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27 ISMOR Personnel Cost Modelling Technique 2 nd September 2010

27 ISMOR Personnel Cost Modelling Technique 2 nd September 2010. Steve Pretty, CORDA. Contents. Background RAF Requirement The RAF Personnel Costs Model Analysis Benefits Outcome. Need for personnel analysis: organisation personnel profile.

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27 ISMOR Personnel Cost Modelling Technique 2 nd September 2010

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  1. 27 ISMORPersonnel Cost Modelling Technique2nd September 2010 Steve Pretty, CORDA

  2. Contents • Background • RAF Requirement • The RAF Personnel Costs Model • Analysis • Benefits • Outcome

  3. Need for personnel analysis: organisation personnel profile Organisations require the right personnel profile to function effectively, over time How can we sustain this personnel profile, in the most cost-effective way?

  4. Need for personnel analysis: change in terms & conditions

  5. History Manning Study Established the need for Personnel Modelling Personnel Cost Modelling Approach In-house Personnel Model demonstrator Support to Air Command RAF Personnel Costs Model

  6. Air Command Requirement RAF required a model To help them assess the cost implications of changing how they treat their staff RAF Strategy for People RAF input to SDSR Needed to support three top level questions…

  7. Air Command Requirement • Three top-level questions: • What are the implications to the RAF on the total costs attributable to personnel of changing the way they employ, motivate, recompense and reward people? • Which policies have the biggest impact on managing cost growth while supporting desired force levels? • What are the relative differences in costs between employment models that prioritise retention, and employing people over shorter careers?

  8. Requirements Capture Held a workshop with RAF Personnel Policy staff. Captured: Broad model requirements Key inputs and outputs Personnel data availability

  9. Requirements Capture Refined the requirements through smaller meetings over the next couple of weeks Established The data requirement Acceptance tests

  10. Data collection Data requirements document drawn up and circulated around Air Command at an early stage Baseline dataset compiled from a range of MOD sources DASA 22 Group Air Command sources Simplifying assumptions Job type: assume 7 trade and branch “groupings” 3 career stages for officers; 4 for airmen Constant “rank proportions” for each career stage

  11. The RAF Personnel Costs Model

  12. The RAF Personnel Costs Model • The model… • Is a flexible, “analyst’s tool” • Represents “pools” of people (System Dynamics approach) • Can compare the long-term cost impact of different personnel policies, over time • The model… • Does not simulate the career progression of individuals • Is not a manpower planning tool

  13. Sample analysis – what-if questions Home ownership What would be the overall cost impact of allowing individuals access to the pension lump sum early, to encourage home ownership? What would be the overall cost impact of increasing Long Service Advance of Pay (LSAP) to encourage home ownership?

  14. Sample analysis – what-if questions Length of service What is the impact of a change in length of service on overall cost?

  15. Sample analysis – Pensions what-if question Initial pensions “investment” But estate costs fall Increase in allowances

  16. Sample analysis – comparison with alternate strategy

  17. Outcome RAF Strategy for People Paper endorsed by Air Force Board Model results in annex and summary in main body RAF Career Management Review Currently ongoing Chairman’s Award for Personnel Cost Modelling approach

  18. Benefits The application of dynamic modelling to personnel provides: The ability to compare multiple and diverse personnel strategies • On both a cost and personnel supply basis • Over a period of time (rather than at a fixed point)

  19. Questions? Steve Pretty Senior Analyst CORDA, BAE Systems Tel: +44 (0) 1252 383520 Fax: +44 (0) 1252 383544 steven.pretty@baesystems.com

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