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While I consider it vital for all infrastructure and software architects to know the 15 basic business processes, that I will cover in this blog in the coming month, there is one business process more important than the rest. This process is the Hire 2 Retirement or HR process. It is important for two reasons. First it is a process that every architect can identify with and on the other side it also covers all areas of architecture in one or more aspects. For this reason it is the process that I will break up more into detail than the others and explain some off the classical architecture and business pitfalls.
H2R (how Hire to Retire is usually known) breaks down in 5 Level 1 processes. H2R is what we call the Level 0. The Level 1 Processes are Hire, Develop, Retain, Manage and Retire. The Level 1 Hire process that looks after the recruitment and selection of people is then broken down into the following Level 2 Processes: People Strategy, capability profiling, job descriptions, job postings, background checks , compensation and benefit enrolment.
The first process of People Strategy or often just referred as to HCM strategy is all about setting the basics on how your organisation is to operate, such as to decide on the mix between contractors and permanent staff, the setting of pay bands (with or without unions), the manual automation ratio and required investment budgets, the degree to which H2R is done in-house or outsourced and the principal guidelines on human capital investment. The last one is the concept around decisions usually not too widely communicated such as if the company really aims to provide training or to rely on the staff members own ability to train himself, the aimed retention period of a member of staff or the staff utilisation benefit ratio (which means the years that staff will be most productive, as in many industries there is a large fall on productivity after a person employed for over 9 years).
Since this level 2 Process involves very little of architecture input, it is often forgotten even by many Enterprise and business architects, which show how far the architects that claim to have no ICT links are still connected mainly in the ICT world. The other important part that this Level 2 process shows us is that virtually all processes have to start with some strategic setting mode before going into the day to day processes. However that strategic mode is often forgotten as it is done solely by higher management and as such is not noted down with the ultimate challenge that it is forgotten in times of high pressure and also is missing from all other capability and management plans.
Capability profiling is a job done by HCM professionals, not only by some architects, as without a capability profiling there are no architects in the first place. The capability profiling ensures to to create the the as is requirement on staffing levels as well as the to be staffing levels into all specialisations required. This level 2 processes also work hand in hand with others like the cost management level 0 process to determine salary bands on capabilities. Contractor rates however are usually not set in this process as they are accounted against a temporary budget and seen as one off investments. Again there some quite interesting observations on this process as well. The first one is that in virtually all enterprises I know of the capability mapping done by HCM is not used in enterprise architecture or vice versa. This is usually down to hubris in both parts, but in some instances also down to the fact that enterprise architectural capability maps do not cover all areas, whereas those of the H2R have to. The other main observation I have made is that this capability profiling is done with extremely primitive means in terms of ICT, usually in Excel with a bit of a picture application. Again the proper tools are only used by architects that are close to to the ICT part of the organisation.
Job description is a follow up level 2 process from capability profiling and is usually done in an hierarchy. The hierarchy will first try to group all the capabilities into generic groups such as the group of a people manager or a SME manager. then those groups get broken down dinner and finer. The last level is usually left to the division with little or no direct HR involvement. The hierarchical structure is important as on each level certain uniformity parameters can be set. Organisations that are not following this level 2 process or only performing it if they remember, are usually seen as disfunctional or as unorganised by outsiders as they do not follow common patterns. The technology on this level 2 business process is quite simple as it usually only builds on a proper document management system, but the real challenge is often that there are many good meaning administrators around that constantly change the location of the profiles and as such make this process much harder than it needs to be.
The level 2 business process of job posting is done in various ways. The first fork is one internal and/or external posting. Internal jobs are usually posted on the companies intranet and usually need to be timed very accurately as the job posting may reveal changes to the internal structure of the company. The solution to this varies from a manual change or an automatic solution usually in larger global enterprises. Most of such solutions are bespoke developed software. External job postings on the other hand are mainly either handled via professional recruiters or inernally as professional recruiters often come at a large fee and in certain areas do not offer the expertise they are promising. This lack of expertise also often leads to a hybrid model. The collected CVs will then be screened on qualifications and a short list will be created for the interview process.
