Human resources management – although designed differently in each company – usually includes the areas of HR strategy and policies, HR planning, recruitment, staff development, training, compensation design and HR administration. PwC boasts a comprehensive range of HR management services that focus on the ongoing needs of daily HR activities.
The PwC advice offering is structured as follows:
Shorter and unstable economic cycles, demographic changes and the competition for talent characterise today’s working world. Competitive pressure, particularly from Asia, drives companies to continuous innovation and performance improvement. At the same time, the demands of different stakeholders and regulators have increased. This all has implications for HR.
These expectations, placed on a company from within and from without, are ultimately expectations of the performance of employees. Because at the end of the day, it’s not the organisations that make something or render a service, it’s the people – the employees – who do. Companies are finding it increasingly difficult to find the right people, as CEOs and their top management have been saying for years.
PwC helps companies find ways to spur continually better performance by employees under changing market conditions – so that the HR function can additionally position itself to create value and continually improve.
The HR strategy services at PwC deal with the question: what do value-added HR activities look like, and how HR can achieve this? PwC advises companies on the following issues and supports them in the implementation of the joint findings:
The basis for the development, definition and implementation of the HR strategy must be the company’s overall strategy. Only when the HR strategy closely reflects the market and business developments will HR be in a position to add value to the company’s bottom line.
An optimal HR strategy puts the recruitment and retention of key employees in the foreground, pursues a targeted and performance-oriented staff development programme – combined with attractive promotion and reward systems – and provides for long-term succession planning. The aim is also to develop a corporate culture with a corresponding guiding philosophy. This is how companies can gain a competitive advantage.
The implementation of an HR strategy requires an efficient and effective HR function strategy. Crucial here is to relieve the HR business partner of administrative duties so that he or she becomes a strategic business partner to both company and departmental management. PwC advises companies on the development, definition and implementation of the HR strategy.
Companies must constantly ask themselves whether, in terms of their employee structure, they are positioned to meet future market needs. Age composition, diversity and workforce skills are critical to a company’s success. PwC supports companies in the formulation and concrete implementation of HR policies in the various HR management functions.
Through effective talent management companies can ensure that all critical positions and roles within the company are filled in the medium to long term with people who, from a strategic perspective, are especially suitable. It is important to adopt an integrated and holistic approach in order to manage talent successfully over the long term. That consists of interrelated elements. A clear competency model is a prerequisite for recruiting the right people and offering them appropriate training and development opportunities. Incentives and an attractive compensation package rounds out the talent management process.
PwC supports companies in developing the appropriate talent management strategy and its key elements, and ensures their integration. This includes the definition and development of competency models, recruitment and selection, performance management, staff development, career/succession planning and performance-based compensation. In addition, the experts will assist in the analysis, definition and implementation of processes and tools, and the design of appropriate IT processes and solutions.
Performance management is an important tool for measuring the value added by employees and defining requirements in the form of goals. This allows for employee performance value to be better identified and evaluated. PwC helps businesses develop the right strategies, adapt their processes and systems accordingly, and select the appropriate IT.
The continuing competition for qualified staff requires that HR use reliable and easily applicable systems and procedures. For employees, it is usually pretty important that their compensation is fair and transparent. At the same time they want to see concrete opportunities for growth. Businesses can offer both when they analyse and group all the jobs in terms of their strategic value added.
The STRATA method is an analytical job evaluation tool which is successfully established in the market and has been proven in all industries and company sizes. The method is well suited to assessing the requirements for and value added by different managers, staff and project stakeholders. This forms the basis for a differentiated compensation system and integrative talent management. The job evaluation system also assists in efficiently managing personnel costs. With increasing pressure on HR budgets and cost savings, the HR department can in this way assist with the company’s business activities as a strategic thinking partner.
Proper planning of the workforce is a key success factor in achieving the company’s goals. PwC supports companies in the preparation of analyses and plans for short-term and strategic staffing needs. Moreover, the experts assist in developing policies for recruitment, restructuring and staff development, and in introducing working time systems – through, among other things, change management measures. They also work with companies on the adaptation and adjustment of processes for operational and strategic HR planning.
