HR innovation

Winter 2011
02 Is retirement an endangered species? 08 Balancing the pay-for-performance equation 12 Determining the value of employersponsored Health Improvement Programs 20 Multiemployer pension plans in corporate transactions: How to obtain a purchase price adjustment for plan deficits 24 Is talent in the right position for whats ahead?

Contents

Foreword Scott Olsen, US Leader, Human Resource Services Is retirement an endangered species? Jim McHale Balancing the pay-for-performance equation Brandon Yerre Determining the value of employer-sponsored Health Improvement Programs Ron Barlow and Don Weber Multiemployer pension plans in corporate transactions: How to obtain a purchase price adjustment for plan deficits Michael Sculnick Is talent in the right position for whats ahead? Skills assessments help companies build the foundation for better business benefits Sayed Sadjady and Jessica Dunham

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The C-suites waiting. Your current (and future) workforce is waiting. Are you ready?

Foreword

HR Innovation offers advanced thinking about the challenges that should be uppermost on the minds and agendas of organizations and their Human Resources (HR) leaders. Todays economic and operating environment is fraught with risks and unknowns. Its no place for the meek. The good news: more than 80% of CEOs we recently surveyed1 recognize the gravity of the situation and its implications for their people strategies.

The upshot: Its a great, albeit challenging, time to be a part of HR, where the people engine gets its juice and the entitys goals get their legs. The workforce today is more complex than ever. Gone are the days of one-earner households, one-nation economies, and one-company careers. HR is a major player in a global economy thats changing with every tick of Big Ben, every headline in Times Square, every tweet, on every street, from Boston to Beijing and beyond. These changes affect not only operations, but people and the way they do their work, leave their mark, and live their lives. Our fates are intertwined whether thats universally recognized or not. Its HR that helps drive the critical connections between the organization, its objectives, and the people who can make them happen. What faulty assumptions, stale attitudes, or unasked questions might stand in their way and yours? HR Innovations will look at current trends and their implications for meeting organizational goals while cultivating and sustaining an efficient, high-performing workforce in a dynamic organizational culture. Our authors will address HR matters

that run the gamut of todays workplace issues and ask some probing questions to get at the answers you need to move forward and pull ahead: Is retirement an endangered species? What makes performance click? Is your wellness program in good health? How can you adjust for pension plan deficits? Its 2012. Do you know where your talent is? I hope youll take some time to read our most current thinking on HR effectiveness and excellence. Is your HR function up to todays tasks? As always, your feedback and involvement is not just welcome, but encouraged as we work together to meet the challenges of your enterprise and its talent. The C-suites waiting. Your current (and future) workforce is waiting. Are you ready?

Scott Olsen US Leader, Human Resource Services

PwCs 14th Annual Global CEO Survey, 2011

HR Innovation

Is retirement an endangered species?

By Jim McHale
Will your employees outlive their 401(k)s? We all know the main

headline in the retirement arena of the last 20 years or so: the decline of defined benefit (DB) plans and the rise of defined contribution (DC) plans as the main tool for financing retirement. But this isnt another article lamenting that change or arguing that DB plans are more efficient or more effective at delivering retirement security. Regardless of whether thats true, the fact remains that most employers in many industries, having decided for a variety of reasons that DB plans and the heartburn associated with maintaining them, arent sustainable, have shifted to DC plans.
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The result? Virtually all of the financial risks of retirement have been transferred to employees. And theyre significant: investment risk, longevity risk, and inflation risk of managing retirement assets. And, although the risks of financing retirement have been transferred primarily to employees in many industries, if they dont or cant manage that risk effectively, workers will find they cant retire when they want to. While those putting in enduring careers with the same employer can deliver many advantages to the organizations they serve, they also can disrupt effective workforce successionif they continue to work only because they cant afford not to.

the balance of spending needs in retirement. To meet this objective, he needs to decide on an investment strategy and savings plan that takes into account the length of his working career and life expectancy. If we settle on a realistically ambitious savings period beginning at age 30, retirement at age 60, and a life expectancy for a 60-year-old retiree to age 83, we have an accumulation phase of 30 years and a draw-down period of 23 years. If we follow a typical retirement glide path investing approach, which calls for investing heavily in stocks at younger ages and gradually moving to bonds and inflation-hedging assets to and through retirement age, this retiree could expect to earn 7%7.5% annually before retirement and 5.5%6% after retirement.2 Based on these inputs, the employee would have to save just over 10% of earnings annually during his working years to finance 40% replacement through his life expectancy. This amount would include the employers matching contribution to a 401(k) plan and could be contributed and accumulated for most workers on a pre-tax basis. Sounds like a great plan, right? It may be a good starting point, but the plan assumes that everything will occur just as expected. If the last decade of ups and downs has taught us anything, its that things too often fail to turn out as expected. Even if markets return to their norms over a long span of years (and not all experts agree they will), we still have a lot of volatility to deal with along the way.

