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Stanford UniversityHR Centers of Expertise

Budget Group

March 16, 2011

Table of Contents

Section Page

Hiring and Recruiting 3 – 5

Compensation 6 – 10

Transactions and Records Management12 – 15

Financial Roll-Up 16 – 17

Appendix18 – 22

2

Staffing & Recruitment

CURRENT STATE RECOMMENDATIONS

• Inefficient methods limit effective utilization of candidates- Current practices obstruct sharing of top candidates- Process requires repetitive review of unqualified candidates

• Qualified candidates are likely being overlooked - Nearly 20% of resumes go unreviewed

• Specific skills, knowledge and abilities are required to effectively recruit and screen candidates- Managers who hire infrequently (and those who assist them)

may not be as effective as trained recruitment professionals.

• Compliance risk - Federally mandated disposition data is not completed in 37% of

job requisitions – requiring OSE to audit and follow-up

• Fee-for-Service limits use of OSE resource - Hiring managers without the ability to pay must rely on

individuals with less expertise (or themselves) to complete this work

• Implement a Center of Excellence (CoE) Pilot to demonstrate

how improvements can be made to the hiring process for increased efficiency and better quality hires

- CoE should manage the key stages of process - recruiting, advertising, applicant pre-qualification, interviewing, and disposition data entry

• Eliminate OSE’s fee-for-service model to allow access to

resource regardless of ability to pay

Key Observations – Staffing and Recruitment Current distributed staffing and recruitment practices lack an efficient methodology for identifying and screening qualified candidates

4

CoE Pilot – Staffing and Recruitment Stanford should develop a CoE pilot to effectively manage key process stages

5

Pilot Benefits and Measurement

Benefits

• Pool Sharing – Top candidates for positions in common job families will be leveraged and effectively utilized across the institution (admin. assoc,. finance, IT, research assts. etc.)

• Advertising – May be consolidated or eliminated in some cases resulting in reduced costs

• Mitigation of Risk – CoE will enter disposition data for pilot positions

Performance Measures

• Turnover – percentage of pilot hire separations compared to rest of University

• New Hire Qualifications – numerical assessment of how closely the hired individual matches the requirements as listed on the requisition

• New Hire Performance – numerical ranking in performance evaluation or size of annual compensation adjustment tied to performance (merit increase and bonus)

Recommended Staffing

4.0 FTE

Central OSE enters disposition

information and informs non-

selected candidates

The Center screens incoming resume

and conducts preliminary phone

interviews

HRA helps with on-boarding and

initial data entry of candidate

Hiring Manager selects face-to-face interview

candidates and conducts interviews

Hiring Manager opens job requisition

through Trovix and contacts the

Center.

The Center assists in advertising in

addition to StanfordJobs.com

Hiring Manager and Department

select final candidate

Compensation

CURRENT STATE

Key Observations – Compensation

Towers Watson worked with Stanford University on a review of the current compensation process and system to confirm and clarify problems with the current system and develop a recommendation to address such problems

Recommendation to design and implement new market- and career-based system to address key concerns

CURRENT STATE RECOMMENDATIONS

• Process viewed as complex and bureaucratic- Duplication of effort and resources in evaluating jobs;

question about whether best handled by HRMs

• Inconsistency in job evaluation decisions across the university - Causes concerns among managers, employees, and HR

regarding internal equity and external pay competitiveness

• Lack of understanding and trust in current approach- Driving concerns about competitiveness with the external

market

• Lack of clarity and transparency regarding career levels/progressions by job function across the university - Causes confusion among managers, employees, and HR

on what requirements are needed to progress to the next level

• Simplified/streamlined system and process

- Supporting efficient use of resources – availability for HRMs to focus on other strategic HR efforts

• Consistent/fair job assignments to market-based salary grades/ranges - Providing assurance of correct valuations of jobs leading

to improved trust in the system

• A market-based system - Driving closer alignment of pay ranges for individual jobs

to the external market

• Clarity/transparency of career levels/progressions- Leading to better understanding of career paths

resulting in improved employee engagement

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Illustration: Recommended System

• Job levels- Determined by University

Compensation (centralized - consistent) based on market data (simple, clear) for Stanford jobs matched to survey jobs in partnership with managers

• Salary ranges- Developed by University Compensation

using market data collected from Stanford jobs matched to survey jobs (above process)

Each job assigned to salary grade based on mid-point of closest tie to market (market competitive - job level not a determinant of salary range

