Leveraging Human Capital in a Shared Services Environment

1

Leveraging Human Capital in a Leveraging Human Capital in a Shared Services EnvironmentShared Services Environment

Karla Timmons Senior Advisor – HR Connect U.S. Department of the Treasury Office of the Chief Information Officer HR Connect Program Office [email protected]

Session Objectives

HR Metrics case study at U.S. Treasury HR LoBMission and goalsDirection and guiding principlesLessons learned

Metrics as an enabler for HR Transformation

Share insight on how government is changing

About TreasuryMission: “Serve the American people and strengthen national security by managing the U.S. Government’s finances effectively, promoting economic growth and stability and ensuring the safety, soundness and security of U.S. and international financial systems.” – Strategic Plan FY 2007-2012One of the for original departments of government established by the First Session of Congress in 178912 major components – Departmental Offices and 11 operating bureaus

Bureau of Public Debt Financial Management Service

Internal Revenue Service Office of Comptroller of the Currency

Office of Thrift Supervision Bureau of Engraving & Printing

U.S. Mint Alcohol & Tobacco Tax & Trade Bureau

Financial Crimes Enforcement Network

Office of the Inspector General

Treasury Inspector General for Tax Administration

HR LoB Provider of ChoiceTreasury is one of nine OPM-approved (5 Federal, 4 Private) HR LoB Shared Service Centers (SSC)

Competitive marketplace environmentMixed Life Cycle (Development and Maintenance)

Executive Sponsor Chief Human Capital Officer for Treasury

Enables Human Capital operational and strategic needs for:

All of TreasuryDepartment of Justice - Alcohol Tobacco and FirearmsDepartment of Homeland Security - US Secret ServiceDepartment of Housing and Urban Development

Major PartnersPublic and Private sector

Serves the human resources needs of 145,139 employees

What Is An HRLoB Shared Service Center (SSC) and Why Use it?Central point delivering products and services supporting the human resources life cycle end-to-end processFederalized HR products and services for

Human Capital StrategyOrganization and Position ManagementStaff AcquisitionEmployee Development and Performance ManagementCompensation ManagementHR DevelopmentEmployee and Labor RelationsSeparation Management

Governance structureCertified by Office of Personnel Management (OPM)Transforms delivery of HR services providing enterprise-wide efficienciesBusiness intelligence

Human Capital strategy and accountabilityMeaningful performance metrics to illuminate past performanceDecision support to guide future management actions and HR policy

Treasury’s HR LoB Shared Service Center Products and Services

Feature rich offerings include these products and services:Awards Administration Mass ProcessingSeparation/Clearance Management Drug Test TrackingEmployee Relations Labor RelationsWorkers’ CompensationManage and Tracking HR InitiativesHelp Desk SupportFAIR Act ReportingBusiness Intelligence – Workforce Analytics Report GenerationEasy-to-Use User InterfaceRepository for Employment and Payroll Data Interfaces to agency systemsPersonnel SecuritySystem Security

Personnel Action (PAR) ProcessingSelf-service for Employees and ManagersEmployee RelationsConfigurable Workflow for Managers and HROrganization Change Management Business AnalysisPosition ManagementPosition Description Library Position Classification Staffing Acquisition and Recruitment Competency ManagementPerformance Management Pay and Leave AdministrationEmployee BenefitsBenefits Administration and Benefits Counseling Time and AttendancePayroll Processing

Requirements for Performance Measures and Accountability

The Government Performance and Results Act (GPRA) 1993Report performance goals in quantifiable, measurable formEstablish performance indicators for each program activity

The President’s Management Agenda (PMA)eGovernmentHuman Capital Initiatives

Human Capital Assessment and Accountability FrameworkStrategic AlignmentLeadership & Knowledge ManagementTalent managementPerformance cultureAccountability

HR Line of Business Performance ModelManagement of Government Resources (Strategic Objective)Specific Measurement Groupings