All this involves a lot of data processing, as job postings will be recorded, posted to different online sites, time lined, set against budget, approved, assessments conducted, scoring methodology and criteria need to be set and finally an own organisation of persons responsible and people helping with the process will need to be recorded and organised. Not seldom in many companies this one level 2 process is all that one group of HR professionals will ever perform. Additionally this level 2 process is also a great place to establish a single integrated software, as you will see that even many enterprises with large expensive ERP systems have no integration on this sub process and as such many non integrated systems with a lot of reentry that usually creates a lot of problems. A classical example is my surname of “Hasselmann” that usually is altered to “Hassleman” after this process or to “Hassellmann” in my last iteration. This may sound trivial, but since all follow up processes such as legal background checks and the set up of email addresses are building on this process a wrong reentry may cause a lot of problems down the line. The job posting process finally ends in the sending of an offer or rejection of candidates. However often this will run in many iterations as job interviews usually go through many stages with and without complex assessments and candidates dropping out of the process while some late starters joining in.
The next level 2 process of background checks is far more simple, but still relies on a sophisticated software package as well. Here it is important that all the relevant information is properly collected, any discrepancies reported (which may restart the last process) and properly audited. This audit aspect is not only important for for later questions, but also for further processing, since the data is often later used by other processes such as the date a health and safety certificate that needs to be renewed every year. Here again only very few organisations will have an integrated system and most professional working on external websites with many agencies and many voice calls with no recordings cannot imagine that an ICT solution can be developed for their needs. This is why it is important in this as well as in similar areas that architects will proactively investigate.
The last level 2 process is that of compensation and benefit enrolment which will mainly affect permanent employees and is often one of the key reasons that some companies are mainly employing contractors. Usually the compensation setup of a contractor is done by registering his company with account payable, while for a permanent staff the process is to set him up on the payroll. Both groups will also pass through a set up process issuing them with a desk, computer, access ID and other necessities that are usually interaction of another process within facility management and a classical example how a HR process in most companies is usually well integrated in the ones by facility management. The reason is that facility management is the one area that has the best and oldest adherence to business standard operational processes. The other part of this process that is that of the benefit enrolment, where in many countries a lot of external parties such as specialist insurers, car dealerships and others are involved. Here you can usually see the classical challenge of having benefits by a limited number of suppliers and on the other hand have the highest flexibility to ensure that the benefit is perceived as a benefit and not as a burden.
The level 1 process of develop that follows the hire process is usually cut into staff orientation, learning, feedback and motivation as level 2 processes. This level 1 process is however often cut short of its potential as many ERP systems only cover certain aspects and push toward clear preferences, such as cutting out motivation and focussing the learning solely on electronic means.
Staff orientation is the a level 2 process that in many organisations only cover an employee handbook and a starter pack, which due to communications are often hard to find unless they are frequently referenced on the intranet as new starters usually do not know where to look. More sophisticated organisations however see staff orientation as an ongoing process covering the changes that a an employee will run through such as a change of location, a promotion or even changes to the company structure. Orientation is also often required by staff that have major changes in their personal lives and many companies are geared to help staff in these areas to ensure ongoing productivity. Most activities in this area however are less driven by ICT means and therefore often overlooked by architects.
The level 2 process of learning is a classical process where a lot of ICT people and architects instantly switch in a solutioning mode before actually looking in the prerequisites. Learning in an enterprise s usually divided into a mandatory and a purely beneficial part. While for the first part of mandatory training computer based training (CBT) with online certification maybe an ideal thing (with the exception of physical trying or training required to be taken at a certified third party) beneficial training that is designed to uncover and release the potential of staff in a certain area is seldom ideally based on a rigid regime, but often requires more individual planning. The classic pitfall in learning is to base the learning only on coursework and the key is to engage with learning professionals instead of vendors of learning software.
Feedback is one of the the worst managed level 2 processes of all time. The key is always to remember that this process needs to be designed to help development. Therefore focussing on the aim is key to execute the process instead of planning to come up with ever more time wasting and intrusive ways to collect information. So once the aim is properly recorded the challenging bit is to develop a process to collect the feedback in a manner that aim and will not hurt the cause, usually with a minimal intrusion level, followed by an analysis that again usually only creates benefit if done on the profile basis rather than through a general reporting schema.
