Meeting of Minds November 2011 Your people – a question of productivity

1. Meeting of Minds November 2011Your people – a question of productivity Support Function effectiveness: Measuring the impact of Support Functions Human capital: Measuring the Impact of your workforce Advanced measurement • Future • Includes measures in the following categories: • Bringing in the right people • Developing your people • Losing your people • Involving / motivating your people • Measuring the efficiency and effectiveness of Support Functions • Includes measures in the following categories • Delivery model • Activity analysis • Functional capability • Including: • Voice of the customer surveys • Structured interviews • Additional areas of measurement • Talent management • Shared Services • Leadership • Innovation • Sustainability • Current performance • Includes measures in the following categories: • Human capital ROI • Financial productivity • Remuneration • Absence • Turnover • Organisational structure • HR & people risk Benchmarking against local, regional and global comparator organisations PWC

2. Human capital – current performance • Human capital ROI – return on pay • Profit per FTE • Wealth created per FTE – Profit per FTE (less tax and capital charge) • Revenue per FTE • Cost per FTE • Remuneration/revenue PWC

3. Human Capital ROI: The return on workforce investment • Materials Costs • Financing Costs • Facilities and Overhead Costs • Cost of Outsourced activities • Revenue by Business Unit • Revenue by Country/Region • Revenue by Product Line Revenue – Non-wage Costs FTEs x Average Remuneration • FTEs by Business Unit • FTEs by Country/Region • FTEs by Function • Full-time v. Part-time • Temps & Casuals • Contract Workers • Utilisation of Overtime • Management Structure • Excess Absence • Headcount / Recruitment Control • Salaries and Wage levels • Performance Related Pay • Attendance Related Pay • Benefits Structure • Social Costs PWC

4. Human capital – future performance • Bringing in the right people • Recruitment rate • Cost per hire • Recruitment to replace vs. New Positions • Acceptance rate • Time to accept • Number of internal promotions • Rookie ratio – staff with less than 2 years service • Graduate recruitment: retention, costs, returns • Developing your people • Training hours per FTE • Technical vs. developmental training • Cost of training • Learning coverage - proportion of staff receiving training • Delivery of training - in-house vs. external • Involving/motivating your people • Average pay • Average benefits • Performance related pay and overtime • High incentive ratio – % of managers receiving more than double pay/bonus rise • Staff suggestion rate • Absence rate • Cost of absence • Grievance rate • Losing your people • Resignation rate • Involuntary termination rate • Total termination rate • Resignation profile by length of service • Reactive ratio – dismissals rate • Cost of resignations PWC

5. Example Scorecard Metrics: PWC

6. Impact of the RDR on HR practices RDR framework Leadership & Org design Talent Management Performance management and reward APPLICATION ACTIVITY Gap analysis of current reward strategy against both business strategy and emerging regulatory requirements. Recommendations for changes identified Top down skills assessment carried out and gapa analysis against likely requirements under the new business model carried out. Implications of this for training programmes in place identified Gap analysis of current policies and procedures against best practice and guidelines. Key risk areas identified Assessment of current reward strategy against both emerging regulatory requirements (both RDR but also wider FSA policy in remuneration) and the business needs identified in the new business model? What FSA regulations will impact on HR practices both directly through new rules and guidance, but indirectly through changes to the FSA’s general attitude to risk culture and HR practices support that? How are others in your sector changing their HR practices to meet the changing environment? What are the current skills, knowledge and capabilities of employees (especially customer facing employees)? How does this met the regulatory requirements? How does this meet the new business model requirements? What new training and support mechanism s may be required to assist employees in transitioning to any new strategic direction? 1. Reward and recognition 2. Training, knowledge, learning and development 5. External environment What is the current culture with respect to risk and compliance? What understanding do employees have of the changing risk and compliance environment and how this affects their work? 3a. Performance management and objective setting 4. Risk culture Examination of current approach to managing employee performance and the links to reward? 3. Behaviour frameworks Review of performance management approach, its effectiveness in supporting the changes required to the business model. Gap analysis and recommendations for any changes required Review of the current risk and compliance culture. Employees attitude to risk and compliance and implications of this identified Does any current behaviour framework in place align to the needs of the new business model. What new behaviour will be needed of staff in order to make the model successful. Gap analysis of current competency frameworks (if they exist) against top down initial assessment of competencies likely to be required to adapt to the new business model PWC