CHCO Human Capital Strategic Goals

Attract Talent – recruit high quality and diverse workforceDevelop Talent – meet current and future organizational needs by closing skill gapsRetain Talent – keep skilled and dedicated employees by creating career opportunitiesTransform the Human Capital Occupation – move the Human Capital professional to a consultative/strategic partner role

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Treasury Journey to Treasury Journey to Human Capital Business Human Capital Business

IntelligenceIntelligence

Our Challenge

Legacy ‘Reporting’ capability a set of disparate systems

Excel, reporting modules of various systems, mainframe tools, custom applicationsReports required extensive ‘handcrafting’ and human heroics to deliverWhat constitutes a report was ambiguousData on reports was confusing and often misunderstood

All of this creates frustration for customers and the reporting teamTeam set out to identify a better option

Our Guiding Principles for New Solution

Self Service Orientation – Empower HR ProfessionalsDynamic Reports – real timeCarefully designed portal to optimize use of the internetEasy-to-use for HR customersAffordable long termSecureIntegrated into enterprise architectureEliminate duplicative report creation – across entire customer base Close down legacy systemsLeverage investment in HR Connect

Establish Position on BI

Reporting

Data Information Knowledge

Business IntelligenceEnabling sound business decision making to support

Human Capital/Talent Management initiatives.

TransformationLow High

Metrics Analytics

Business Intelligence grows rapidly beyond HR to encompass many enterprise systems.

Business Intelligence Architecture

MainframePayrollSystem

PeopleSoftHRMS v8.8

Future Systems(Learning,

Onboarding, Recruiting, etc.)

Data AggregationExtract, Transform, Load

Microsoft SQL Server 2005 and Analysis Services

Microsoft SQL 2005Reporting Services

Workforce Analytics Functionality and FeaturesAccess to HR Connect and Payroll Data FieldsDynamic Reports on history and current pay periodParameterized Reports

Enhanced Self Service for the novice HR business analystDrop Down Boxes

Robust ad-hoc query for the HR Super User report writer

Drag & Drop, Filters, FormulasReduces writing Code

Subscription (automated generation and email delivery)Shared Library

Eliminates duplicative report creation

Drill DownDrill Through

Tabular Design Current Workforce StatisticsHistorical StatisticsAd-Hoc Query w/historyPlanning and ForecastingPerformance MeasuresOn-line Help

Web forms for requesting reports on line Process map for Tier 1 and Tier 2 Reporting Data Dictionaries

Embedded in ReportOn-line Help Tab

Report DescriptionsRead More Links

Snap Shot

This site viewed using IE 5.5 or higher.Contact Webmaster | Updated July 12, 2007

Welcome to Workforce AnalyticsThis easy-to-use reporting application has been designed to provide Human Capital business intelligence and decision support in addition to quick hit statistics and demographics on the workforce. Information provided is based on workforce data as of pay period 08 ending 4/28/2008.

HCAAF

Model Performance Measures

HR LoB Performance ModelWorking Group System Measures

• Compensation – Average Compensation Cost andPercentage of Corrections to Total Actions

• Benefits – Participation Rates

• SES Performance/Organizational Performance Relationship Metrics

• Quality of Hires

• Comparison of Total Compensation and Employee Ratings

• Employees in Mission Critical Occupations At or Above Full Working Level

• Attrition Rates of those receiving the highest attainable rating compared to others

• Treasury Workforce by Race, Nationality and Origin (RNO) compared to the Civilian Labor Force (CLF)

HR LoB Performance Model

• Organization and Position Management – Re-direction of HR to Front Line Mission Critical Occupations

• Staff Acquisition – Quality of Hires

• Performance Management – Attrition Rates by Performance Rating

• Compensation Management – Comparison of Total Compensation and Employee Ratings

• Separations Management – Separation Trends – Minimize Non-Retirement Separations

• Human Resource Development – Employees in MCOs At or Above Full Working Level

• Human Resource Strategy – Turnover of Permanent and Temporary Workforce

Organization and Position Management Model Report

Re-direction of HR to Mission Critical Occupations

58.5%62.4%

66.7% 68.9% 69.4%

52.0%54.0%56.0%58.0%60.0%62.0%64.0%66.0%68.0%70.0%72.0%

FY01 FY02 FY03 FY04 FY05

% MCOs in Workforce

While the number of MCOs have decreased by 12%, their percentage of the total workforce has increased by 19% from the FY 2001 baseline.