Motivation as a process is only practiced in a minority of organisations, as it is often only initiated when there is a new management drive in that direction usually by an bestseller in this direction or if the customer satisfaction KPI got a major hit. The problem however is that motivation really only work well if it is applied in the long term as it builds on trust or on gain. Gain is a costly way to motivate as its effects are usually only in place as long as the additional benefits are in place. In some areas such as in a commission only payment scheme it is believed that this works for longer, but instead a culture of shortcuts and infighting (it is easier to claim the hard work of a co-worker than to actually do the work yourself) is usually established. Motivational seminars on the other hand usually only work in a trust environment and are often back firing when applied to often or to older more experienced staff. The key to ongoing motivation is usually to work out a specific way to a specific set of circumstances. For example a once a week working from home program with the company paying for the broadband in a company mainly staffed by commuters often creates wonders, while in other circumstances it may prove fatal as the main motivation of staff is to get away from home or the work cannot be performed remotely. The key for an architect here is to listen and help the various stakeholders to a sustainable solution avoiding the usual pitfalls in the process of motivation.
The third level 1 process is that of retaining staff and it is broken down into staff appraisals, reporting and managing results, helping employees to self manage, running a staff feedback program on improvements and listen to concerns. The key problem in this level 1 process is that often most of the measures taken, are not used to retain staff, but instead to increase the power of managerial staff. This can tendency can be best demonstrated in the process of staff appraisals, where the process should result in a happier employee, but where many staff often perceive it as the worst part of the job.
Appraisals usually require the person performing the appraisals to know what the person is doing and therefore the first part of the process is to gather that information. In some areas this might be easy as a manager of a burger bar knows pretty well what the job is about a matrix line manager on the other hand usually only meets with his staff a few times a year with little interaction on the actual work level. The second part of the process is to ensure that the managers doing the appraisals are themselves trained as missing training usually turn an appraisal into a critical debriefing with little or praise. The other main problem in the missing training is that a fifth of all people have real problems to be praised for their work. The key problem of many process implementations of appraisals is also the topic of filing results, as a good appraisal in terms of retaining and motivating staff is often jeopardised by noting down all details and filing them into a database with unclear future use or even worse in creating reports on it. The architecture on this process should therefore be geared towards creating the environment and the data for the process and restraining on any electronic output.
The reporting and management of results as the next level 2 process is a classic example of an activity sometimes performed in a silo, as the performance reporting always needs to be set in the group context instead go focussing to much on the individual. An example is to either show a salesperson a report on going and falling revenue against their customers in isolation to their sales area to identify higher customer care on individual accounts or more ideally to show the same information in the context of the whole team to spark a healthy competition. Especially for architects and the builder of the reporting in this area it is important that this Level 2 process falls under the retaining of staff and therefore needs to empower staff instead of limit it.
Self management or self service of employees has always been a big idea and was used for many business cases. The process as such actually it seldom understood and usually implemented with a lot of flaws that hurt the enterprise more than it benefits it. If implemented wrong it has the tendency to destroy a lot of productivity as staff will either search and try to understand complex procedures with a software that usually expects that the employee still remembers the initial training of a platform he has only used once a yearend/or that employees will constantly check back for updates after leaving calls. The last one actually happens often when payslips are moved from paper to the intranet, as most people will trust a printed payslip, but an on screen message they will constantly query unless it shows a crude static representation of what they are used to. The key therefore in this process is only to enable those parts of self management that are straight forward and always check for a negative impact on productivity on all proposed processes, as the HR business owners usually will mainly concentrate to lower their own expenditure in their area instead of looking at the the overall impact.
Running a staff feedback and improvement program is often one of the most successful activities in retaining employees and gain an additional benefit. Many companies in many countries have actually realised a lot of savings and at the same time empowered and motivated their staff. Implemented in a correct way this process actually creates a positive feedback cycle. When implementing it, it is however important to have technical trained staff to review feedback instead of managerial, never to involve consultants or contractors such as myself in process. This non evolvement of consultants is important as most employees really want to help the company to grow, deliver the best products/services and make money. Once however their feedback is just seen as an input for other people that will then claim credit for their ideas and are not even part of the company the motivation for the feedback usually dies down. Additionally the form of feedback is very important and is usually geared towards the culture of the company, as in a healthy organisation feedback is gathered in an open way with all people handing in their feedback proud of it. However in a dysfunctional company often managed by fear feedback is gathered on an anonymous basis to be able to collect ant at all.