Where have all the savings gone? What does this mean for employees as they plan for retirement? Do employers understand the size and shape of the risks theyve transferred to employees and the impact this might have on their business? Do employees understand how to plan for retirement in this context? Do the many models and tools available adequately measure the risks involved? While its generally believed that employees tend to invest reactively and fail to save adequately, what happens to those who follow the guidance and do everything the right way? To what extent will they control the risk? Lets say a male employee targets 40% income replacement from his 401(k) plan, expecting that Social Security benefits and other savings will provide

The expected returns used in the Monte Carlo simulation are based on the 2011 capital market assumptions published by Callan Associates.

HR Innovation

The bottom line:

55% of the time, employees

end up outliving their savings, despite following a disciplined retirement savings regimen over their lifetime and following industry rules of thumb about sound retirement investing.

Note that we recognize that the debate over what constitutes an appropriate target is not universally agreed upon and is a personal matter thats based on an employees family situation, health, prospects for working in retirement, and many other factors. The focus here is on looking at the chances that a selected goal will be met and the variability of results; we should see similar variability of results if we decided that, say, a 50% goal was a better objective. So, how did things turn out for our sample employee and his 9,999 alter egos? For starters, remember that a male employee who retires at age 60 is expected to live to age 83 on average, but that happens only about 4% of the time. There is an almost 20% chance that he could live past age 90 and a more than 5% chance he could make it to 95. While this is a nice problem to have, longer life would create the need for significantly more retirement savings. Moreover, average returns over the working years also varied significantly. Although the average 30-year return in the build-up period was 7.1%, there is a 20% chance the employee would earn less than 4.6% and a 1% chance that the average 30-year return would actually be negative. Of course, theres an upside to taking risk: 20% of the time, the employee earned 9.5% or more, and in the jackpot top 1% scenario, the portfolio returns 14% or more per year. All this adds up to a wildly varying result in retirement: In some cases, the employee ends up with hundreds of thousands of dollars to leave to his heirs (if he is lucky enough to have strong investment results while working but then die young); in others, the retirement income objective is not even close to being achieved. The bottom line: 55% of the time, employees end up outliving their savings, despite

What risks does the employee in our example bear and how can we measure how these risks could affect his 30-year plan? Before we get started, its important to note that we deal here specifically with the financial and longevity risks, but workers deal with many other risks as they near and enter retirement. These include the cost and life issues connected with healthcare, long-term care, family situation (divorce and death of spouse), living independently, real estate, and securing and maintaining employment. The mathematical models we will use can tell us a lot about the impact of the potential variability of life span and market fluctuations, but they dont handle these less tangible risks.

Sizing up retirement risks To arrive at some answers, we used a Monte Carlo methodology to generate the results over 10,000 alternate lifetimes; this is basically a type of computerized coin-flip that looks at the market results each year from age 30 to death and the chance that a retiree will live or die in each year of retirement. After running these random trials, we tabulated the results, looking at each simulated lifetime and determining if the employee was successful in funding his retirement target.

following a disciplined retirement savings regimen over their lifetime and following industry rules of thumb about sound retirement investing.

Managing retirement risks As bleak as this outlook sounds, employees can avail themselves of many options to manage this risk. We looked at some of these and noted what our sample employee would have to do to improve his chances of making the retirement savings last. Note that these options have to be initiated ahead of time; if a retirement nest egg is depleted at age 85, at that point the retiree will have few avenues for rethinking strategy. Here are some things employees can do to hedge their retirement risks: Save more. Increasing the 30-year savings rate to 15% could reduce the chances of outliving savings to 30% still a risky proposition. Risk management processes often look at targeting the 5% worst case, so we follow a strategy that will allow us to weather 95% of outcomes and so be exposed to only the worst 5%. To budget for all but 5% of outcomes, a retiree would have to save close to 30% of income for a 30-year period, which would not be feasible for most workers. Work longer. If an employee is beset with sudden market drops near retirement, he or she is often forced to work longer than expected. This can help in a small percentage of cases, but what if the market drop comes after retirement? An employee may hedge the risk by planning to

work longer ahead of time in order to accumulate a reserve for potential longevity and poor market performance. Our analysis shows that working five more years past age 60 could reduce the chances of outliving savings from 55% down to 25%. Our retiree would have to work to age 70 to meet the 5% standard. Reduce consumption in retirement. If the market is not kind to an employee, he or she can also realign expectations to draw down savings more slowly in retirement, based on the size of the 30-year nest egg. Financial advisors often suggest an annual rate of withdrawal from savings that is set conservatively to allow a cushion for longevity or down markets. For instance, reducing the annual withdrawal in retirement by 20% would reduce the chances of outliving savings to 35% in exchange for the belt-tightening. To get to a 95% confidence level that he would not outlive his nest egg, the retiree would have to live without 60% of the expected income. Work in retirement. Instead of living with 20% less income, a retiree could consider supplementing income with a part-time job to make up the difference. Note that this is more realistic in the early years of retirement (and under better economic circumstances). Invest in less volatile assets. In just about any current 401(k) plan, employees can choose to allocate their retirement savings to assets that are expected to be less risky.