• Career Based- Career progression developed by using

market-based job hierarchy

Salary Structure

Grade Minimum Midpoint Maximum

12 $177,000 $239,000 $301,000

11 $151,000 $196,000 $242,000

10 $125,000 $163,000 $200,000

9 $105,000 $136,000 $168,000

8 $87,000 $113,000 $139,000

7 $74,000 $94,000 $115,000

6 $63,000 $80,000 $98,000

5 $54,000 $68,000 $81,000

4 $47,000 $59,000 $71,000

3 $41,000 $51,000 $62,000

2 $35,000 $44,000 $53,000

1 $30,000 $38,000 $45,000

R&D ManagerMarket Rate = $115k

R&D Engineer-Sr.Market Rate = $91k

Financial Analyst – Int.Market Rate = $61k

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9

Resources – Current vs. Recommended

Recommended system requires the addition of 2.0 FTE: results in an easier to use and more efficient system, and productivity gains of 3.5 FTE

Current System Recommended System

# Job classification reviews per year

545 reviews 363 reviews (assumes 1/3 future reduction)

Time spent on job classification

19 hours per review– Mgr = 7 hours– HRM = 7 hours– Comp Analyst = 5 hours

9 hours per review– Mgr = 4 hours– HRM = 1 hour– Comp Analyst = 4 hours

Total hour spent on job classifications

8,540– Mgr = 3,815 hours– HRM = 3,815 hours– Comp Analyst = 910 hours1

3,267– Mgr = 1,452 hours– HRM = 363 hours– Comp Analyst = 1,452 hrs2

Total compensation FTEs to maintain

system

3.5 FTEs 5.5 FTEs (inc addt’l) 2 FTEs3

Productivity gains

Mgr = 2,363 hours (1.4 FTE)HRMs = 3,452 hours (2.1 FTEs)

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1 Approximately 1/3 of reviews currently involve Compensation Analyst – 5 hours x (1/3 of 545 reviews) = 910 hours2 Shift in role for Compensation Analyst from consulting to conducting all job reviews3 Reflects additional FTE to maintain recommended system to cover such activities as audits, additional survey work, additional time for work on individual job classifications (more client interface) and participation/consultation on all reviews not just a third

Transactions and Records Management

Current State Observations

• Non-standardized processes within the various transaction types result in transaction delays, errors, lack of defined roles and responsibilities and internal controls; every department handles each transaction with different processes and people

• Of the 148 authorized transactors 60% produced only 10% of total transaction volume

• 41 distributed transactors spend between 50% and 100% of time focused on transactions

• In FY2010, the average departmental error rate of critical (pay and benefits) transactions was 6.2%

Key Observations – Transactions

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Recommendations

• Implement a Transaction Center of Excellence (CoE) Pilot to centralize transactions

- Redesign/standardize end-to-end process, that results in efficient , transparent, and improved customer and department service levels

- Mitigate the loss of knowledge due to turnovers and effectively manage seasonal fluctuation through allocation of other central resources or proper training of temporary staff

- Re-allocate transactors who spend 50% or more of time on transactions

- Reduce critical transaction (pay and benefits) error rates to below 1%

Non-standardized, redundant, and multiple touch processes result in high inefficiency and critical errors

CoE Recommendations – Transactions

Recommended Transaction CoE Pilot Staffing

4.0 FTE

Data Driven Analysis

A Transaction Resource Projection model was created that calculates the projected number of full time transaction specialists necessary

The model includes a complexity matrix to determine time and complexity of all transaction types, for each type of employee

Processing time was then calculated for each transaction action/type for each employee type

Implement a pilot comprised of 1 manager and 3 transactors to centralize transactions for a specific number of departments (tbd) to initiate the CoE

Centralize transactions to achieve process improvement, transparency, improved customer service levels, and error reduction through standardization and knowledge capture

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Centralized Process

People Touches

# Steps

2 4

Current Transaction Processes

Dept. People Touches

# of Steps

Sufficient Internal Controls

A 2 5-7 No

B 6 7-12 Yes

C 3 5 - 9 Yes

Department Manager or HRM populates Action

Form

Hiring Manager or HRM approves

webform

Central originates and completes

webform

Central enters any additional required information (if any)

and uploads to PeopleSoft

No: Insufficient information

Will be performed by Central CoE, using a standardized Action Form template specific to each action type.

