6/11/2012

1

WORKFORCE

ANALYTICS IN THE

BOARD ROOM: HOW

GAP INC GETS

RESULTS JAIME DYER

SR. HR MANAGER

WORKFORCE ANALYTICS

REGAN KLEIN

PRINCIPAL CONSULTANT

WORKFORCE ANALYTICS&

PLANNING

6/11/2012

2

GOALS FOR THE SESSION

• Goals:

– Identify workforce metrics that are top of mind for Board executives

– Identify challenges in effectively utilizing workforce data

– Discuss how to package and present Board level data

– Learn how Gap Inc. made Board reporting a regular process

– Detail two Gap Inc. case studies that utilize workforce data in a non-traditional

manner for the Board

WORKFORCE

ANALYTICS IN

THE BOARD

ROOM

6/11/2012

3

Workforce analytics is a methodology

for creating insights on how

investments in human capital impact business outcomes.

This is done by applying statistical methods to integrated

HR, talent management, financial, and operational data.

DATA EMPOWERS…

NEW HR LEADERS

win executive authority with credible data, business

cases, and ROI forecasts.

CFOS, CIOS AND SALES EXECS

have credibility with CEOs because their views and

decisions are based on data.

“If you and your head of HR haven’t recently discussed

ideas for using data to generate a talent strategy that’s

more closely linked to business results, it’s time to start.”

6

6/11/2012

4

5 COMMON CHALLENGES REACHING

THE BOARD OF DIRECTORS

1. HR is Viewed as Administrative,

Rather Than a Strategic

Function

2. C-Suite or BoD Meetings

Feature Crowded Agendas

3. HR Lacks Definitive Metrics

Standards

4. Firms Offer Lagging, not

Leading Indicators

5. Measurement Overload

LINK HR TO CORPORATE STRATEGY

FOR MEASURABLE BUSINESS IMPACT

8

ACTION IMPACT

Grow 20%

Expand new markets

Cut operating costs

Improve service

Cut time to market

Innovate

Do we have the talent to

execute on our strategy?

Where are future talent gaps?

Are we maximizing new hire

investments?

In which workforce segments

does increases in voluntary

turnover present greatest risk?

Are we retaining our high

performers?

Which workforce programs have

the highest projected financial

impact?

Do we pay for high

performance?

Manager tenure

Staff turnover

Quality of hire

Pay distribution

Workforce planning

Optimize

pay distribution

Change

on-boarding

Growth

Cost reduction

Effective

leadership

Productivity

ASK THE RIGHT

QUESTIONS

INSIGHT STRATEGY

BASE ANSWERS ON

FACTS VS. GUT

FEELINGS

KNOW THE

IMPACT OF YOUR ACTIONS

CHALLENGES

1. What business

outcomes are we

trying to impact?

2. What are the

human capital drivers

of these outcomes?

3. What is our current

state compared to the

optimal state?

4. What talent

strategies drive

these outcomes?

6/11/2012

5

METRICS FOR THE BOARD OF

DIRECTORS

9

7%

13%

20%

27%

33%

Performance metrics

Risk metrics

Core workforce metrics

Succession metrics

Financial workforce metrics

Which category of workforce metrics are of highest priority for your Board of Directors (or should be)?

Source: SuccessFactors, “Human Capital Management: What Really Matters, What Should You Measure, and How

Should You Measure It?” survey, September 2011, N=16.

THE “RIGHT” SET OF METRICS

Group #1: Core Workforce Facts:

– Headcount/FTE

– Terminations

– Diversity, by Gender and Ethnic Background

– Workforce Age Profile

Group #2: Financial Workforce Metrics:

– Operating Revenue per FTE

– Operating Profit per FTE

– Return on Human Capital Investment Ratio

– Cost of Turnover

Group #3: Productivity and Performance:

– Workforce Productivity (Measured in outputs relevant to the specific firm)

– Workforce Availability/Absenteeism

– Executive Compensation/Pay Comparison

Group #4: Talent Development and Succession:

– Leadership Quality (Current and Bench)

– Staffing Rate – High Performers

– Staffing Rate – High Potentials

Group #5: Human Capital Risk: –

– Succession Risk (Absence of Ready-Now Successors)

– Staffing Shortages in Critical Roles

– Current vs. Future Competency Gaps

– Churn (hires vs. terminations) Rates

– Knowledge & Transition Risk (of an aging workforce)

6/11/2012

6

KEY LEARNINGS FOR PRESENTING AND

PACKAGING EXECUTIVE LEVEL DATA

1. Regular Reporting is a Must

• Data credibility

• Rhythm

• Standardization (Formulas, Definitions,

etc.)

2. Balancing Breadth and Depth

• Scorecards

• KPIs

• Clear linkage to business issue

3. Combining Data and Analysis

• Effective story-telling

• Target-setting

• Benchmarking

• Recommended action

HOW GAP

INC GETS

RESULTS

6/11/2012

7

GAP INC.

Founded in 1969 with a single store in San Francisco, California

Global Specialty Apparel Retailer with five distinct Brands

Gap, Old Navy, Banana Republic, Piperlime and Athleta

Employ 130,000 employees across the globe

Operate approximately 3,200 company-owned and Franchise stores

globally

Average employee is 28,

60% Generation Y(born

after 1979)

50,000 employees

volunteered 428,000 hours

to local communities in 2010

BUSINESS NEED

QUESTIONS PROPOSED BY OUR BOARDS

CASE 1: Gap Inc. Board of Directors

Turnover of employees in some of our most critical roles appears to be

increasing. Is retention down? Is it likely this trend will continue? What’s our

level of risk as we enter 2012?

