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Swedbank: Banking on Human Capital Economics
Though many companies talk about managing by the economics of human capital, only a few can boast any significant experience in using it to drive strategy over a sustained period of time. Swedbank, a large retail bank in Sweden serving around 4.5 million
The process began with surveys in every branch and among all employees, measuring such things as leadership, “businessmanship,” competence, internal support, etc. In parallel, Swedbank surveyed its customers on various dimensions measuring satisfaction and value. Both sets of measures were then matched with profitability and other financial measures, such as growth, profit per customer, revenue versus cost ratios, etc. The process yielded insight-producing distributions among all branches based on correlations between human capital resources and market capital, shining light on the performance of individual branches as well as on groups of banks that served particular markets.
The analyses highlighted relative performance of different units and areas for possible intervention. The model is applied by a cross-functional team of HR, market analysts and business controllers working as internal consultants to support and coach business leaders about different ways to improve performance. The model is flexible and provides for “interesting discussions,” said Staffan Ivarsson, deputy director of HR and steward of the Tool of the Future database. He explained, “There are different ways to improve profitability and performance, depending on whether a business unit wants to work more on cost-effectiveness or revenue generation. Ideally one makes progress against both. The key is understanding the economics of the human capital and human interactions and how those can be changed for the better.”
The Next Generation of HR: Whatâ€™s Wrong? Whatâ€™s Right?
May 23rd 1:00pm - 2:00pm CT
2013 CLO Breakfast Club, Boston
September 12th - 12th, 2013The Westin Copley Place
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September 30th - October 2nd, 2013Rancho Las Palmas Resort & Spa
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