0
Improving business performance
through the recession:
Are your systems fit for the future?
Chris Murray
Andrew Knight
13 O...
Agenda


•    What HR systems do you need to deliver your business strategy both
     during and after recession?

•    Wh...
HR technology: the business context

•    CEOs believe access to talent is the most critical component of their long
     ...
Role of HR in the delivering the business strategy

                                       Life & Organisation
          O...
HR technology: key challenges

Compliance and Control
•    How do we make sure we have one way of doing things?
•    What ...
Managing HR costs in the downturn:
shifting focus from survival to longer-term success
     High
     Magnitude of change
...
Talent management




PricewaterhouseCoopers LLP
Talent is a critical driver of long-term success


Access to and retention of key talent
Ability to adapt to change
Streng...
What people strategies are organisations focused on for long-
term success?

Over 50% of CEOs cited the following measures...
How do organisations define talent management?


•    Talent management covers an integrated set of HR functions including...
Reviewing the talent pipeline
                                                            Market Leaders
                 ...
What are the implications for systems?
                    Strategy                                    Solutions          ...
What are the key steps to success?

1. Determine the parameters
      -     Talent for what?
      -     What is ‘Talent M...
Talent management: technology considerations


Short-term survival                   Longer-term success
• Have you enable...
Payroll effectiveness




PricewaterhouseCoopers LLP
Changing times for payroll



•     31% of companies do not know how many of their employees are impacted
      by the £15...
Payroll effectiveness

Common Risks
• Overpayments not recovered
• Non-compliance with FSA or other regulator
• Cost of se...
Example key findings: payroll costs, volume and
 benchmarking



    Payroll Administration *                             ...
Payroll: gaining a competitive advantage

                        Compliance                          Efficiency
 1. Form ...
Payroll effectiveness: technology considerations


Short-term survival                     Longer-term success
• Have you ...
Management information




Are your systems fit for the future   October 2009
PricewaterhouseCoopers LLP                 S...
The CEO’s perspective: the information gap

100%                                         Critical
  90%
  80%
  70%
  60% ...
Linking metrics to strategies




Are your systems fit for the future   October 2009
PricewaterhouseCoopers LLP           ...
Management information: gaining a competitive advantage


Getting the basics right
• Data accuracy, completeness, and clea...
Start small and build for sustained success
                           Scope of typical analytics project can be too narro...
Management information: technology considerations


Short-term survival                        Longer-term success
• How d...
Maximising returns on your HR Technology investment




Are your systems fit for the future                   October 2009...
Maximising returns in HR technology investment


Not just about the implementation itself, but ‘making change stick’:


• ...
Adopting a sustainable approach to change




Are your systems fit for the future         October 2009
PricewaterhouseCoop...
Lessons learned from other organisations…


•    “The benefit of implementing large technology platforms in small countrie...
Summary


•    Organisations are shifting focus from the short-term cost savings to longer-
     term competitive advantag...
Questions?


 Chris Murray                                                  christian.murray@uk.pwc.com
 Andrew Knight    ...
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Improving business performance through the recession: Are your HR systems fit for the future?

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Chris Murray and Andrew Knight, HR Technology Consulting, PricewaterhouseCoopers

Practical advice on using HR technology to deliver business strategy, maximise return on investment and gain competitive advantage as you exit the recession.

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Transcript of "Improving business performance through the recession: Are your HR systems fit for the future?"