If companies want to evolve sustainably, employees must develop new skills through training strategies and professional solutions. PwC helps in the analysis, design and implementation of learning and staff development strategies, processes, functions and systems.
HR costs are one of the major cost blocks in companies. PwC helps companies establish a sustainable HR cost-management system. This includes the identification of cost-cutting measures, staff restructuring in the wake of organisational changes (including social plan calculations) and the optimisation of the compensation structure. PwC’s experts identify the cost implications, develop customised solutions based on that and advise on the implementation.
PwC accompanies and supports HR on the way to becoming a strategic business partner for management. The increase in effectiveness that results from professional human capital management provides companies a competitive advantage.
Knowledge management aims to build critical competitive knowledge within companies and deploy that knowledge across departments and countries to best achieve operational and strategic goals. PwC helps companies with the definition of a knowledge management strategy, the modelling and optimisation of knowledge management processes and the selection of appropriate technology.
In the face of global competition, flexibility and the ability to change play an important role. Crucial to the success of a company is how fast and how well employees can adapt to new business goals and strategies and orient their work accordingly. In projects, technical solutions are less critical to success than the ability to co-opt the employees that are working with them. On the basis of its global change management philosophy, “Making change stick”, PwC advises companies on the development and implementation of appropriate change management strategies in different change scenarios.
As a strategic partner, the HR function of a company provides the workforce necessary to reach business targets and thus boost competitiveness. To support the further development of the company, the HR function has to be strategically and business-oriented. PwC studies have shown, however, that many personnel departments do not meet the requirements for cost and quality of service. The departments are still too strongly administrative and do not have the desired impact on the business.
How efficiently does the HR department function? What share of the company’s success is it responsible for? PwC helps businesses answer these questions and supports them in analysing and improving their HR. PwC’s experts bring companies forward in their search for solutions – from strategy development to a complete restructuring of their human resources operations.
PwC supports companies in examining their HR functions so that they can focus more strongly on their core business. With tools for qualitative and quantitative analysis, PwC advises companies on analysing and finding a new direction for their personnel function, and compares results with best-practice benchmarks.
With the Saratoga database, PwC has access to one of the world’s largest HR-specific benchmarking databases. Comprehensive data on the HR programmes and HR functions of international companies enables valuable data-driven qualitative and quantitative analysis.
The Saratoga metrics system gives PwC the ability to highlight important HR issues, deliver objective and consistent analyses, identify operational weak points and evaluate employee investments. Evaluating HR efficiency and effectiveness based on benchmark data allows companies
PwC accompanies and supports HR on the path to becoming a strategic business partner for management. The increase in effectiveness that comes from professional HR management gives companies a decisive competitive advantage.
HR transformation describes an integrated consulting approach that can significantly increase personnel’s performance – by reconfiguring the HR function and overhauling HR processes, guidelines and IT support systems. The introduction and professionalization of HR’s role as a business partner together with HR shared services and centres of expertise are important elements for success. Harmonising these classic elements of a transformed HR function by means of suitable integration mechanisms assures increased functioning capability. PwC can help with HR transformation by designing and implementing suitable strategies.
|Business partners||Center of competence||Shared services||Outsourcing provider||Vendor management|
|HR self-service portal||CRM||Knowledge management||ERP||Analytics & reporting|
|Service level agreements||Key performance indicators||Benchmark and metrics||Client relationship management|
Pooling and harmonising HR services and the associated processes in shared service structures enables efficient service provision and scalability in Germany and abroad. An SSC strategy specifies the intended purpose and the SSC value proposition, a suitable service management capability promotes focused leadership. PwC assists with the conceptualisation, implementation, and transition of shared services, as well as with their development, internationalisation and optimisation.