More generally, Treasury increased MCOS by 11% for the FY01 – FY05 period of performance

Treasury Actual Workforce Profile (Full and Part time employees) Performance IndicatorFY01 FY02 FY03 FY04 FY05

Total Workforce 163223 168413 130128 125497 120407 -26.23%

Count of Mission Critical Occupations (MCOs) 95546 105028 86791 86506 83617 -12.49%

% MCOs 58.54% 62.36% 66.70% 68.93% 69.45% 18.63%

Hypothetical data

Separations Management Model Report

Minimize Non-Retirement Separations / Resignations

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%


Fiscal Year

Perc

ent o

f Tot

al S

epar

atio

ns

Retirement Resignation Other (Transfer, Death, Removal, Discharge, RIF, Termination)Linear (Resignation )

FY Total Retirement Resignation Transfer Death Removal Discharge RIF Termination

FY01 16589 23.36% 56.74% 6.14% 1.74% 1.90% 7.08% 0.14% 2.90%FY02 14843 22.34% 55.06% 8.89% 1.89% 2.09% 7.46% 0.01% 2.26%FY03 13586 28.92% 48.65% 3.86% 2.24% 2.77% 6.94% 1.10% 5.53%FY04 12668 34.46% 43.17% 4.95% 2.27% 3.12% 4.52% 5.25% 2.27%FY05 13429 42.04% 40.43% 6.30% 1.91% 2.88% 3.70% 1.55% 1.20%

Treasury resignations declined 16% commensurate with an increase in retirements of 19% for the FY01 – FY05 period of performance.

Separations and Respective Eligibility

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%


Year

% T

otal

Sep

arat

ions

Within 5 Within 6 - 10 Over 10

Separations trend downward for those within 10 years of retirement eligibility. Separations trend upward for those within 5 years of retirement eligibility.

FY Within 5 Within 6 - 10 Over 10FY01 29.03% 13.27% 57.69%FY02 29.58% 13.84% 56.57%FY03 30.56% 17.04% 52.40%FY04 42.51% 13.54% 43.95%FY05 47.95% 13.24% 38.82%

Hypothetical data

Retaining Talent Model Report

We traditionally lose fully successful rated employees at rates greater than outstanding or exceedsHowever, the gap is closing

Performance Ratings

Fiscal Year Outstanding Exceeds Fully Successful Marginal/ Unacceptable

2003 14% 16% 68% 3%

2004 26% 27% 40% 7%

2005 19% 24% 53% 5%

2006 30% 27% 35% 8%

2007 31% 30% 30% 9%

Average 24% 25% 45% 6%

Performance Ratings of Separated Employees

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007

ExceptionalSuperiorQualityMarginal/Unacceptable

Hypothetical data

SES/Organization Performance Relationship Metric Model Report

OPM required metric data Sample shows a correlation coefficient of 0.824 between the numerical performance

rating and the total of pay adjustments and performance based award/bonus

(A) (B) (C) (D) (E) (F) (G) (H) (I)

SES Member

New Appointment

Numerical Performance

Rating (5,4,3,2,1; X or N for no

rating)

Rate of Basic Pay Prior to

Pay Adjustments (In

$)

$ of Performance-

Based Pay Adjustment

$ of Pay Adjustment to

Maintain Relative Position

Performance Based

Award/Bonus (In $)

Total of Pay Adjustments

and Performance-

Based Award/Bonus

(In $) (E)+(F)+(G)

