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27 September 2017

Global Financial Services 2017 Taking human capital and business outcomes to the next level: RBC case study

Per Scott, Vice President, Human Resources, RBC

Emmett Seaborn, Willis Towers Watson


Today’s discussion

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Challenges in workforce effectiveness and productivity

Workforce effectiveness framework

RBC case study

What you can bring back to your organisation

Challenges in workforce effectiveness and productivity

© 2017 Willis Tow ers Watson. All rights reserved. Proprietary and Confidential. For Willis Tow ers Watson and Willis Tow ers Watson client use only.


The ‘productivity crisis’ has made headlines over the past two years

4

OECD Productivity Indicators 2017: The weakening of labour productivity growth in recent years has been spread broadly across sectors but declines have been sharpest in manufacturing, information and communication services, and in finance and insurance.

Productivity crisis haunts global economy

U.S. Total Factor Productivity Slowdown:

Evidence from the U.S. States

Why is labor productivity so low? Consider investments in skills


Declining productivity growth in financial services

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Source: Organisation for Economic Co-operation and Development Statistics for European Union, annual growth in gross value added per hour worked, constant prices

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Pro

duct

ivity

gro

wth

rat

e x

100

4.0%

3.0%

2.0%

1.0%

-0.0%

-1.0%

-2.0%

Pro

duct

ivity

gro

wth

rat

eProductivity Growth – Financial and Insurance Services

(European Union)


Good talent management practices drive higher productivity

6

Source: Joint report from Center for Economic Performance and McKinsey, July 2007, cep.lse.ac.uk.

7

6

5

4

053 421

Management practice score (1-5)

Labor productivity score

Excellent

High

Low

Poor


Engaged employees changethe bottom line

HR practices have a significant impactEngaged employees are more productive

7

Source: Willis Towers Watson 2014 Global Workforce Study

operating margin

3x

fewer days absent

6.5lower turnover

risk

41

7

Workforce effectiveness framework



§ Results provide an indirect link to financial results

§ Result provides a direct link to financial results

Taking human capital and business outcomes to the next level

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Employee Engagement Survey Workforce Effectiveness Framework


§ Best Talent§ Right Rewards§ Winning

Culture§ Well Being§ How Work is

Done

Workforce effectiveness framework A direct link to financial results

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1Each category contains about six human capital factors

Human Capital Factors (Categories1)

Targeting the key drivers to the critical workforce segmentsTargeting the key drivers to the critical workforce segments

Human Capital Strategy

Key Business Measures

Business Outcomes (Performance)

§ Prioritization of human capital factors

§ Planned actions short-term and long-term

§ Efficiency§ Quality§ Sales &

Service§ Innovation§ Brand

§ Customer§ Financial § Operational


Improving business outcomes starts with a critical workforce segment tied to an area of focus within your organization, and results from direct improvement to key measures

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§ Production§ Manufacturing§ Call center staff§ Technicians

§ Manufacturing§ Assembly§ Service dept§ Nurses

§ Research & development§ Engineers§ Tech developers

§ Relationship sales§ Sales and service

§ Marketing§ Public relations§ Web designers§ Communications

§ Goods produced per FTE§ JIT delivery met

per unit§ Overtime hours

as % of total hrs.

§ Error rate per batch§ Rework rate per

labor hour§ Product recalls per

batch

§ Development ideas per FTE§ Time to market per

unit§ Patents per R&D

spend

§ Number of products sold per customer§ Time to

Effectiveness

§ Web hits per online ad $ spend§ Customer brand

recognition§ Social media

favorable mentions

Efficiency Sales & Service BrandQuality InnovationFocus Areas

Key Measures

Critical Workforce Segments

Action planning is driven by those human capital factors presenting the greatest opportunity to improve the key measure(s)

RBC case study



Royal Bank of Canada (RY on TSX and NYSE)

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Market leader with a focused strategy for growthTop 15 Globally(1)

One of the 15 largest global banks by market capitalization with operations in 37 countries

16 Million+ ClientsServed by ~80,000 employees worldwide

Largest in Canada(1)

A market leader across all key businesses

PurposeHelping clients thrive and communities prosper

VisionTo be among the world’s most trusted and successful financial institutions

Strategic Goals

In Canada: To be the undisputed leader in financial services

In the United States: To be the preferred partner to corporate, institutional and high net worth clients and their businesses

