HR Transformation at Bon Secours David D' Jones, Senior Vice President Human Resources WVU HR CONFER

1
HR Transformation at Bon SecoursDavid D.
Jones, Senior Vice PresidentHuman ResourcesWVU
HR CONFERENCERamada Inn Morgantown, WVNovember
9, 2004
2
Presentation Outline

• Business and Human Capital Challenges at Bon
  Secours
• HR Transformation Model
• Bon Secours New HR Operating Model
• Business Outcomes
• Keys to success

3
About Bon Secours Health System

• Private, not-for-profit health care organization
• Created in 1983 by the Sisters of Bon Secours
• 30,000 employees
• 25 acute care facilities, multiple non-acute
  operations in 9 states
• 2.8 billion in annual revenue

4
Healthcare is an industry in crisis transition

• Mounting reimbursement pressures
• Heavy competition for market share
• Technology reshaping health care delivery
• National labor shortages (especially nursing)
• Regulatory and legislative changes (such as
  HIPAA, staffing ratios)
• to name a few

5
BSHSI also had similar and unique business and
people challenges

• The Business
• Substantial growth through acquisitions
• Financial pressures across the system
• Shifting from local to system business model
• Complicated operating model
• Increasing stakeholder expectations

• Human Capital
• Extremely high labor costs
• Pervasive attraction and retention challenges
• Quality of care issues
• Inability to maintain wage parity
• Lack of leadership bench strength
• Out-of-control benefit costs

6
And the HR function had its own set of challenges

• Decentralized and unable to leverage systemness
• Under-equipped to meet the challenges of the
  business
• Overly focused on administration
• Not regarded as credible, or relevant to business

7
For HR leadership, this meant we had a long road
ahead of us

• Needed to frame an HR transformation process that
  could get sponsorship
• Quantify the people-related issues in financial
  terms
• Build support (and proof) that HR could add
  business value
• Design and execute a process that would address
  these challenges

8
Business design model
9
Project methodology positioned HR as an enabler
of business outcomes
Missionimperatives
Project inputs
New HR Function

• Strategy
• Services
• Programs
• Service Delivery
• Process
• Technology
• Organization
• Talent

• Stakeholder Interviews
• HR Operations Scanner
• Business Impact Modeling
• Benchmark Data

Operating performance
Supports and enables
Employee needs and interests

• Defined current state and future requirements
  through interviews with business leaders,
  employees, and HR staff
• Identified current state HR function and process
  costs and resource allocation
• Conducted Business Impact Modeling to determine
  the human capital requirements needed to achieve
  the organization's financial, operational, and
  quality of care objectives
• Engaged thought leaders to shape the future of HR

9
10
Project inputs Activity based cost analysis
Analysis

• Overall, Bon Secours spends significantly more
  than the trend time
• Delivering HR Services and
• Maintaining Records
• and significantly less time
• Developing Systems,
• Strategic Business Partnering, and
• Compliance and Auditing

Source Center for Effective Organizations,
University of Southern California, 2002
10
11
Liberating the Potential of People

• A system-wide initiative to design and deploy
  excellent HR strategies and services which will

12
Areas of Strategic Emphasis
13
Our HR Key Priorities
Consolidate Health Plan to bring all BSHSI
facilities into Plan for FY05 implementation
Develop system-wide talent management strategy
for leaders

• Develop system-wide RN recruitment strategy in
  partnership with Nursing Collaborative
• Continue to build employee engagement through
  Gallup workplace management program
• Pilot and implement Gallup Selection Research
  Instrument (SRI)

• Implement Lawson Benefits module and create plan
  for implementation of HR/Payroll Suite
• Develop, track and report HR metrics and outcomes
  using Premier Outlook and other system tools

14
4 Elements of Infrastructure
HR operating model
Process Talent Technology Organization
Sourcing
What activities will we do ourselves/have others
do?
Infrastructure
What capabilities are needed to fulfill HRs
strategy?
Governance
How will we lead the function and manage related
investments?
15
Future State Operating Model
Center of Expertise
Payroll
Employee Service Center
Payroll Analyst
Employees
Respond to employee inquiries about payroll and
benefits
Strategic direction and program development
leveraging best practices
Maintain Personal Data, Enroll in Benefits, Apply
for Jobs (Applicants, also)
Lawson Data
Process Payroll
Siemens and Lawson HR/Payroll
Benefits Administration
Reports
Common Performance Measures Across System
Benefits Analyst
Maintain benefit plans, cost rates, enrollment
Local HR Departments
Maintain HRMS Data, Support Recruiting and
Retention, On-Boarding, Benefits Enrollment,
Talent Management
Local Managers
Central Location
Local Systems
Enter Job Requisitions, Process Performance
Reviews, Develop Employees and Leaders
16
Benefits of HR organization design
Overall Benefits
Local-System Operations
HSO
Local VP HR

• Improved operating performance and quality of
  care
• HR strategy aligned with business strategy
• Focus placed on customer
• HR staff liberated, focused on mission-critical
  activities
• Right HR talent in right places
• Role clarity / reduced job overlap and
  fragmentation
• Collaborative, team-driven model
• Standard of HR excellence consistent across all
  Local Systems

• Understanding of business units operations and HR
  needs
• Coaching, advice, and consultation to business
  unit leaders and line management that meets
  business needs
• Effective implementation of HR programs,
  processes, and policies through strong
  collaboration with HSO HR staff liberated,
  focused on mission-critical activities
• Provision of strategic service across Local
  Systems to be explored

• Face-to-face employee contact, high-touch
  customer service to managers and employees
• Efficient processing of high volume transactions
  and routine information requests leveraging
  Lawson HRPayroll
• Provision of admin services across Local Systems
  to be explored

• High-value, deep subject matter expertise in key
  functional areas, e.g., benefits and organization
  development
• Consistent, efficient development of core HR
  programs, processes, and policies
• Leveraging of learnings and best practices
  knowledge
• High level of customer service and value to Local
  Systems
• Centralization of administrative processing

17
Governance The key difference between intent and
results
HR operating model
HR governance is the act of leading the HR
function and managing related investments in
people, processes, technology, benefits, etc., to
Sourcing
What activities will we do ourselves/have others
do?

• optimize performance of human capital assets
• fulfill fiduciary and financial responsibilities
• mitigate enterprise HR risk
• align priorities with those of the business
• enable HR executive decision-making

Infrastructure
What capabilities are needed to fulfill HRs
strategy?
Governance
How will we lead the function and manage related
investments?
18
The Role of The HR Council

• Mission
• Share accountability for aligning HR strategies
  with business and mission goals
• Guide the direction, design, oversight and
  implementation of HR strategies
• Champion and advocate service, quality, value and
  ongoing continuous improvement

• Key responsibilities
• Identify and monitor performance metrics
• Set performance standards
• Represent the interests of Local Systems and
  encourage two way communication
• Manage HR leadership development succession
• Leverage Best Practices
• Champion process improvement

19
RESULTS

• Decreased turnover by 26
• Reduced costs for contractor labor by 50
• Reduced health care costs by approximately 15
  million
• Created national service center for plan
  administration
• Designed effective leadership development and
  succession planning strategies
• Implementing Lawson HRMS enterprise-wide
• Captured hearts and minds

.
20
Keys to success

• Shift from best practice to best fit
• The right talent
• Data to represent a balanced view of qualitative
  and quantitative inputs
• Engagement / ownership of business leadership
• Frequent stakeholder communication
• Governance Council
• Implementation at a pace that the culture can
  accept
• Guts and Courage