  1. 1. Improving business performance through the recession: Are your systems fit for the future? Chris Murray Andrew Knight 13 October 2009 
  2. 2. Agenda • What HR systems do you need to deliver your business strategy both during and after recession? • Where is your organisation today and what should you be doing to get ready to gain competitive advantage as you exit the recession? • How do you maximise the return on your technology investment as you implement improvements? We will explore these themes across three key areas of HR: • Talent management • Access to management information • Payroll effectiveness PricewaterhouseCoopers LLP
  3. 3. HR technology: the business context • CEOs believe access to talent is the most critical component of their long term business strategy (PwC CEO Survey 2009) • Only 30% of CEO’s say they have adequate employee information (PwC CEO Survey 2009) • HR functions spend 70% of their time on traditional HR tasks and transactions, record keeping and delivery services (PwC Saratoga) • Typically, HR accounts for 0.3% of business costs; people costs are 20%- 50% (PwC Saratoga) “Most CEOs stress the need to balance the immediate drive to cut costs and to reduce headcount against the retention of key talent that will help the business capitalise on the recovery when it comes” Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 3
  4. 4. Role of HR in the delivering the business strategy Life & Organisation Organisation & Events Technology is critical in Management managing Compliance improving Efficiency Termination Strategic providing Insight. Planning Technology plays a Time & Recruitment role in improving the Attend & Selection dialogue between HR and the Board. Evidence based Training & Hire & Induction conversations deliver Development impact on the strategy. Performance Compensation Management & Benefits Current State Are your systems fit for the future Desired State October 2009 PricewaterhouseCoopers LLP Slide 4
  5. 5. HR technology: key challenges Compliance and Control • How do we make sure we have one way of doing things? • What are the biggest risks to my HR technology and transformation projects? • How can technology ensure compliance with HMRC / FSA regulation? Efficiency • How do I compare to my industry benchmark? • What is the right mix of technology investment and process improvement? • Is ‘Software as a Service’ right for my business? • How do we provide an optimum and accurate payroll service? Insight and Strategy • What do organisations like us do? How do we compare? • How can I get the information I need in the format I need, and when I need it? • How productive are our people? • How do I track international talent / high performers? Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 5
  6. 6. Managing HR costs in the downturn: shifting focus from survival to longer-term success High Magnitude of change Transform • Align target operating model to business Redesign strategy • Conduct activity • Re-engineer HR analysis and simplify processes under new Reduce process, leveraging service delivery model. best practice. • Re-designed HR • Demand management • Rationalise organisation, (e.g. leverage duplicate/redundant leveraging shared- ESS/MSS) systems services and/or • Rationalise existing outsourcing of non- projects • Review opportunities core services. for outsourcing current Low • Review existing non-core process to supplier contracts remove cost Low Scale of benefit / time to implement High Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 6
  7. 7. Talent management PricewaterhouseCoopers LLP
  8. 8. Talent is a critical driver of long-term success Access to and retention of key talent Ability to adapt to change Strength of your brand and reputation High quality customer service Customer / market intelligence Technological innovation Efficient sourcing / SCM Access to Capital Business partnerships success Corporate responsibility Access to affordable natural resources Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 8
  9. 9. What people strategies are organisations focused on for long- term success? Over 50% of CEOs cited the following measures as important: • Creating a more flexible working environment • Redeploying pivotal employees within the organisation • Creating opportunities for employees to engage in socially responsible activities • Collaborating with networks of external specialists to attract talent • Working with universities to tailor learning to your needs • Hiring and developing talent from a more diverse pool (e.g., retirees, former employees, females etc) • Outsourcing business functions Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 9
  10. 10. How do organisations define talent management? • Talent management covers an integrated set of HR functions including: - workforce planning - talent acquisition (e-recruitment and contingent workforce management) - performance management - career development - succession planning - learning - compensation planning • Talent is referred to under different groupings including: - all staff - top x% as defined by potential, grade, or performance - graduates Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 10
  11. 11. Reviewing the talent pipeline Market Leaders UKFD High performance Business Leaders Client Service High potential DirectorDelivery Technical Leaders Senior Manager People & Networking/ Process Relationship Leadership Building Manager Performance Business GRP Leader 1st 5 years Potential Market Tech Leader Leader Market/ Industry Technical Understanding Excellence Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 11
  12. 12. What are the implications for systems? Strategy Solutions Accelerators Succession HR Business Planning & Talent Resourcing Knowledge Strategy Alignment management campaign Employee Talent Individual Centric CWS Assessment Learning Org design Job design development Value tool propositions Generation Performance Global Virtual Social Reward Benchmarks Differentiation Management Talent pool workplace networks remodelling Total Global Leadership Reward Mobility Infrastructure HR Service Culture Corporate Change Communication Brand Diversity delivery Chemistry responsibility Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 12
  13. 13. What are the key steps to success? 1. Determine the parameters - Talent for what? - What is ‘Talent Management’ in your organisation? 2. Test the underlying data quality - Consistency – applies across systems, geographies, and business units - Existence – appropriate competency structures in place - Relevance – personal development plan (PDP) ratings stored at a level of detail that can be utilised - Accuracy – top rated performers are actually the top performers 3. Evaluate talent - Plot talent performance and talent potential and timeframe - Review HR talent for organisation - Communicate to relevant audience 4. Manage talent - Performance conversations - Succession planning Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 13
  14. 14. Talent management: technology considerations Short-term survival Longer-term success • Have you enabled unused • Is there a defined talent ESS/MSS features to reduce management strategy aligned with administration costs? business strategy? • What are the opportunities for • What does this strategy imply for aligning systems to reduce cost your system road map (e.g. social (e.g. rationalising federated networking, succession planning)? performance management systems)? • Can you access the relevant data (who, what, where)? Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 14
  15. 15. Payroll effectiveness PricewaterhouseCoopers LLP