Finally listening is a business business process that is usually undocumented and unsupported, as people will just say that listening will just emerge. The problems here are that listening is a special skill as most people cannot listen for long periods and that not collecting the gathered information in a coherent form often leaves crucial information in the void. Therefore this process needs to be supported by all architects in offering easy to use training for listening techniques and an uncomplicated recording, as the ideas are often forgotten shortly after the conversations take place, so that any tool will need to work on the record it instantly and classify it later perspective.
The Level 1 process of “Manage” that is used to gain greater flexibility while improving efficiencies usually starts with the administration of Payroll and bonuses followed by tax and other administrative fillings, time tracking, benefits and the procurement of benefits, compliance, HR library, pay increase negotiations, succession planning, capability administration, staff certification, disciplinary action, medical mangement and reporting. It is usual the least well locked after level 1 process that often only covers a small fraction of the level 2 processes that I have just described here, as it is often dictated by the HR managers experience instead of best practice.
Payroll is a process that happens in all companies and that is usually well established. Payroll as such can be seen as a level 2 process not only by H2R but also by the R2R process as you can classify as an extension of account payable. Usually in companies with a large element of variable additional payments the payroll is mainly administered in the R2R process with a prep element in HR. The reason for this is usually found in the different tax rates for various ways of enumerations such as fixed payments in lieu off a company car can be rather tricky in many jurisdictions. In organisations where only a salary is paid the financial part of the payroll is only restricted to an IT system with quarterly reviews and updates. It is also important to note that while payroll usually is run on a national level there some countries in Europe where it is necessary to run a different payroll for each member of staffs residence local tax rates, which complicates the process. HR’s main role in this process is about the distribution of associated bonus payments and the coordination of the bonus distribution.
Dependent on the the country you operate the H2R there is the requirement for a number of official fillings. Tax fillings and a filling on reimbursed personal expenses is usually necessary in each country and done by account payable in the R2R process and as such of little concern to the H2R process. However in some countries companies will need a lot of non tax fillings such as on long hours worked, with a penalty for companies that let their staff work too long hours or the number of disabled persons employees with a similar penalty clause. Additional to the official fillings there are also commercial fillings that are are often forgotten when setting up the process and then often result in a lot of additional manual work. Such fillings are often about the renewal of certifications of staff working at clients side that require a constant check on these certifications. Examples can be found in welding, health checks, handling of chemicals and similar activities that are highly regulated.
The level 2 process of time tracking is highly dependent on different areas and whether you are a blue or white collar worker. Usually white collar workers are only included in time tracking if their time is recorded for controlling on intracompany billing or activity based controlling. Another exception is also when their services are directly billed to a client. In these circumstances usually time is recorded in a fraction of an hour against a standard or a level of overtime rate (or weekend rate). Blue collar workers on the other hand are usually always paid per hour and here time keeping gets more important. Since blue collar workers are usually not directly connected with a computer and not always on a fixed site the architect is required to develop the best time tracking solution for the special situations. When doing so always remember to care of special circumstances such as paid shower time, mandatory paid or unpaid rest times and safety check times, as some of these time elements need to be produced at audits in accident investigations.
The level 2 process on benefits is handled quite different from county to country. In some counties such as the UK every resident gets medical services, in others there is a mandatory insurance and in others basic medical insurance is seen as a huge benefit. The same applies for many other benefits such as additional pensions and schooling benefit for dependencies. The important thing for many architects working on global scale is to remember that benefits are very different from country to country. Additional the procurement go benefits that is covered in this level 2 process is also highly diverse. While in a given country the company will buy a certain benefit for all employees from one supplier in other countries the law requires you to hook up with benefit suppliers in each region where the employee lives or that only the individual employee may choose the benefit provider. As many employees are often lost around the red tape of regional laws the process need to cover a point of reference for enquiries.