In Select Global Financial Centres: To be a leading financial services partner valued for our expertise

1Based on market capitalization as at July 31, 2017


DATA INSIGHT IMPACTACTIONCONTEXT

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People centred business analyticsUsing analytics to add value

14

+


+DATA INSIGHTCONTEXT IMPACTACTION

Building upon what we already do…

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YIELDSA common

understanding of the situation

ADVANCED ANALYITICSDriver Identification & Machine Learning

CLASSICAL STATISTICSPopulation Comparisons & Trend Analysis


+DATA INSIGHTCONTEXT IMPACTACTION

Building upon what we already do…

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YIELDSA common

understanding of the potential paths forward

QUANTIFYING IMPACTForecasts and Projections, Simulations, and Program

Design

SETTING ATTAINABLE TARGETSKPI’s & Outcomes that are verified by Models


Identify Key Business Measures

• Time to Effectiveness• Number of products sold per customer

Prioritize Human Capital

Factors

• Review comprehensive set of human capital factors

• Rate factors for importance and effectivenessenabling the development of an opportunity score

Perform Action Planning

• Reduce the time to effectiveness for ‘new hires’2

• Increase the number of products sold per customer

Improving business measures through human capital factors — our approach

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Critical workforce segment: Retail & Commercial Salesforce1

Goal: Identify solutions improving both

business measures

1The study covered seven specific roles, representing 55% of the Retail and Commercial Salesforce.2’New hires’ is comprised of all people in new roles at RBC, both external hires and internal employees who are new-to-role.


Reducing the time to effectiveness for new hires presents a major opportunity for RBC

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$600 million

opportunity for the

workforce

16 months to achieve full

effectiveness

36,000 people in new roles

each year

$13 billion in total

compensation

Retail & Commercial Salesforce

All RBC employees

Average months to effectiveness –Relationship sales roles: 18 months

Sales & service roles: 12 months

The financial projections contained herein pertain only to seven specific roles within the Retail and Commercial Salesforce with

6,500 ‘new hires’ annually.


Human capital factors

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• Hiring the right people• Having an adequate number of qualified candidates• Having an efficient and timely hiring process• Getting new hires up to speed• Developing the right employee skills, capabilities, and knowledge • Putting people in the right roles (matching individual skills and capabilities with business needs)• Offering career progression opportunities

Best Talent

• Offering the right mix/portfolio of rewards (salary, incentives and recognition programs)• Linking performance assessment metrics to business priorities• Differentiating rewards between top and bottom performers• Having an effective performance management process• Ensuring these employees understand how their role impacts the business• Ensuring managers are enabling high performance through effective coaching and feedback• Equipping managers to set the right performance objectives and priorities with these employees

Right Rewards

• Employees applying extra effort at work• Employees buying in to business objectives• Ensuring these employees are supported and enabled in their work • Employees feeling energized at work• Workplace culture supports the employee behaviors needed to drive business results• Employees taking pride in our brand, mission, vision, and values

Winning Culture

• Employees getting the moral support and help they need from peers• Employees maintaining good overall health• Employees handling the stress and pressure at work/or home• Providing these employees with information, tools, financial support to help manage short and long-term

finances• Managing health-related employee absenteeism• Do employees generally follow safety procedures?

Well Being

• Making use of alternative work arrangements (e.g., freelancers, contractors, etc.)• Enhancing/transforming work through robotics, artificial intelligence, and other innovations• Providing technology, tools, and processes to get work done

How Work is Done

The human capital factors are actionable levers which help improve business measures


Human capital factor ratings (Framework for action)

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Maintainfactors plotted here

Take Actionon factors plotted here

Factors plotted here areNot as Important

Human capital factors are plotted based on employee and manager ratings for importance and effectiveness (gap) toward improving the identified business measure(s).