• Transaction addressed and acted upon

• Dept. Manager seeks internal approval for change (i.e. Finance, Dept. VP or Dean)

• With proper approvals, Dept. Manager moves to start transaction

Centralized Process

Appendix

Hiring and Recruiting Pilot: ImplementationA hiring and recruiting Pilot will require approximately 4 resources across specific departments (tbd)

High Level Plan

1 Finalize selection of pilot departments

2 Hire new resources to shift to center

3 Assign roles and responsibilities to central staff (including backup support and focus on trainings, CoE development, central database, and process improvements)

4 Develop and build in mandatory trainings for CoE resources and at department level

5 Evaluate service levels and performance measures of the pilot, and any additional departments added to center

6 Evaluate staffing and build up resources if additional departments are to shift to CoE

7 Transition additional departments

8 Continue to improve and develop services

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Note: OSE currently has two (2) full time recruiters, which could transition to the CoE

Compensation: New Market- Career-based System

Key Project Implementation

Phases Steps

I. Set Foundation1. Conduct project planning and data collection

2 .Confirm target market and competitive position for jobs

II. Conduct Detailed Analysis 3. Match Stanford jobs to surveys and gather market data

III. Design Structure & Level Descriptions

4. Develop new salary structure and assign jobs

5. Develop descriptions for job series progressions

6. Validate with HRMs/Specialists and Managers

IV. Implement

7. Develop pay delivery/administration guidelines

8. Development implementation plan

9. Develop communication materials and rollout

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Note: Estimated timing 49 weeks (timing may vary based on availability of key stakeholders and project resources to provide input, conduct steps, review deliverables, and make decisions

Transactions: Implementation

Transaction Specialists

Transaction Management

Total

Department 1 1

1 4Department 2 1

Department 3 1

A Transaction CoE will initially require approximately 4 resources across 3 departments, with a defined management team to operate in FY 2012.

High Level Plan

1 Determine CoE staff, using existing resources and/or brand new resources

2Create the necessary actions and put in place specific procedures, policies, training, and performance measures

3 Develop standardized Action Forms for each transaction

4 Perform PeopleSoft module training to upload the Stanford specific Action Form

5 Create Trainings for the each type of transaction by each employee type

6Transition the three departments to Transaction Center, spreading transactions across all 3 transaction specialists

7After 6 months, evaluate staffing and build up resources as additional need is determined

8Transition the remaining transactions for the remaining 3 selected departments to the Center; monitor and track for efficiency and quality

CoE Services, Activities, and Accountability

PeopleSoft HRIS operations

– Web form creation and maintenance

– HR data upload and entering

– Provide guidance to individual PeopleSoft users on the implication of certain data input

– Provide functional instruction to individual PeopleSoft users

– Ensure HR data integrity and accuracy Report creation and maintenance

– Create cross functional reports (e.g. HR, Payroll, and Finance)

– Provide backup to historical data

– Provide real time ad hoc report support Trainings

– Provide periodic training on Web Form usage and specific processes related to data transfer into PeopleSoft

Records Management

– Collect and maintain I-9 forms

– Collect and enter Disability related transactions

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REQUIREMENTS FOR EFFECTIVE STAFFING AND RECRUITEMENT: SKILLS, KNOWLEDGE & ABILITIES

HIRING MANAGER CHALLENGES

 1) Job Market Knowledge - understanding of skill set availabilities, competition & market dynamics

2) Recruiting Knowledge and Sourcing Skills

• Generating passive candidates - people not seeking work - Internet recruiting (DNA searching), social networking competencies, lead generation and referral processes

• Generating active candidates - people seeking work - job boards, aggregators, web analytics, search engine optimization

• Marketing and branding – turn job descriptions in “career opportunities”

• Database searching – “mine“ Trovix and other candidate databases  3) Screening, Interviewing, Candidate Management Ability

• Screening/Interviewing - for technical and soft skills (critical for job success)

• Maintaining candidate interest – during lengthy hiring processes

• Compliance - with federal regulations regarding disposition data

4) Hiring Manager/Search Committee Consulting

• Effective Processes – Manage large applicant pools and interview teams• Candidate evaluation advice - Assessing soft skills; legal interviewing

• Time - Frequently inadequate to effectively screen applicant pools

• Recruiting Skills (infrequent practice)

- Generally, don’t possess high level recruitment skills needed to source and recruit top candidates

• Interviewing Skills (infrequent practice)

- May lack training/ability to completely assess candidates - tend to assess technical skills only.- May have difficulty determining “fit” - motivation, commitment, flexibility, ability to work in Stanford environment, team work, etc.

• No Pool/Applicant Sharing   - No access to top candidates in similar applicant pools at Stanford

Value of Expertise– Staffing and Recruitment Specific skills, knowledge and abilities are required to effectively recruit and screen candidates; managers who hire infrequently (and those who assist them) may not be as effective as trained recruitment professionals

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