It is important to understand the difference of the level 2 process on compliance from that of reporting and filling. Compliance in this setting is to adhere to rules that are not enforced or since we are discussing people here rules that are inherit in the value of the organisation. Classic examples are diversity, adherence to a culture of non bullying (even if done by managers) or the right kind of attitude against people with disabilities. All these areas are foremost a concern on the reputation, but also on the core values that shareholders hold up to. Therefore compliance in the H2R process is often far tricker as the are seldom fixed rules and the rules are often changing fast with public opinion swinging for or against areas that just a month were not even discussed. For architects and many engineering orientated professionals this is classic area without clear pre-formulated requirements as the requirements often are shaped what we refer as to society. So when we attempt to offer our services in this area we need to take the ever changing requirements and more important the capture of the requirements than the implementation into consideration when we design this process.
On the other hand the HR library is a straight forward process mainly evolving around a documentation authoring, publishing and management. Here it is is advisable to use a standard solution as the main flaw in this level 2 process is really not to adhere common best practices as the HR library often features in industrial disputes.
Pay increase negotiations again is something that happens very different depending on the type of staff you are looking at. usually you have staff on the minimum wage that will only get pay increases if the minimum wage is heightened, then you have the bulk of workers that are often organised in unions. These negotiations and the implementation of pay increases can be tricky as they need to follow a strict pattern as it can happen in some countries that because union agreements have not been closely followed a damaging strike is called for and even if it is not put in action the damage can be substantial. With unions the pay increases often also include some other befits and improvement in health and safety that this process must ensure to be put in place in the time agreed with the unions. Most architects and some other white collar staff as well as contractors usually act as their own unions in having to ask for more money. However companies that drive on efficiency on an industrialisation of their internal administration costs will usually find it easier to link the salaries of their higher earners to the increases agreed with unions, as an individual pay structure with many additional bonuses and different pay increases complicates the overall payroll. Also it is important to note that most individuals usually want bonuses, while unions want pay increases, as individuals usually follow short term goals , but unions will want the pay is put towards retirement so that their members are still happy 30 years later. All this is important to understand as companies seldom run through the same pattern in this level 2 process.
Succession planning is something often only associated with the top director jobs, but is even more important in other ares. In general there are three areas where a good enterprise will have a succession planning in place. These are jobs where it is hard to find a replacement on the market, jobs with a long handover time or jobs that usually require a lot of long lasting background check, often combined with many classes with specialist certifications. For all those groups a succession planning should be put in place. However it is important usually to restrict this to the timing and the work required. Bad practice on succession planning involves succession plans within an organisation as this usually leads to infighting or worse.
Capability administration is to manage the capability planning from the level 1 process of “Hire”. The ongoing capability management against the direction capability are required to develop as for some capability either a training of existing staff needs to be instigated or as more common a recruitment for people with an additional capability is started. Important for architects is to understand the dynamics against the decision that are build on the cost and eagerness of a new training against the costs of rededicates and new hire. Also it is important for this process to work best to align the capability mapping done in enterprise architecture and that done in future planning in the strategy group with that of the H2R process. Usually this will not happen as all these activities are done in different departments however a good architect can help to save the enterprise a lot of costs and also make the organisation much more agile in response to changes.
Staff certification is a level 2 process only important in certain industries. The most used examples are those in the construction or engineering industry where staff can only perform a certain action with the right certificate and when the certificate is expired the job may no longer be done. So for certain activities in a production process this can be fatal as if for example a piece at the middle of production need to be welded overhead under powder (a really complicated technique) and the person performing this job is one day over qualification the independent quality tester will push all assembly back to that point to be redone even if in the meantime the welder has re certified. Compare with IT this may seem extreme but then it is unlikely that IT systems will be put under the pressure and likely to cost huge numbers of dead and injured when they go wrong. However similar needs arrises on certification in health and safety and plant maintenance. So as a rule of thumb in every industry where faults have a huge impact on life or health this level 2 process is of great importance and the registers on qualifications need to be well integrated as the time on certifications is also likely to change.
Disciplinary action is a level 2 process that is handled very different in many cultures, however it is always aimed at correction. In some cultures this is done by the loss of honour where a high manager may be required to great the lowest workers at the staff entrance with a deep bow. I other cultures it goes hand in hand with a loss in enumeration or a gradual way to termination of employment.So the architect of a global company needs to be aware of the different cultural traits. But regardless of the cultural aspect all actions and all aspects that are leading to one or many of these steps that are usually getting worse need to be documented in a way that will withhold all legal scrutiny as when an employee is served with an ultimate form of disciplinary action he is either very likely to go to court or the press or the relatives will do this if the person is doing himself harm.
