New employees

1. Afret Warehouse Supervisor 2. Elias Financial Controller 3. Ratna CSR 4. Ferry Warehouse staff HR 5. TRANFORMATION Maulana Warehouse staff

HR as being in a unique position with the potential to exert possibly the greatest influence on the ability of an organization to achieve a sustainable competitive advance through protection and enhancement of its intangible assets

HR Transformation is defined as a process of recreating or reinventing the HR function-with the specific intent of enhancing HR contribution to the business

WHY REDIFINE ?? OR REINVEINTING ??

CHANGE Technology Globalization Customer expectation Market and Business Demand

DRIVER OF HR TRANSFORMATION
% Part of a broader organization-wide transformation process Response to changes in organization CEO or business leaders mandate for change Leadership changes in the HR function Company-wide cost reduction mandate HR not adding value in its existing role Other 39 24 11 11 6 5 3

PHASE OF HR TRANSFORMATION

Why we do HR transformation ?

What we do get if we do the HR transformation

How we do the HR transformation

Who does it?

Human Capital Dev

Employee Advocate

HR Role

Strategy Partner

Administration Expert

Transactional Transformational

HR TRANSFORMATION

From....To style From administrative to strategy From day- to- day to long term HR has to be and...also Both administrative and strategy

HR AS A SOURCE OF VALUE OR COST

2003 2006

35%

Value
32%

50/5 0

53% 31%

12%

Cost
37%

HR TRANSFORMATION

SHIFTED HR Focus OUTCOME

more than ACTIVITIES

PERCENTAGE OF HR STAFFS PERFORMING HR ACTIVITIES

12%

31% 13%

Delivering HR services Transacting/record keeping Strategic partnering Designing HR programmes or system Compliance/auditing

16%

28%

HR TRANSFORMATION
The aim of HR transformation is to shift the relative amount of time spent on core HR activities towards Consultation, Planning and Strategy

Strategy

Strategy

Planning

Planning

Consultation
Procedures / Compliance

Consultation
Procedures / Compliance
Aministration

Administration

Shifting Tangible Intangible

HR SOURCING
Outsourced In-sourced-provided through a shared service arragement In-sourced-provided through a decentralized model Co-sourced partnership of internal and external provides

Recruitment Remuneration Training Performance2% Payroll

9% 8% 8%

26% 44% 32% 47% 28%

26% 31% 24% 44% 38% 43% 20% 35% 36% 42% 48% 20% 29% 25%

38% 17% 35% 8% 14% 14% 18% 15% 19%

OHS&E Pension Benefits HRIS

7% 26% 14% 8%

REASON FOR HR SEEN AS A STRATEGIC PARTNER

HR builds and/or links data sets to provide enhanced decision support
51%

HR is brought in early to significant business issues/opportunities

52%

HR is expected to help improve labor productivity

58%

HR drives or develops methodologies to drive change in the organization

64%

HR is expected to translate business strategy into a human capital strategy for the business
65%

HR is an active participant when discussing significant business-wide issues

66%

HR is part of a business operations planning

70%

HR and Business Strategy

To be able to play strategic role HR needs to participate in defining the business strategy and to play an instrumental role in translating business strategy into practice

External environment

Business design

Workforce design
Capability selection Employment value proposition Talent economics

HR design

Strategy

Customer selection Customer value proposition Profit model Strategic control

Customer requirements Functional value proposition Cost management Business outcomes

Communication and change management

Scope of activities Managerial structure

Work process
Decision rights Development and knowledge mgmt Rewards

Sourcing HR architecture Governance Technology Process HR talent

Execution

OUTCOME
More talented workforce A Leadership Bench Unified Culture More efficient Organization

OUTCOME OF HR INITIATIVES AND ACHIEVEMENT

Achieved
Better HR Service delivery 26% Better HR info 23% Reduce administration time 22% HR need to support business decision making Improve customer satisfaction 20% Self-service for managers 17% 17% 22% 19% 26% 26% 26% 31%

Driver

High quality support tools for key HR processes 11% 16% Reduce cost 11% 15%

Corporate driven technology change that affected HR 0% 10% An improved HR to employee ratio 8% 9%