HR Innovation

Conventional wisdom says that less risk comes in exchange for a lower expected long-term return. If they go this route, employees need to do so in conjunction with one of the other hedges described earlier (save more, work longer, or consume less to make up the difference). These approaches can be effective in reducing the risk employees take for their retirement, but they all involve a significant adjustment to lifestyle or workforce participation. Because we started with what can be called a reasonably ambitious expectation for what a worker can save over a working life, it would be difficult for many workers to make these kinds of adjustments. They might, therefore, remain exposed to these risks as they enter or consider entering the retirement years.

the difficulty that employees have in managing retirement risk will have a growing impact on employers. Employers may find they need to offer their people more tools to manage this risk. This can be done through: Plan design Innovations in plan design, such as automatic enrollment, have helped incentivize more employees to save sooner. If employers can gain a better understanding of the choices employees are making, additional innovations may also help. For instance, would providing a smaller employee match percentage on a larger dollar base incentivize more employees to save at higher rates? How high should the automatic enrollment rate be? Are 401(k) plans the most effective and overall efficient vehicles for delivering retirement benefits? While they certainly will be the choice of many employers going forward, some employers may want to consider hybrid design approaches that balance risks in a different manner between employees and employers. For instance, Pension Preservation Plus (PPP), a PwC

How employers can help Many employees retiring today have some form of defined benefit annuity guarantee, even if it comes from a frozen plan, but as more and more employees move into their pre-retirement years with a DC-only portfolio,

Instead of living with 20% less income, a retiree could consider supplementing income with a part-time job to make up the difference.

innovation, provides elements of DB and DC plans within the employers retirement program. Market-rate cash balance plans can operate in a nearly identical manner to a DC plan in the build-up phase, but operate as a DB plan in the draw-down phase. Would such designs strike a more realistic balance for some employers? Investment innovation The conventional wisdom on retirement investing is constantly evolving as practitioners understand the risks better and experience the limitations and pitfalls of discarded past paradigms. Many employees want (or need) less of the freedom offered by selfdirection and more ways to purchase (for a reasonable cost) lifetime income opportunities. Employees and retirees have historically avoided traditional annuities because of perceived high cost and reluctance to commit a large part of their savings irrevocably. To address some of these concerns, many providers are developing retirement income or annuity purchasing options that employers can introduce into their DC programs. These include bulk purchasing of annuities through a DC investment choice option and managed account alternatives that target and maintain a stated income level from the account. To get comfortable with wide participation in these investment vehicles, employees will need to understand the tradeoffs and risks discussed in this article.

Education Building financial literacy and investment education are important objectives, but employees will need to somehow understand the risk management challenges of retirement. How do their investment and life choices interact with their long-term financial health? Whats a reasonable cost or investment return trade-off for reducing investment risk and longevity risk in retirement? Right now, employees may have a pretty good idea of the upside and downside of market risk based on their experiences of the past several years. But it will become increasingly difficult to make informed decisions as the range of choices continues to expand. Moreover, just because employees are educated about how investment works, even if it helps comply with regulations and avoid lawsuits, it doesnt mean the employees will apply the knowledge consistently or that they are equipped with feasible options to control their risks. Evolving workforce paradigms Currently, the average retirement age in the United States is around 62, which has been decreasing for decades. As longevity increases, this means that most workers will be spending over 20 years in retirement. Couple that with declining birth rates and we will be expecting an ever-shrinking workforce to support growth and productivity. Is this sustainable? Alternate approaches to managing the transition to retirement, such as phased retirement, have been widely discussed but rarely implemented. Can employers better tap the skills of retirees or pre-retirees?

Imagining a better way forward What happens to the workforce and long-term sustainability and viability if employees cant retire? If workers are thrown to the whims of forces far beyond their control, how is succession planning not also thrown into turmoil? In todays environment, its hard to imagine how most employees will have the resources necessary to reliably manage the risks of financing retirement. How will this impact broader society, the economy, and the financial markets? In moving forward to a better state for employers and employees alike, greater availability of appropriate tools (some of which have yet to be developed) must help bridge this gap. Employers may well find a competitive advantage to equipping their people with such tools and the knowledge and insight that will enable them to make good use of themand their retirement years. But first, organizational leadership will have to come to grips with the very real consequences of failing to take action today. Article contributor, David Cantor, PwC

HR Innovation

Balancing the pay-for-performance equation

By Brandon Yerre
Despite its familiarity in the workplace, the phrase pay for

performance likely means different things to different people. This lack of clarity and understanding can keep employers from meeting short- and long-term goals and employees from deriving satisfaction in their roles and careers.

