product or service offerings
■■ Measure the efficacy of learning initiatives
■■ Make scheduling decisions according to position success
■■ Determine if and when new hires are necessary to fill gaps
Development Plans - Employees are an investment, and the faster they become
productive, the faster the organization sees returns. However, constantly reinventing
the training process for each new resource, or occupying experienced employees
with training tasks and the associated evaluation, increases the initial investment.
Balancing these dynamic expenses can be difficult. Therefore, an effective training
program must be repeatable, systematic, targeted and measurable to appropriately
address the issue.
Whether an employee is in the onboarding process, maintaining compliance or is
being developed into a leadership role, knowledge of their competency gaps, track
records and company best policies are the first step in generating a plan. Integration
of assessment and learning solutions allows for closed-loop development planning,
where training plans are prescribed to leverage the learning catalog to fill identified
knowledge gaps. This enables managers to create plans more quickly and
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7. Definitive Guide to Strategic Human Capital Management
2009 State of Global Talent Management
increases employee engagement. Giving employees the chance to learn new
skills is a large component in keeping an engaged and motivated workforce that
is working toward career development, so taking advantage of a solution that help
a company plan learning milestones will benefit the workforce and the bottom line. How
den
its E Deve
lo
Plan and Schedule to Pay Case mployees ps
St udy
Without visibility into its workforce, an organization cannot optimize its processes >>
and schedules. In order to make the best possible decisions regarding employee
scheduling, a manager must be able to easily access each employee’s details
One of Europe’s most successful
while building the schedule itself. manufacturing companies, Howden
set an aggressive business goal
With intelligent scheduling, the combined power of SumTotal Learning Management to double revenues. To support
this goal, HR determined the
and Workforce Management allows managers to do just that; while creating or company needed to retain and
editing a schedule, managers can quickly pull the centralized employee profile grow its engineering staff. The
HR team presented a business
to find the most appropriate match. By cross-checking employees’ certifications case to executives to show that
an integrated talent management
against the positions being scheduled, the application can prevent employees solution could enable them to
from being assigned to a role they’re not prepared for. These safeguards can be reduce turnover and achieve a
strong return on investment. The
applied to the clock as well, preventing anyone without the proper certifications plan focused on creating a single
solution that would unify employee
from punching in to an inappropriate position. information in one place, creating
a new hire training program and
For example, consider the manufacturing organization that experienced repeated creating a career path program to
instances of employees assigned to jobs they were not certified to complete; help with succession efforts.
The implementation of SumTotal
an inefficient and potentially unsafe situation. The advanced clock technology Performance, Career Development,
provided by SumTotal helped this organization ensure that unqualified employees HRMS and Learning helped to
improve time to competency
are unable to punch into positions they can’t complete, and SumTotal’s intelligent for employees and reduced
turnover costs for Howden. “The
scheduling functionality prevents the employees from being scheduled to such SumTotal solution’s ability to link
tasks to begin with. together all the components of this
program into one system, from
Knowing your Workforce - Whether planned or unplanned, workers are going to new-hire information to scheduling,
e-learning and diverse content
be absent. Employees may need time off for illness, vacation, family care or even management, really helped us
execute this program across the
to pursue their studies on an extended leave. In the past, organizations with a high globe successfully,” said Global HR
population of shift workers may have felt the impact of absences sooner and more Operations Manager David Tough.
directly than organizations with salaried workers, but in today’s environment, where
few resources are tasked with the work of many, worker productivity and business
objectives have leveled that playing field.
When employees are absent from work, organizations face increased risks related
to regulatory compliance, workplace safety, staffing guidelines and business
performance objects. Also, organizations that need to use overtime or temporary
Fast Facts
workers to maintain the same output will feel the effects of diminished margins.
Industry: Manufacturing
From a payroll perspective, there are costs associated with employee absence. For Countries: 17 Countries
example, time entry adjustments may be necessary when an employee takes time Users: 3,800
off, and unless you have an automated solution, adjustments can lead to costly errors. SumTotal Product:
Talent Portal
With SumTotal Workforce Management, organizations can track employee Performance Management
schedules, work times and leave for accurate record keeping. Additionally, the HR Management (HRMS)
Learning Management
system will track deviations from planned attendance, including such activities as
late arrivals, early departures or not working on a scheduled day. These features
will grant managers the time and information they need to keep their workforce
running and help solve issues by clarifying trends.
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8. Definitive Guide to Strategic Human Capital Management
2009 State of Global Talent Management
Closing the Loop Analyst Reviews:
A company that plans to succeed in its goals must focus on activities and initiatives
that support growth and promote the bottom line. While the thought is simple,
knowing what these activities are is another matter, and being able to track
correlation and show hard data on them is harder still. Using a Strategic Workforce
…the broadest and most
Analytics solution to overlay the components that make up Strategic HCM allows a
mature application suite
company to roll up the data into a high-level view of the health of the company, all
in strategic HCM
the way down to a granular examination of initiatives or employees. specialist space.
In addition to seeing what is working well in a company, executives and managers
using Strategic Workforce Analytics can pinpoint problems and discover low-
impact competencies using a combination of internally generated key performance
indicators and external data. Being able to compare common data on a single
dimension instead of piecing the information together across siloed modules means
information is more accurate and accessible for actionable decisions. Strategic SumTotal has established
Workforce Analytics also allows organizations to combine business performance itself as the market share
metrics, like sales and customer satisfaction data, with human capital management and mind share leader…
data on a single dashboard. This combination demonstrates the impact of human
capital management initiatives on business performance data. The closed loop
analytics capability of Strategic HCM enables transformation from tactical progress
reporting to a focus on more strategic initiatives and impacts.
Using a Strategic HCM solution like SumTotal’s means that a company has access
It seems clear to me that
to best-in-class products that create a clear picture of business health and an
the company certainly has
easy roadmap to follow when selecting, developing, motivating and managing a a strong leadership team
workforce. With penetration into more than 50 percent of Fortune 500 companies, and a clear roadmap for
SumTotal has the depth and breadth of expertise to help your company apply the going forward.
benefits of Strategic HCM.
“Most impressive was the
continuity of roles across
each of its applications
– it’s no easy feat to
maintain such consistency.
SumTotal is positioned to
keep growing its portfolio
and gain more customers
thanks to its common
application platform
and architecture, which
provide integration of
applications, processes
and information…In fact
only a few providers have
this breadth and depth”.
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9. Definitive Guide to Strategic Human Capital Management
More Information
For additional information, send an email to connect@sumtotalsystems.com
About SumTotal
SumTotal Systems, Inc. is the global leader in strategic Human Capital Management
(HCM) solutions that provide organizations with a new level of visibility to help make
more informed business decisions and accelerate growth. Recognized by industry
analysts as the most complete solution, SumTotal provides full employee lifecycle
management, including a core system of record, from a single provider for improved
business intelligence. The company offers customers of all sizes and industries the
most flexibility and choice with multiple purchase, configuration, and deployment
options. We have increased the performance of the world’s largest organizations
including Sony Electronics (NYSE: SNE), AstraZeneca (NYSE: AZN [ADR]; London:
AZN), Amway (KUL:AMWAY), Seagate (NYSE: STX), Dell (NASDAQ:DELL), and
Google (NASDAQ:GOOG).
For more information, or to request a demo, please call +1 (866) 768-6825 (US
/ Canada), +1 (352) 264-2800 (international) or visit www.sumtotalsystems.com
Corporate Headquarters EMEA APAC
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