TOP HR CHALLANGE
Acquiring and retaining key talent Driving cultural and behavioural change in the organisation Building leadership capability Increasing workforce productivity Increasing line manager capability to handle peoplemanagement responsibilities Placing constraints on headcount (making do with less) Implementing people changes resulting from changes due to operational performance Implementing overall human capital costs Reducing overall human capital costs

% of participants 60% 44% 30% 24% 21% 19% 19% 13% 11%

What is the Barrier of HR Transformation

HR is to busy or lacks decision making power Weak HR transformation technology

Skills and Capabilities or HR Staff

Negative Business Perception of HR Insufficient capability of line managers Weak HR and business leadership

AREA OF HR TRANFORMATION
HR STRUCTURE HR TECHNOLOGY HR PROCESSES HR SKILSS & CAPABILITIES

HR STRUCTURE

Simplify the processes and reduced cost of dayto-day- operation

Increase the expertise

Better alignment of business partners requirement

HR STRUCTURE
HR business partner reporting to business leader
47%

HR controllers

48%

Separate HR function within business units

55%

HR service center (SSC)

57%

HR implementation specialist
63%

HR business partner reporting to HR

64%

HR center of excellence
65%

HR TECHNOLOGY

To improve HR service delivery To reduce time spent on HR transaction

To Increase accessibility of HR information and data

80% 70%
69%

60% % respondents 50%

49%

40% 30% 20% 10%

46% 42% 37% 34% 33%

8%

0%

HR PROCESSES
To ensure the effectiveness execution of its plan and strategy

INITIATIVE UNDERTAKEN DURING HR TRANSFORMATION

Assessment of HR customers' Implementation of a new HR organisational Audit of current HRIS technology Assessment of HR function effectiveness Design of a new strategy for delivering HR Evaluation/implementation of new HRIS Redesign of HR work processes Decentralisation of selected programmes in 41% 29% 28% 24% 21% 21% 23% 34% 60% 46% 50% 43% 43% 43% 32% 40% 37% 13%

46% 11% 25% 17% 80% 9% 25% 61% 11% 42% 19% 56%

Talent development strategy for improving

Outsource any part of the HR function Strategy for attraction/retention of the HR staff Changes in reward strategy for HR staff

20%
14% 29%

38%

42%
57%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Completed Planning to complete in the next 12 months Not under consideration for the next 12 months

HR SKILLS & CAPABILITIES

People Management Skills

Organization Development skills

Business and Operational skills

SKILLS TEND TO BE AS A STRONG

Functional HR experience Interpersonal skills Interviewing and assessment Team skills Record keeping/ data maintenance Customer service
0% 20% 53% 39% 8%

52%

41% 7%

49%

36%

15%

49%

41%

10%

46%

46%

8%

41% 40% 60%

43% 80%

16% 100%

Strong/very strong

Sufficient

Weak/very weak

SKILLS WITHIN HR TEAM TO BE VIEWED AS WEAK

Business strategy skills
55% 50% 48% 44% 43% 43% 40% 39% 39% 39% 38% 35% 42% 45% 42% 47% 45% 36% 9%

Financial skills
Cross-functional expertise Cost analysis and measurement

43% 7% 42% 10% 40% 40% 42% 16% 17% 15%

Organisational assessment /
HRIS data analysis and reporting Vendor management Cultural change / transformation Process management / process Change management Project management Business understanding

49% 11% 19% 16% 19% 15% 20%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Weak/very weak Sufficient Strong/very strong

How do you measure the effectiveness of the HR function? HR customer satisfaction HR cost HR staff/employee ratio HR programme effectiveness Line manager effectiveness as people managers Impact on business operations/outcomes Processes in place to lead/facilitate organiZational change HR operational measures Increased customer usage of HR staff for more strategic interventions (rather than using external providers or building capability outside of HR)

Workforce productivity Shift in staff time spent to higher value-added activities No specific measures Other

Be HR Professional Be HR Champion

alfons.djawa@conbear.com

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