For top management, performance has most often been defined by metrics commonly reported to public company shareholders or otherwise easily calculated, such as earnings per share (EPS) or total shareholder return (TSR). This has afforded top management and shareholders a clear view of the linkage between pay and the final measure of performance. But unfortunately, the means to achieving that end measure of performance were not typically included as performance measures. As for other employees, the metrics used for linking pay to performance were not always considered from a business performance perspective. In some companies, middle management and lower-level employees might have been incentivized based on overall company goals, without knowledge of how their role impacted the company as a whole. In other cases, they were incentivized based on individual performance measures that had no direct linkage to company performance, and during years of poor company performance, incentive pay was reduced or eliminatedeven for high performers. Balancing your organizations use of pay and other rewards with meaningful measures of individual performance helps create a talented, engaged workforce and an organization capable of creating long-term value. This applies to the entire organization, including top

management. A properly managed payfor-performance program should reflect: What fuels individual performance What links individual performance and organizational performance How to effectively use performance goals to achieve short-term successes and long-term objectives while managing risk

Y), who entered the workforce during the 21st century, are more likely to respond to career advancement incentives; in our interviews, this group chose training and development as their first choice among benefits three-to-one over those who opted for cash bonuses.4 When considering the most effective reward package for sparking individual performance, your organization should take into account the typical components of most reward programs: salary, short-term incentives, long-term incentives, benefits (including health insurance, retirement savings, and vacation pay); training and development, and recognition. Many organizations have also been focusing on work-life balance and offering new benefits, such as flexible work schedules, telecommuting opportunities, and sabbaticals. Although the pay in pay for performance can refer to any of the more traditional components of reward programs, your organization should look beyond its current forms of remuneration and consider whether additional approaches might work best in the long term. Regardless of the diverse composition of your workforce today in experience levels, gender, location, work style, or any number of variablesa solid understanding of what launches top-flight individual contributions will be essential to developing an effective pay-for-performance strategy.

Fueling individual performance With talent management identified as the number one focus of CEOs around the globe,3 its critical that employers weighing workforce strategies understand and apply the behaviors that enable them to attract, reward, and retain pivotal talent. The retirement savings hit inflicted by the economic downturn, combined with longer life expectancies, have kept many baby boomers in the workforce beyond traditional norms. These more deeply experienced workers now contribute side-by-side with recent college graduates and Generation X, which is establishing itself as the predominant workforce population. Amid this diversity, no single approach is likely to enable your organization to achieve its talent management objectives. Baby boomers may be more highly motivated by financial rewards, while Millennials (also known as Generation

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PwC 14th Annual Global CEO Survey, 2011 Managing tomorrows people: Millennials at Work. PwC Survey 2009
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Regardless of the diverse composition of your workforce todaya solid understanding of what launches top-flight individual contributions will be essential to developing an effective pay-for-performance strategy.

Rewards that resonate Compensating an employee with the same amount of monetary value as that created by the employee for the organization is viewed by some as the holy grail of compensation strategies. But its rare that such value can be measured. And value can be tough to grasp, particularly when its creation is not a direct, easily quantified objective, as is the case, for example, with employees whose roles are to preserve the organizations value through public relations or customer service. For top management, responsible as it is for the overall success of the organization, individual success can and should be measured by organizational success. Even so, determining the value created by top management is no easy task. Because TSR and other measures based on share price dont fully take into account the effect of the market in those measures, high-level managers can wind up under- or overcompensated. And, while measures of performance that can be controlled, such as reducing operating expenses, provide far superior linkage between individual and organizational success, theyre still not perfect. With the lines between individual performance measures and organizational performance often dotted, the

term pay for performance, while hardly alien, isnt always thoroughly understood or effectively applied. To strike the right balance, leaders need to understand the behaviors of each employee group responsible for creating or preserving organizational value and use that knowledge to develop reward programs that encourage those behaviors. Consider, for example, a payroll manager whos responsible for timely and accurate payroll submissions to ensure that employees are paid as expected. This managers contribution prevents loss of productivity if employees discontinue work to determine why they werent paid on time. High performers in this role might, as a rule, effectively manage their time, use proper planning, and efficiently apply technologies. As such, the payroll manager can be rewarded based on having achieved measurable objectives in these categories. If the payroll manager is a Millennial, a company-sponsored trip to an annual payroll conference, which sweetens the package with Millennial-minded training and recognition, can be a crucial ingredient in rendering a reward that resonates. Your organization can fully assess its linkage between individual and organizational performance by conducting competency assessments and interviews with critical stakeholders, with the approval and support from appropriate organizational leaders.