Total of Pay Adjustments

and Performance-Based Award

as a % of Rate of Basic Pay Prior to Pay Adjustments (%) (H)/(D)

1 3 154,993.00 6,200.00 0.00 15,500.00 21,700.00 14.0%2 X 5 152,646.00 7,632.00 0.00 22,897.00 30,529.00 20.0%3 3 145,555.00 4,367.00 0.00 8733.00 13,100.00 9.0%4 4 160,509.00 4,691.00 0.00 25,000.00 29,691.00 18.5%5 3 153,540.00 3,071.00 0.00 7,677.00 10,748.00 7.0%6 X 3 147,425.00 3,897.00 0.00 10,320.00 14,217.00 9.6%7 3 155,581.00 6,223.00 0.00 16,000.00 22,223.00 14.3%8 4 152,040.00 7,602.00 0.00 17,500.00 25,102.00 16.5%9 4 141,377.00 7,069.00 0.00 17,500.00 24,569.00 17.4%10 5 162,024.00 3,176.00 0.00 24,304.00 27,480.00 17.0%

Hypothetical data

Staff Acquisition Quality of Hires Model Report

Performance Ratings of Recent Hires

0%

10%

20%

30%

40%

50%

60%

70%

80%

Exceptional Superior Quality Unacceptable

Category of Rating

Per

cent FY 2004

FY 2005FY 2006

Performance ratings of FY 2004, FY 2005 and FY 2006 hires Includes permanent workforce, on-board one year later, with rating

< 1% of rated employees with no-rating not included

Hypothetical data

Staff Acquisition Quality of Hires Model Report

YearTotal Hires (Permanent

Workforce only)

% Retained 1 Year Later

% Retained 2 Years

Later

% Retained 3 Years

Later

% Retained 4 Years

Later2004 7096 71% 57% 51% 48%2005 5930 66% 55% 52% -2006 7777 71% 67% - -2007 9942 73% - - -

Losses occur up to 34% within the first year of hire

By year 4, losses may be up to 52%

Loss of Hires

29%34%

29% 27%

14%11%

5%

6% 3%2%

0%

10%

20%

30%

40%

50%

60%

2004 2005 2006 2007

% Loss in 4 Years% Loss in 3 Years% Loss in 2 Years% Loss in 1 Year

Hypothetical data

Compensation Management Model Report

Average Compensation (General Schedule Permanent Workforce only)

0

20,000

40,000

60,000

80,000

100,000

120,000

BEP

BPD DOFIN

CEN

FMS

IRS

MINT

OIG

TIGTA

TTBGra

nd T

otal

Average Grade

Ave

rage

Sal

ary 11.76

9.94

13.0612.8411.77

8.7611.08 12.39

12.77

11.5

8.98

Bureau Avg Grade Avg Total Salary Total Employees

BEP 11.76 82,699.79 621BPD 9.94 60,953.90 1,975DO 12.84 95,295.55 1,137FINCEN 13.06 95,205.35 281FMS 11.77 81,037.76 1,779IRS 8.76 57,796.51 89,091MINT 11.08 78,696.84 666OIG 12.39 86,581.58 96TIGTA 12.77 93,224.22 771TTB 11.5 75,576.89 387

Grand Total 8.98 59,522.41 96,804

FY 2006 Actions and Corrections

573304, 96%

22387, 4%

Total Actions

Total Corrections

FY 2007 Actions and Corrections

571834, 95%

27518, 5%

Total Actions

Total Corrections

Average Cost of Compensation per FTE

Actions and % Corrections

Hypothetical data

Benefits Management Model Report

Employee Retirement Contribution Rates 5% to 9% range in grades7 to 9% range from 2005 to 2007

Grade (General Schedule only) # FERS Employees

FY 2007 Average % Contribution to Thrift

Savings Plan02 4 9%03 270 5%04 1196 5%05 2710 6%06 1058 6%07 2388 6%08 1790 7%09 1640 6%10 31 7%11 1451 8%12 1632 8%13 3068 9%14 1477 8%15 572 7%