ImportanceRating

Effectiveness Gap

Greatest Opportunity to Improve Measure Opportunity =

Importance Rating x Effectiveness Gap

Critical workforce segment: Retail & Commercial Salesforce

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1.99

2.05

2.12

2.23

2.25

2.33

2.40

2.56

2.63

2.70

- 0.50 1.00 1.50 2.00 2.50 3.00

Equipping managers to set the right performance objectives and priorities withthese employees

Employees buying in to business objectives

Developing the right employee skills, capabilities, and knowledge

Putting people in the right roles (matching individual skills and capabilities withbusiness needs)

Enhancing/transforming work through robotics, artificial intelligence, and otherinnovations

Ensuring these employees are supported and enabled in their work

Having an adequate number of qualified candidates

Employees feeling energized at work

Employees handling the stress and pressure at work/or home

Providing technology, tools, and processes to get work done

Opportunity Scores

Number of Products Sold per Customer Time to Effectiveness

Opportunity scoringRelationship sales roles

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Opportunity Score =Importance Rating x Effectiveness Gap


Human capital factors recommended for action planning at RBCCritical workforce segment: Retail & Commercial Salesforce

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• Employees feeling energized at work

• Having an adequate number of qualified candidates

• Putting people in the right roles (matching individual skills and capabilities with business needs)

• Employees handling the stress and pressure at work/or home

• Providing technology, tools, and processes to get work done

• Differentiating rewards between top and bottom performers

• Equipping managers to set the right performance objectives and priorities with these employees

Increase number of products sold per customer

Reduce number of months to effectiveness

Relationship sales,sales & service roles Sales & service rolesRelationship sales roles

BE

ST

TALE

NT

BE

ST

TALE

NT R

IGH

T R

EW

ARD

SR

IGH

T R

EW

ARD

S

WIN

NIN

G

CU

LTU

RE

WIN

NIN

G

CU

LTU

RE

WE

LL-

BE

ING

WE

LL-

BE

ING

HO

W W

OR

K

GE

TS D

ON

EH

OW

WO

RK

G

ETS

DO

NE

BE

ST

TALE

NT

BE

ST

TALE

NT

RIG

HT

RE

WAR

DS

RIG

HT

RE

WAR

DS


Financial impact forecastCritical workforce segment: Retail & Commercial Salesforce

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1The study covered seven specific roles, representing 55% of the Retail and Commercial Salesforce.2The impact on revenue of increasing the number of products sold per customer is currently being developed, and would be additional to the figures above.

Reducing the time to effectiveness for new hires presents a $600 million opportunity for RBC. The impact above is for the first group addressed.

Impact: $30 - $60MM annually

Impact represents a decrease in stranded costs attributed to a reduction in the number of months to effectiveness.1,2


Time to effectiveness and stranded costsCritical workforce segment: Retail & Commercial Salesforce

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0.0%

33.3%

66.7%

1 2 3 4 5 6 7 8 9 10 11 12 13 14.3

% E

ffect

iven

ess

Number of Months

Time to 100% Effectiveness and Stranded CostsAll Sales Roles

Current, Scenario A, Scenario B

Current Scenario A Scenario B

Scenario A - Impact on Stranded Costs: -$30 million

Scenario B - Impact on Stranded Costs: -$60 million

Current - Stranded Costs: $350 million(area above curve)

14.313.011.6100.0%

months


Potential solutionsRetail & Commercial Salesforce: Relationship sales roles, and sales & service roles

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Having an adequate number of qualified candidates

• Update assessments

• Widen pool of candidates from adjacent occupations

• Redesign value proposition brand for market needs

Providing technology, tools, and processes to get work done

•Just-in-time (JIT) learning for products

•Incorporating virtual assistants to support client meeting preparations

Differentiating rewards between top and bottom performers

• Manager training on how to better differentiate and hold performance conversations (no change)

• Revisit balance between team-based and individual goals

Relationship Sales, Sales and Service roles

Relationship Sales roles Sales and Service roles

BEST

TA

LENT

BEST

TA

LENT

HOW

W

OR

K IS

DO

NE

HOW

W

OR

K IS

DO

NE

RIG

HTR

EWAR

DS

RIG

HTR

EWAR

DS


What you can bring back to your organisation

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Place human capital into a broader business framework, enabling a more compelling business case for change

Partner with business leaders to assure that human capital solutions directly address business needs

Identifybusiness measures and workforce segments

Understandwhere human capital factors have has the greatest opportunity to directly impact financial results

Enhance the ability to tailor your solutions for critical roles & segments, and organization-wide

27 September 2017

Global Financial Services 2017 #WTWGFS17#WTWDisruptionRevolution


global financial services 2017 taking human capital and ... › assets › 2017gfs › ... ·...

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