Performance goals boost shortterm successes and long-term objectives, and manage risk Once you have an organizational understanding of individual performance boosters and the linkage between individual and organizational performance, individual goals should be established with consideration as to how theyll support organizational goals. Choosing the right short-term and long-term goals without creating excessive risk for the organization presents the final challenge in the mission to balance the pay-for-performance equation. Most organizations set short- and longterm goals as part of their business plan, providing the basis for individual goals and incentive pay programs. Organizational goals, which often

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pertain strictly to financial performance, are used to set similar financial goals for the workforce. But armed with the knowledge of how employee behaviors fuel organizational performance, you can determine individual goals that will encourage positive behaviors that will propel the enterprise toward its strategic objectives. When setting short-term goals for employees, the focus should be trained on whats tangible and achievable. A goal of increasing EPS by a specific percentage for the year will be more effective and better support a highperforming culture when rewards reflect achievements that fall within their span of control. Long-term employee goals should parallel and contribute to the organizations vision for sustainable financial success. For example, since CEOs place talent management at the top of the corporate agenda, the successful implementation of a strategy to attract,

reward, and retain pivotal talent should be viewed as a long-term goal of top management. Although this strategy might not provide staggering return in the short-term, it can position the right workforce and the enterprise to deliver on long-term goals. The success of this goal can be measured statistically using workforce metrics such as the turnover rate of priority talent and employee engagement survey feedback. The goal-setting process should also take into account the importance of risks and rewards. On the one hand, risk management can help keep the process consistent with the companys risk profile and contain and reduce behaviors that might be deemed excessively risky. On the other hand, performance goals that languish without achievement-based rewards can quickly lose impact and relevance. A performance-funded plan is an effective way to make sure that monies will be available to recognize employee achievement. This kind of

funding mechanism can serve as an operational self-fulfilling prophecy by setting performance goals and payout levels based on formulas that depend on corporate success.

Keeping it simple Many factors contribute to establishing and maintaining a meaningful and effective pay-for-performance program. But program management neednt be overly complicated. A successfully designed plan should be meaningful and simple. It wont always be feasible or cost effective to set specific goals for every employee, or even every employee group. But if your organization understands and communicates the linkage between individual performance and organizational performance, you can create a sense of concrete continuity for employees, management, and investors alike.

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Determining the value of employersponsored Health Improvement Programs

By Ron Barlow and Don Weber
Over the last decade, employers, led by those with more than 5,000

employees, have been instituting a variety of health management programs designed to improve employees (and their dependents) health and productivity. These Health Improvement Programs, ranging from worksite wellness, on-site clinics, health coaching and advocacy, disease management, and clinical management, have vastly expanded during the last three to five years, even though their value is still often not fully understood.

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Among large employers, 88% responding to the 2011 PwC Health and Well-being Touchstone Survey5 said they offer some type of wellness program, and 86% offer disease management programs to healthcare benefit program participants. While respondents tended to doubt program effectiveness, most planned to double down on their investment: 55% believed their wellness programs were minimally or not effective, but 66% were planning to increase their investments in this area. This raises a crucial question: How, exactly, is program effectiveness being measured? According to a 2010 joint National Business Group on Health and Fidelity Investments survey,6 only one-third of employers have measurable goals/targets for their Health Improvement Programs, and 59% of employers dont know their return on investment (ROI). Determining a CFO-credible methodology of measuring the cost savings, health improvement, or an overall ROI in these programs has been complex, confusing, and at times, simply non-existent. Many CFOs and other business leaders question the value of these investments and are asking for proof of a positive ROI and clear, understandable, and defensible analyses that demonstrate such proof.

The problem is that most HR departments either have simply not measured their savings or ROI, or theyre depending on the healthcare vendors to do sovendors who have a vested interest in the programs. Often, these vendor-provided ROI demonstrations use either overly simplified methodologies or extremely complex methodologies, both of which produce questionable results. In addition, most of these demonstrations rely on a single measurement or a very limited set of measurements, which increases the risk of producing inconclusive results. The good news? Recent advances in data/information availability, together with advanced data analytic methods, can result in a solid set of ROI measurements, provided companies are willing to invest not only in the wellness programs, but in measurement efforts that effectively gauge their merit. These approaches can be as simple as measuring the reduction in negative medical events, such as hospital admissions or emergency room visits for those enrolled in a condition-specific disease management program. Or, they can be more complex, population-wide comparisons. Choosing the right methodology for your company will depend on the Health Improvement Programs being evaluated, data and resources available, and the degree of precision desired by management.