General Schedule FERS Employees Average % Contribution to Thrift Savings Plan

0

5,000

10,000

15,000

20,000

25,000

2005 2006 2007

9%

7% 7%

Hypothetical data

Benefits Management Model Report

% Participation in Health Benefits Program

80% 84% 83% 83% 80% 79%88%

72%

98%86%

75%

0%

20%

40%

60%

80%

100%

120%

Alcoh

ol and

Toba

cco Ta

x

and Trad

e

Burea

u of

Eng

raving

and

Prin

ting

Burea

u of th

e

Pub

lic D

ebt

Dep

artm

ental

Office

s

Fina

ncial

Crim

es

Enforce

men

t

Network

Fina

ncial

Man

agem

ent

Service

Insp

ector

Gen

eral fo

r

Tax

Adm

inistra

tion

Internal

Rev

enue

Service

Office

of the

Com

ptrolle

r of

the Currenc

y

Office

of the

Insp

ector

Gen

eral

United States

Mint

Customer Bureau

Employee Health Benefits Program Participation Rates 72% to 98%

Provider for Departmental Offices # Participants %

AETNA HEALTH INC 149 13%APWU HEALTH PLAN 12 1%

AV-MED 1 0%

BLUE CROSS AND BLUE SHIELD 653 56%

CAREFIRST BLUE CHOICE 12 1%FOREIGN SERVICE BENEFIT PLAN 1 0%

GEHA HEALTH BENEFIT PLAN 62 5%KAISER PERMANENTE 150 13%KEYSTONE HLTHPLAN EAST 1 0%

MAIL HANDLERS BENEFIT PLAN 19 2%

MDIPA 109 9%

NALC HEALTH BENEFIT PLAN 6 1%Grand Total 1175 100%

Bureau # Enrollees # Employees % Participation

Alcohol and Tobacco Tax and Trade 429 538 80%Bureau of Engraving and Printing 1797 2127 84%

Bureau of the Public Debt 1725 2088 83%Departmental Offices 1175 1418 83%Financial Crimes Enforcement Network 234 294 80%

Financial Management Service 1565 1969 79%

Inspector General for Tax Administration 691 783 88%

Internal Revenue Service 73292 101466 72%Office of the Comptroller of the Currency 2765 2809 98%

Office of the Inspector General 90 105 86%

United States Mint 1529 2027 75%

Grand Total 85292 115624 74%

DrillDown

Hypothetical data

Transforming Reports to Deliver Value Human Computer Interaction (HCI) Focus

Display DataHistorically, reports have presented only data. Reader is responsible to provide domain knowledge to create value.

Describe InformationIncreasing descriptive support for reports helps the reader gain value in using the report information.

Decision KnowledgeInteractive capabilities engage user in answeringbusiness problems and making better decisions

Valu

e

The Workforce Analytics product suite incorporates enhanced usability design to support better decision making and

enabling the Human Capital occupation to be more strategic.

Our Results So Far

A satisfied customer communityEager to do more automated reporting and analysis

Raising awareness on importance of data integrity in HRMS environment

Reports only as good as the dataIdentifying sources of data pollution

Building a stronger tie to the CHCO and other business leadersNurturing a BI competency that extends beyond HREvolving a dynamic dashboard capability in concert with an enterprise portal project

Lessons Learned

Identify metrics that align with the businessProbe: What does the organization want from people?Research other metrics initiatives (past/current) and dovetailEstablish executive support early

Focus on accuracy – build trust in dataBe prepared to resolve data integrity – upstream issues

Simple and accurate beats complex and wrongAvoid the Microsoft Excel trap

A short term solution at bestLeverage HR Metrics to pave the way for HR Technology initiatives – proof statements

Final Thought

To be truly successful in HR Metrics initiatives, be prepared

to lead change

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DiscussionDiscussion

Thank You

Karla [email protected]