To ensure that the services of the HR function run smoothly, appropriate IT systems are essential. PwC assists its clients as a solution-independent consultant with high methodological expertise in issues related to HR IT strategy, the effectiveness and efficiency of HR systems, software selection and HR IT compliance.
HR controlling is a key management tool for planning and managing the workforce. It provides important information for business management and promotes a focus on long-term corporate goals. PwC helps companies derive appropriate indicators from the company’s strategy, define measurement levels and determine reference values.
Equipped with intelligent data, companies get the information they need to improve their personnel policies and performance. Reliable HR data and analyses provide management not only with a solid basis for decision making, but also a valuable leadership tool. In addition, they demonstrate the contribution of the HR function to the company’s success.
When one company decides to take over another, special care is required. The risks can be high; they are usually analysed during a due diligence. Experience shows that the staff of a company – the overall workforce in general, and top management and professionals with key skills in particular – is especially central to the success of corporate transactions. The contractual obligations to employees (and in particular the occupational pensions), as well as their suitability and the prerequisites for successful integration into the new organisation, play a crucial role in the transaction.
During an HR due diligence, PwC analyses these human resources risks for companies. The result can be fed into the decision process. PwC covers all facets of an HR due diligence by working in an interdisciplinary team. HR experts, actuaries and labour lawyers work hand in hand – even across national borders.
Corporate transactions can take different forms: one company takes over another, two companies plan an equal merger or a company triggers a carve-out of a business unit that must henceforth operate independently. What all forms have in common is that the first day as a new organisation is crucial not only from the perspective of investors and other external stakeholders, but especially from the perspective of employees. Do the phones and email addresses still work? Has direct deposit been set up and is the correct amount being deposited? It will be the responsibility of a dedicated management body to ensure operational functioning from that day on. Management will also be responsible for ensuring that the strategic objectives associated with the transaction are achieved. A lot depends on both the right people being motivated to perform their duties that day and the routine processes working. Therefore, this day needs to be carefully prepared. PwC offers the following support services:
Special corporate events require special assistance. The public offering of a company is one such special event. It is important to convince potential investors of the sustainable success of the company. Incentive plans that are linked to the success of an IPO or that reward the success of a company as a result of going public are often among the demands of investors and at the same time can financially compensate the various business functions that have to cope with the heavy workload in the run-up. Young companies, in particular, make use of stock option plans, which promise high-income opportunities while protecting the company’s liquidity. Something that management in particular needs to consider as of the date of the IPO are increased requirements on compensation structure and level arising from the German Stock Corporation Act (Aktiengesetz, or AktG) and Corporate Governance Code. This usually entails not only structural but also substantive changes, as new control criteria such as total shareholder return (TSR) gain in importance with an IPO and should be integrated into the compensation systems for top management.
PwC supports companies in these tasks. PwC’s experts are skilled in all relevant issues, for example IPO readiness, corporate governance and external reporting. They work with the companies to develop the right tools and make sure that they are accompanied by appropriate governance and stringent processes.
Two become one – that sounds easier than it is. The profits associated with a merger can be realised only when all the instruments and processes are put to the test. The processes need to be redesigned so that they are suited to the new company. This applies most of all to the HR policy instruments: the HR organisation, the compensation systems and the talent management need to be evaluated, and it must be decided which solution supports the strategic objectives of the NewCo best.
The experts at PwC know from their years of experience in post-merger integration that these decisions are not made on rational criteria alone. This is reflected in the continuous change management measures associated with project management and in cultural integration. PwC’s work is informed by its knowledge that in about three-quarters of all mergers, the goals associated with the transaction cannot be achieved – because the organisations’ corporate cultures do not match. Ideally, cultural discrepancies, or at least indicators of such problems, will have already been identified in the due diligence. At the latest, they should be identified and addressed during the post-merger integration – so that in the end everyone comes out a winner and not a loser in the transaction.
Till R. Lohmann
Tel: +49 40 6378-8835
Leiterin People & Organisation, PwC Germany
Tel: +49 211 981-7680