  16. 16. Changing times for payroll • 31% of companies do not know how many of their employees are impacted by the £150,000 total taxable income limit. Do you? • Are you ready for the 2010 changes in tax legislation relating to the requirements to account for PAYE accurately on a monthly basis? • Are your payroll processes complicated and hard to manage? • Are you paying your staff accurately and on time ? • Can you easily get the information you need to make decisions to be best prepared for recovery from the recession? • Do you know the real cost of your payroll function? Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 16
  17. 17. Payroll effectiveness Common Risks • Overpayments not recovered • Non-compliance with FSA or other regulator • Cost of service is higher than industry benchmark • Real cost of payroll function is not transparent • Quality of service delivery leads to unhappy employees Why act now? • Budget changes effective 2010 • Senior Accounting Officer legislation • Out of date technology / contract - When is it up for renewal? - What are you doing to be prepared for it? Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 17
  18. 18. Example key findings: payroll costs, volume and benchmarking Payroll Administration * Lehman's Financial Services Sample Read on a line-by-line basis Result 25th 50th 75th Headcount per Payroll Administration FTE 1,140 1,156 1,614 2,021 Payroll Administration Costs per Head (£) 65.7 36.1 40.1 60.0 Outsourced Payroll Admin Costs per Head (£) 14.9 0.0 6.7 15.9 Payroll Admin Outsource Rate (%) 22.7 0.0 18.2 28.1 Number of non-base pay elements administered 43 108 146 412 Number of Payrolls in the organisation 10 4 5 12 Payslip Error Rate (%) 0.03 0.06 0.13 0.20 % of over-payments recovered 61.1 45.2 90.0 91.9 Number of different currencies on the payroll (No.) 1 1 1 1 Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 18
  19. 19. Payroll: gaining a competitive advantage Compliance Efficiency 1. Form 42 1. Complexity 2. Expatriates 2. Insight 3. Salary sacrifice & flex arrangements 3. Accuracy 4. Terminations 4. Consolidation 5. Senior Accounting Officer Benefits • Improve payroll service and hence staff morale • Reduce payroll costs by addressing overpayment causes • Improve payroll accuracy • Ensure compliance • Raise payroll efficiency Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 19
  20. 20. Payroll effectiveness: technology considerations Short-term survival Longer-term success • Have you put plans in place to meet • Have you completed an activity 2010 compliance obligations? analysis to identify performance • Do you know your current cost per improvements? payslip and how this compares with • What are the opportunities to your peers? review organisation, sourcing and • Have you reviewed existing supplier system arrangements to reduce terms to identify potential cost costs and improve service levels? savings? • What is your payslip error rate and overpayment value? Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 20
  21. 21. Management information Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 21
  22. 22. The CEO’s perspective: the information gap 100% Critical 90% 80% 70% 60% Information 50% gap 40% 30% 20% Comprehensive 10% Supply 0% Customers Risks Benchmarking Brand Employees Financials R&D Chain Climate Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 22
  23. 23. Linking metrics to strategies Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 23
  24. 24. Management information: gaining a competitive advantage Getting the basics right • Data accuracy, completeness, and cleanliness • Single point of entry for each data item • Reporting on the right information Management reporting • Live reports or Excel wonders? • Dashboards • Interpreting and understanding the information • Benchmarking against peers/competitors • Forecasting Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 24
  25. 25. Start small and build for sustained success Scope of typical analytics project can be too narrow Define metrics Define analytics Define and strategy and systems execute analytics requirements operating and requirements and build distribution plan • Stakeholder assessment • Business and • Analytics team • Business alignment functional organisation design and • Dashboard and report requirements implementation pack definition • Build, test and pilot • Distribution channel • Standards • Implement strategy and implementation / data • Sustain and implementation dictionary improve • Governance strategy and • Data and systems implementation validation/assessment • Training, • Proof of concept communications and change management Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 25
  26. 26. Management information: technology considerations Short-term survival Longer-term success • How do we get the information to • What are the people metrics that report on how much our people cost we should focus on to create long- by region, by business unit, or by term competitive advantage? performance? • Can we use predictive modelling to • Do we have consistent standards improve our business planning? for people information? • Can we unlock our ERP data or • How do we leverage existing should we consider third party information sources most efficiently warehouse solutions? to reduce the cost of generating meaningful MI? Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 26
  27. 27. Maximising returns on your HR Technology investment Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 27
  28. 28. Maximising returns in HR technology investment Not just about the implementation itself, but ‘making change stick’: • Are the business benefits clearly defined and are all your decisions based on these? • Is there the right level of executive sponsorship? • Are there compelling reasons for stakeholders to change? • Is there a clear distinction between global and local? • Are you applying an approach and style that has worked for other successful projects? • Have you tested your readiness for implementation? Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 28
  29. 29. Adopting a sustainable approach to change Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 29
  30. 30. Lessons learned from other organisations… • “The benefit of implementing large technology platforms in small countries or business units is not always clear” • “Consider how a common platform can be supported by common HR shared services for IS processes.” • “Have an informed view on outsourcing HR” • “Develop a clear global governance model for HR IT investment and strategy” • “Assess the effectiveness of your HR organisation and determine whether technology alone will address the issues raised” • “Your HR IT strategy should consider niche applications” • “It’s about information not just enabling HR and self service transactions” Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 30
  31. 31. Summary • Organisations are shifting focus from the short-term cost savings to longer- term competitive advantage in order to be ‘fit for the future’. Areas include: - Appropriate talent retention is vital to enable acceleration out of the recession - Short-term compliance can be used as an opportunity for creating long- term efficiencies (e.g. payroll) - Measurement of the right HR metrics is critical for longer-term decision making • HR technology implementation should be considered in the broader context of transformational change to create sustained success. Are your systems fit for the future October 2009 PricewaterhouseCoopers LLP Slide 31
  32. 32. Questions? Chris Murray christian.murray@uk.pwc.com Andrew Knight andrew.r.knight@uk.pwc.com This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2009 PricewaterhouseCoopers LLP. All rights reserved. 'PricewaterhouseCoopers' refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom) or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. 
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