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PwC Health and Well-being Touchstone Survey, 2011 Joint National Business Group on Health/Fidelity Investments Survey, 2010
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Measurement methodologies At their core, ROI measurements hinge on the determination of savings. For Health Improvement Programs, savings can be based on medical claims cost only or more holistically estimated to include items such as productivity or other business results. Simply put, if it can be demonstrated that the effects of a particular healthcare program reduced the companys costs over what they would have been without the program, we have measureable savings and the basis for a valid ROI measurement. However, the real challenges lie in knowing what the costs would have been without the program and knowing whether observed changes represent a true cause and effect impact. There are many methodologies in use today to measure the effectiveness of Health Improvement Programs, with varying degrees of applicability. Generally, we can group them into the following four categories:

1. Test/control group methods (participant vs. non-participant) One general category of measurements is based on the comparison of the change in costs (i.e., trend rate) or other statistics between a Test Group and a Control Group. The Test Group represents those members who participated in the particular Health Improvement Program under review and the Control Group usually comes from those who did not. As described in the following chart, the Control Group can be adjusted in various ways to arrive at a better comparison. Correct determination of the Control Group is one key to arriving at a successful measurement under the Test/Control Group analysis method. Techniques for determining the Control Group have evolved in recent years as additional data elements and more advanced analytic methods are deployed.

Unadjusted Aggregate Method (simpler/less accurate)

Compares the emerging trend rate of those using the program vs. those who dont use the program, with the savings being the difference in trend rates

Demographically Adjusted Aggregate

Same as prior approach, except the groups are adjusted based on age/ sex and other demographic factors

Control Sub-Group Method (complex/more accurate)

Creates a sub-group from the control group that best matches the characteristics of the test group, normalizing the two populations, and then compares the emerging trend rates of each group

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The most basic and common method is what we call the Unadjusted Aggregate Method. This method uses the observed trend in the Control Group to adjust the Test Group results, which are then compared to the Test Group actual results to determine savings. Exhibit 1 demonstrates how this conceptually works. Essentially, this method assumes that the change for the Control Group (those who did not participate) is an accurate predictor of what would have happened to the Test Group (those who did participate) without the program in place. This approach requires the least amount of information, but ignores what could be significant differences between the two groups in terms of age, gender, and other demographic factors.

For example, if only young, single employees choose the program, and we see a large cost trend difference when compared to older employees who have families and who did not participate, then the measured savings may not be an accurate reflection of program effectiveness alone. Accounting for differences in demographics between the Test and Control Groups adds a degree of precision in the Aggregate Method. This is accomplished by adjusting the change in costs being measured based on the average demographic indicators. Demographic differences are usually accounted for by using standard actuarial values to reflect differences in age, gender, family status, and sometimes geography. Exhibit 2 shows how this conceptually works.

Even when the Control Group is adjusted for differences in demographics, differences can be present due to other factors, most notably health status and selection. Two people with exactly the same demographic profile can have markedly different health statuses and therefore significantly different cost and trend levels. Also, voluntary participation introduces an element of selection. Often, someone who chooses to participate in a wellness program might be predisposed to making lifestyle changes based on a desire to improve health status; this can make it seem as if the program is more effective than it really is.

Exhibit 1: Example of Unadjusted Aggregate Method

(Assume a 1/1/2010 effective date for the employee-only Health Improvement Program and a one-year before & after look.) Test Group (2010 Program Participants) Number of employees 2009 costs per employee per year 2010 costs per employee per year Actual trend rate Estimate of what the 2010 costs would have been, absent the program = $12,000 x 1.085 Estimated savings: $13,020 $12,600 = $420 per employee per year Estimated total savings: $420 x 1,000 = $420,000 1,000 $12,000 $12,600 5.0% $13,020 Control Group (2010 Program Non-Participants) 9,000 $8,000 $8,680 8.5%

$420 $420,000

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Accounting for such factors can be complicated. Some of the latest techniques involve using multivariate regression analysis to determine which factors are most closely correlated with the cost levels or other items being measured. Then using the results, a new Control Group is created from the non-participating population that best replicates how the Test Group would have performed if the program had not been in place. Factors that can be considered in the multivariate regression analysis are: Age Gender Family status Level/salary Risk score Total healthcare costs medical Total healthcare costs prescription drugs Health risk assessment (HRA) completion and results Biometric measurements Chronic condition category Co-morbidities Preventive services used This new Control Group is a subset of the initial Control Group population that best replicates the underlying tendencies of the Test Group, apart from the influences of the healthcare program being evaluated. Some degree

Exhibit 2: Example of Demographically Adjusted Aggregate Method

(Assume a 1/1/2010 effective date for the employee-only Health Improvement Program and a one-year before & after look.) Test Group (2010 Program Participants) Number of employees 2009 costs per employee per year 2010 costs per employee per year Actual trend rate Demographic factors: 2009 demographic factor 2010 demographic factor Demographic impact on trend Adjusted trend to apply to test group = (1.085 x 1.040 1.036) 1 Estimate of what the 2010 costs would have been, absent the program = $12,000 x 1.089 Estimated savings: $13,066 $12,600 = $466 per employee per year Estimated total savings: $466 x 1,000 = $466,000 1.214 1.262 4.0% 8.9% $13,066 0.976 1.011 3.6% 1,000 $12,000 $12,600 5.0% Control Group (2010 Program Non-Participants) 9,000 $8,000 $8,680 8.5%