Medical management again is a level 2 process that is different in many areas, as a company working with food stuff will have or ought to have much higher criteria than that of an insurance company. In general however medical management will always try to establish a minimum of a medical provision such as a fly shot to ensure that staff are not absent for long times with something that could have easily been avoided. Another aspect of this process goes into the hart of an level 2 or 3 process in IT that of business continuity management, as a medical emergency such as a pandemic is something in the responsibility of the H2R process rather than of a ITIL process in IT.
The last level 2 process of this rather large level 1 process is that of reporting. Reporting in terms of the H2R process concentrates on a group of human resources usually mapped in a capability group and on the individual basis. In this reporting you will see a large synergy with that of controlling and stoma service as they are usually the two sources that the H2R process is using to get the data. Additional sources are the dreaded the employee satisfaction reports that while not seen important by the normal staffer have a huge impact on the standing and renumeration of many levels of management and therefore the process of gathering data in this area will need to be ensured against tampering.
The final level 1 process of “Retire” looks at separation, layoffs, transfers, pensions with investment planning and exit documentation. Separation as opposed to a layoff or a termination of contract occurs without active enforcement. It happens either when a staff decides to move on , both sides agree to a operation or if the fixed time of the employment contract expires. This last is often forgotten and then creates a lot of manual workarounds after the level 2 process is implemented. A separation in terms of the employee asking for it means that in many countries he is not entitled to any unemployment benefit, while a separation on a fixed term will still entitle him to those benefits. This is why it is important to get the filling of all the papers right as a misfiling usually creates an unhappy leaver and voluntary leavers are often the most positive non paid ambassadors on the company in question. The reason is that when I move onwards I want another company to know that I have worked only at great places. usually this process is one that needs to digitalised as it follows strict procedure in every jurisdiction.
With layoffs we have a complete different level 2 process than that of separation as the staff in question is hostile and might go to the courts and/or the press often with damming secrets. This is why outplacement becomes so important here. Outplacement has the benefit that it creates a cooling off period where many are transferred into the separation level 2 process, other will find a new role at the company and those that will face unemployment have time to confront their feelings. This way expensive disruptions such as court cases, some acts of sabotage or the spilling of company secrets to the press are usually avoided. Also all the documents required to authorities can be done while the person is still employed. If the level 2 process is not covering outplacement then the process will need to cover all the contingencies as described and ensure that it has protected its secrets in an appropriate way as well to follow all procedures and their documentation in a perfect way not to caught off guard. So some enterprise have created a hybrid where all those that are likely not to know anything useful and that are paid on a lower scaler a layer off straight away, while others go in outplacement.
Transfers is a level 2 process that becomes important if your company engages a lot in M&A or if you work for some public agencies or educational organisations. The process is usually concerned in transferring staff with all their entitlements to another company. In mergers that are driven by cost reductions the salaries are often cut, however here it is important to follow strict guidelines as employees usually may take such a transfer as a termination and can insists on paid leave for a while. If unions are involved transfers can also turn nasty as unions have good lawyers that will usually spot any deviation. However it is important to note that this level process is an exception, so usually it is missing from the retire process. You will see this kind of potential sub process in many other level 0 processes so this is why I wanted to mention it here as an example.
Pension with or without investment planning is an important level 2 process as it covers the financials of the next 20 – 40 years of a retiring person. Often there are huge amounts at stake here and if the pension involves money on the company pension fund it is also important to give best advise as many a company had to close because of a bad managed pension fund or missing advice for pensioners.
The final final process is exit documentation and is pretty straight forward, as it mainly consists of keeping the company in good respect and getting the contact details if there are any questions. Also especially with pensioners a second round is often scheduled after 6 month to see if the pensioner would consider to work again on a reduced time. This is often very advantageous if the pensioner has worked in an area that requires a lot experience and is hard to cover.
Altogether I find the H2R process represents a good intro in process thinking and also at the aspects likely in other processes, so this is why I believe that it should be known by all architects, also because it is a process where we all participate in.