CASE 2: Gap Foundation Board of Directors

What is the business impact of our highly visible “This Way Ahead” Internship

Program? Are we realizing ROI above and beyond its impact on youth and

communities?

6/11/2012

8

CASE 1:

CRITICAL

ROLES

TURNOVER

REPORT

LEGACY BOARD REPORT

Critical Roles Turnover

Report Details

Report Challenges

(Pre-SuccessFactors)

5 Division summaries created and delivered

for review by HR Business Leaders

Over 100 job codes to track and build into

PeopleSoft queries

Executive Summary delivered quarterly to

BOD since 2007 Complex review and feedback process

Year-to-date turnover for critical roles

(Execs, Design, Merchants, etc)

BOD Meetings occur within 2 weeks of

quarter close

This Year versus Last Year trend Limited trending (this year vs. last year)

BOD expects quantitative and qualitative

results BOD asking for risk assessment –

predictions based on historical trends

North America focused until 2011 No global talent assessment

6/11/2012

9

METHOD USED

BUSINESS RESULTS

Before SuccessFactors After SuccessFactors

Access to results quarterly Access to results monthly

Manual calculations and report design using:

PeopleSoft, Excel, Access, PowerPoint

Automatic calculations and report creation

using: Report Designer, WFA

2 weeks lead time required to produce final

report 4 days lead time required to produce final

report

This Year vs. Last Year view only 4 year trend for all roles

North America talent only Global talent assessment

Packaging: Simplistic view Packaging: Expanded view

6/11/2012

10

TAKING IT TO THE NEXT LEVEL

Predicted future turnover using

historical links between Turnover

and Engagement

Provided BOD with data driven risk

assessment

Model in place to monitor, track and

report on future trends

CASE 2:

TWA INTERN

SCORECARD

6/11/2012

11

THE GAP FOUNDATION - THIS WAY AHEAD

Gap Inc. Head of Foundation sits on White House Council for Community Solutions

In partnership with 2 non-profit organizations, Gap Inc. created comprehensive “This Way Ahead” Program

Primary objective to positively impact underserved youth for the betterment of our communities

Program launched in 2006 in New York; In 2010, launched in San Francisco, CA

About half of the participants become interns and about 70% of the interns are hired into permanent positions following their internship

6/11/2012

12

MEASURING IMPACT

After five years . . .

Proven impact on youth (main objective)

Multitude of data and measurement performed by third-party

Unanswered questions from the Board on impact to the business

Foundation employees hypothesize that TWA Interns will have lower

rates of turnover and higher performance over time than comparable

non-TWA interns

Field leaders involved in training facilitation indicate professional and

personal gain from involvement in the program, but is this actually

translating to improved performance and business results

THE CHALLENGE

HOW DO YOU TRACK INDIVIDUAL TWA

INTERNS THROUGH THEIR CAREERS AT

GAP INC?

6/11/2012

13

BEFORE SUCCESSFACTORS

Approach #1: Unique Job Code

Results: Abandoned because the Brands began to use the job

code for their own non-TWA purposes

Approach #2: Build PeopleSoft queries with each TWA Intern

EmployeeID built into the criteria

Results: Abandoned due to growing number of TWA Interns and

limited analysis capabilities using PeopleSoft data dumps

Approach #3: Engage Workforce Analytics Team for potential solutions

A CREATIVE SOLUTION Flexible TWA Intern mapping built as Analysis Option on WA site

TWA Interns successfully tracked through career at Gap Inc.

Critical demographics easily reportable (diversity, age, gender, etc.)

TWA Interns can be quickly compared to non-TWA colleagues on key performance metrics (turnover, tenure, performance, etc.)

What’s Next????

Adding Field leadership (facilitators) to the Analysis Option mapping; report on career progression and performance metrics for Gap Inc. leaders involved in the TWA Program

6/11/2012

14

BUSINESS RESULTS Quarterly Program Scorecard with performance metrics on BOTH

Youth and Business Impact developed and delivered for two quarters; Board feedback on the addition of Business Impact metrics very positive . . . Hungry for more data

One hypothesis proven: TWA Interns have significantly lower <1 year turnover rates than their non-TWA colleagues of similar age

Foundation in place to quickly track and report on TWA Intern progress – Gap Foundation staff enabled to retrieve data and perform analysis as needed (Workforce Analytics Team resources not required)

Best Practices for Measuring Impact noted in public Toolkit produced by Gap Foundation to help other businesses design and implement their own programs (technology solution for tracking progress recommended up front, before implementation)

KEY TAKEAWAYS

TO GET THE BOARD’S ATTENTION:

Link to Business Issues: Critical Roles – retention of employees in critical roles

TWA Intern Scorecard – ROI and Business Impact

Story Telling: Critical Roles – 4 year global trends used to assess risk

TWA Intern Scorecard – Full picture on impact

Keep it Simple: Critical Roles – Thresholds established and reflected

TWA Intern Scorecard – One page with key metrics

Think creatively, be innovative in your search for solutions . . .

6/11/2012

15

QUESTIONS?

CONTACT INFORMATION

Jaime Dyer

GAP INC

Sr. Manager HR, Workforce Analytics

Physical Location: Albuquerque, New Mexico

Email: jaime_dyer@gap.com