$466 $466,230

of experimentation may be necessary to find the best set of factors and the match thresholds (i.e., five-year age buckets instead of exact year match for age) that will be used to create the subgroup. See Exhibit 3 as an example. Short of a pure randomized clinical sampling, which is not a viable solution for most employers, no test/control group method is scientifically perfect. But if the data is available, this multivariate regression method appears to do the best job of aligning the Control

Group with the Test Group for an accurate assessment of the impact of the Health Improvement Program. The Control Sub-Group Method can be expected to yield a better measurement of the true effects of the healthcare program than the Unadjusted Aggregate Method or Demographically Adjusted Aggregate Method. However, the Control Sub-Group Method is more data- and labor-intensive. In some cases, where the necessary data is not available or the size of the population is not large enough, the Control Sub-Group Method may simply not be feasible.

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2. Population-wide analyses (also called historical control analyses) Population-wide analyses usually look at trends in undesirable health utilization statistics across the entire population. Also referred to as a Measurement of Negative Medical Events, this methodology uses the population-wide analysis of events, such as hospital admissions or emergency room visits, to measure the value of specific Health Improvement Programs. It can also include measurement of changes in the number of health risks or occurrences of certain disease states. Care should be taken to adjust for differences in population levels, demographics, plan changes, and other factors from year to year that can impact observed trends. Comparison to previous years events for the identified groups, or normative data, if available, can also be helpful in determining whether the observed

trends represent a measurable reduction in cost. The types of healthcare statistics that can be included in the population-wide analyses and tracked over time include: Medical claims Average risk scores Number of sick days Number of hospital admissions Number of hospital readmissions Number of ER visits % of members having a physical exam % of members getting immunizations Number of new diabetic cases Number of new renal failure/ dialysis cases

Number of new cardiovascular disease cases Number of heart attacks Number of strokes Number of back surgeries Number of knee replacements Number of diabetes-related complications, such as amputations Number of screening tests completed, such as HbA1c, foot exams, lipid panels, or cancer screenings Wellness program participation rates HRA completion rates Number of health risks identified through the HRA Biometric results, such as weight, BMI, waist size, blood pressure, cholesterol levels, etc.

Exhibit 3: Example of Control Sub-group Method

(Assume a 1/1/2010 effective date for the employee-only Health Improvement Program and a one-year before & after look.) Test Group (2010 Program Participants) Number of employees 2009 costs per employee per year 2010 costs per employee per year Actual trend rate Estimate of what the 2010 costs would have been, absent the program = $12,000 x 1.110 Estimated savings: $13,322 $12,600 = $722 per employee per year Estimated total savings: $722 x 1,000 = $722,000 1,000 $12,000 $12,600 5.0% $13,322 Initial Control Group (2010 Program Non-Participants) 9,000 $8,000 $8,680 8.5% Adjusted Control Group (Sub-group of 2010 Program Non-Participants) 1,000 $11,800 $13,100 11.0%

$722 $722,034

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3. Longitudinal studies of participants (also called pre-post cohort analyses) In this methodology, members working to manage a given condition, such as diabetes, can be analyzed by use of certain identified statistics or medical events (see list above) during a base period; the impact of the program is then determined by analyzing the same group after program implementation to determine if there was a reduction in the identified medical events. The average cost of the medical events can be calculated using the employers own data or normative data. The methodology does require the employer and the vendor to work together to identify the group to be measured, the diagnostic codes to be used, and the events to be measured. For this measurement, care needs to also be taken to ensure that the results observed are not significantly influenced by regression to the mean (defined below). 4. Qualitative assessments In addition to the quantitative analyses described above, it may often make sense to also include a qualitative analysis that assesses such factors as program features, activities, accomplishments, employee feedback surveys, and self-reported results. The qualitative analysis is important to complement and explain the numbers and to suggest alternative directions for the quantitative analyses as well as provide insight to possible program refinements.

A balanced scorecard approach Unfortunately, there is no silver bullet. There are pros and cons for each of the analytic methods described above. As such, it may make sense to include some or all of the methods into a set of measurements that collectively can provide a balanced assessment of the effectiveness of the Health Improvement Programs. Using multiple analyses reduces the risk of having inconclusive or misleading results. And aggregating results from various analyses into one report or scorecard can be helpful in understanding the big picture, especially when monitoring progress over time. In this effort, its important to clearly lay out and understand the strengths and limitations of each method used, which may vary based on the data and the programs in place. Corporate leadership, including the Finance Department in particular, should be involved when deciding the overall structure of the measurement and ROI reporting.

