Using Lean Six Sigma to Create HR Bandwidth

HR leaders are continually looking to accomplish more with less, especially with the wave of experienced HR professionals leaving the workforce. Companies are finding success using basic Lean Six Sigma principles to create bandwidth.

Recent anecdotal accounts related to the struggle to find strong HR talent are backed up by statistics. According to the U.S. Bureau of Labor Statistics, jobs categorized under Human Resources Manager will grow 9% by 2026, which is 2% greater than the average projected growth of all jobs in the U.S.

But there is also a projected decline in labor force participation for all workers (age 16 and over) from its historical peak of 67.1% in 2000 to its projected decline of 61.0% in 2026.  It’s clear that HR and benefits departments will be challenged to find the resources necessary to meet business objectives.

“Our clients are asking the questions – how can we be more efficient, more responsive, more effective and deliver more value to our business without adding to staff?” says Nancy Pokorny, a Principal with Findley.  “It’s a perfect time to review people, process and technologies,” added Pokorny who is a Lean Six Sigma Black Belt.

In fact, one Findley client recently gained 112 hours of bandwidth (on a single project) using the Lean Six Sigma DMAIC approach to identify opportunities for process improvement and automation. That’s nearly three solid weeks of one person’s time that could be reallocated to more strategic endeavors.

Pokorny cautions that there is an art to utilizing Lean Six Sigma principles and tools to optimize HR impact and efficiency, and it’s important to avoid creating a process that is overly engineered and unnecessarily complex.

“The key is to focus on using the tools that get to the heart of the matter quickly such as DMAIC, Ishikawa (Fishbone) Diagram, Root Cause Analysis and Failure Modes and Effects Analysis (FMEA),” shared Pokorny. “Simpler is better, and the Lean mindset can provide a concise way to organize information and identify potential solutions. Organizations can then develop more efficient in-sourced or out-sourced solutions, which can help to alleviate the talent gap.”

For detailed information on how one company improved bandwidth using Lean Six Sigma, view the Findley Proof case study.

Questions? Contact the Findley consultant you normally work with, or contact Nancy Pokorny at nancy.pokorny@findley.com or 216.875.1939.

Posted August 21, 2018

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Using Lean Six Sigma to Optimize Short-Term Incentive Plan Administration

Challenge

A global manufacturing company with 15,000 employees operating from 30 countries wanted to optimize its Short-Term Incentive Plan (STIP) process, which required an estimated 120 hours per year to complete at the corporate level. The Lean Six Sigma DMAIC approach and various Lean tools were used to greatly improve quality and decrease administration and reporting time.

The global compensation team was responsible for:

  • Setting plan metrics and targets for 80 complex STIPs across multiple countries
  • Coordinating with 20 local controllers worldwide who are responsible for calculating and inputting the quarterly metric results
  • Reviewing quarterly results with the local controllers
  • Creating PowerPoint reports 3 times a year to review with the C-suite

The company was looking for a way to preserve quality and reduce administration time so they could focus more on the business results and implications.

Identifying the Root Cause(s) to be Addressed

We used the Lean Six Sigma Ishikawa (Fishbone) Diagram to identify the root cause of the extensive process timeline.  We looked at the following:

  • Commitment – There was no issue with the commitment of controllers, plant managers and supervisors to uphold their end of the process.
  • Knowledge –In general, controllers, plant managers and supervisors understood the key criteria in the short-term incentive plans.
  • Timing – While timing was tight, it was tied to the release of financial information, which was on a strict schedule.
  • Process – We identified several manual steps in the process that could be automated and made error-proof.

Solution

Working with the company’s global compensation team, Findley developed an automated tool to:

  • Set and input plan metrics and targets in a single platform
  • Automatically generate reports to review plan design and results
  • Have the ability to readily add or remove plans
  • Accommodate multiple plan design features (multipliers, add-ons, circuit breakers, etc.)

Results

The time requirement to administer the STIPs was reduced from 120 hours to 8 hours annually, and we used an abbreviated FMEA process to produce greater consistency and reduce errors in data entry.

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