With strategic human resources taking on heightened importance in many organizations, Six Sigma takes on added relevance as a means of adding rigor and better outcomes to the processes that drive the discipline.
Any number of areas under the HR purview entail at least one “critical to quality” characteristic that helps define processes well-suited to Six Sigma methodologies for improvement: Employee turnover rates, job satisfaction issues, management satisfaction and new hire process quality and cycle time among them.
A particularly high priority among savvy businesses is applying Six Sigma to strategic workforce planning. While strategic planning typically focuses on issues like significant capital expenditures, technology and marketing investments, it’s increasingly being recognized that what’s left out is attention to the organization and human resources that will be required for effective execution.
Here’s how two leading corporations used Six Sigma methodologies to help ensure they’d have the right people in the right jobs at the right time for optimal outcomes.
Bank of America: A Six Sigma-led redesign of staffing process
At Bank of America, Six Sigma provided the underlying rigor for an end-to-end revamp of its hiring process. The intent: to reduce sources of “customer” dissatisfaction (customers being candidates, new hires and managers) and improve quality of the process and, thus, the hires.
It started by analyzing feedback from 12,000 customers on the staffing process –ranked by about one-third as fair to very poor. The criteria by which they judged the outcomes included things such as quality of the hire and the time the hiring cycle took. The team then used Six Sigma approaches in analyzing the process as part of its statistical analysis of performance against the criteria. The finding: It took 43 days. But 96% of that time was in waiting. The hiring process itself took only 4%. The team now had the data it needed to identify where improvements could be made and how the outcomes could be tracked.
Reducing variability, a key Six Sigma objective, was a critical objective behind the hiring process redesign. It required a thorough analysis of its recruiting staff’s performance against two main parameters: productivity, or the number of job offers accepted, and cycle time, or how long it took before the job was accepted. From here, core behaviors were identified as being critical to the success of the bank’s top 30 staffers.
A playbook of proven processes was adopted by Bank of America’s global staffing organization to help reduce variations in the hiring process. Other areas, like headcount planning, underwent similar studies to level off variations, which are reviewed as often as monthly to ensure they’re controlled.
Caterpillar: Borrowing Six Sigma engineering tool to help project retirement
Inspired by the Army’s success at mining historical workforce data to more accurately determine when civilian employees would retire, Caterpillar looked for similar ways to improve its retirement forecasting.
One of the tools suggested by a Caterpillar engineer was the Weibull distribution curve. This Six Sigma statistical tool, one of the most often used techniques in reliability engineering, helps project the life expectancy rate of parts based on their cumulative failure rate over time.
In turning it to a different purpose, Caterpillar used retrospective data to compare actual retirements to what was projected through the Weibull distribution curve. When it turned in an accuracy rate of 96.6%, Caterpillar began to employ the tool to project annual retirements through 2020.
Six Sigma approaches have many valuable applications going beyond the manufacturing processes with which it is frequently associated. The investment that businesses have in their human capital makes it critical for HR to find ways to adapt Six Sigma tools and methodologies to their own processes and needs. That’s how they’ll gain workforce efficiencies and a competitive edge for the future.