2. Data credibilityCredibility should be a primary consideration in any analysis of healthcare claims data. The more data thats available and the cleaner it is, the more credible will be the results of the analysis and the more precise your savings estimate. 3. Years to be included in the studyIts preferable to have two years of data prior to the Health Improvement Program implementation date as a sound basis for measurement. This is especially true if the number of participants is not enough to be considered fully credible with one year alone. At least one year of post-implementation data is usually needed to draw any significant conclusions on the effectiveness of the Health Improvement Program, and multiple years are preferred for observing lasting effects. 4. Populations to be included in the studyGenerally speaking, all employees and dependents who have access to the Health Improvement Program and are therefore considered eligible should be included in the study. 5. OutliersWhen analyzing claims data, outliers (high-cost claims) may sometimes skew results. Establishing a claims amount threshold, say $50,000 per year, and then examining the results with and without the claims capped at this threshold can be beneficial in determining the extent to which outliers are affecting results. 6. Savings criteriaReductions in medical claims paid is commonly used to measure savings. However, other measures can include change in certain health utilization stats (e.g., hospital admissions), change

Measurement considerations These areas should be considered when conducting an analysis of the effectiveness of Health Improvement Programs: 1. Data sourcesDepending on the type/scope of the Health Improvement Program and the extent of the measurement analysis, data sources can include medical and prescription drug claims extracts, health risk appraisal information, biometric screening data, risk scores (calculated from the other data), eligibility data, absence and disability claims extracts, and other business results data.

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The use of an independent advisor to provide a qualified second opinion can often be helpful in determining the correct methodology and deriving assistance with calculations.

in certain health indicators (e.g., risk scores or BMI), reductions in the number of persons with chronic conditions (e.g., diabetics), or changes in productivity or other business measures. Generally speaking, the use of changes in utilization is preferred over changes in costs because Health Improvement Programs are primarily designed to affect healthcare utilization. Focusing on utilization also minimizes the effects of outliers (high-cost claims), changes in provider reimbursements, and healthcare inflation. If we think of costs as being expressed by the simple equation Total Cost = Utilization x Unit Cost, then focusing our measurement analyses on the changes in healthcare utilization can still be translated into cost savings at the end of the day. 7. Criteria for Health Improvement Program participationHealth Improvement Programs often reflect multiple levels of involvement. For some eligible members, participation may go no further than receiving an initial contact; others might have responded with some interest, be fully engaged, or have graduated from the program. Performing several iterations at various levels of the participation criteria may be warranted.

8. Diagnoses to be excluded, such as maternity and deliveryAs with outliers, the inclusion of members who have certain diagnoses or conditions can sometimes skew results. These conditions, such as maternity and delivery or accidents, are usually unrelated to the Health Improvement Program. Again, it may be beneficial to examine results with and without the members who have these identified diagnoses. 9. Regression to the meanIn statistics, regression to the mean is the phenomenon that if a variable is extreme on its first measurement, it will tend to be closer to the average on a second measurement. For analysis of health outcomes, this comes into play, for example, when looking at a closed group of members in a particular disease category. In the first year, high claims could have triggered program participation. But a look at these same individuals in the second year will show that some naturally tend to have more average claims. Without an influx of new high-cost members in the second year, it will appear as if improvement in costs occurred. Care must be taken in any analysis of Health Improvement Programs to ensure that this phenomenon is not skewing results.

Analytics provide the path to tracking value The measurement of Health Improvement Program value can be a daunting task for any plan sponsor; often, a purely scientific approach is simply not possible because what is being evaluated is often something that did not occur. In a post-reform era of employer health plans, designing costeffective programs will remain a top priority, and by applying the analytic approaches described here, employers can begin to produce at least a reasonable estimate of the value of various programs. In most cases, the use of several methods and multiple iterations under varying sets of assumptions is useful in understanding the range of possible results. The use of an independent advisor to provide a qualified second opinion can often be helpful in determining the correct methodology and deriving assistance with calculations. But these analytic techniques can deliver more than a calculation of savings and ROI. Thoughtful analytics can also provide you with a framework for the continual tracking and improvement of the value of your programs and for determining which programs should be enhanced, altered, or discontinued.

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Multiemployer pension plans in corporate transactions: How to obtain a purchase price adjustment for plan deficits
By Michael Sculnick
Deal professionals should proceed with caution when evaluating

businesses that participate in multiemployer defined benefit pension plans. Many plans face huge unfunded liabilities and have mandated higher contributions for the next 10 to 15 years in an attempt to improve their financial status. In addition, multiemployer plans (MEPs) carry greater risk than single-employer plans because the stronger participating employers in a plan may have to pay the costs for weaker employers who become unable to pay their required contributions.

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About multiemployer pension plans MEPs are typically established by a union with which employers in the same industry have collective bargaining agreements. These plans have the advantage of enabling employees to earn benefits and become vested while working for various companies. The arrangements are prevalent in the building and construction trades, trucking, certain manufacturing sectors, grocery stores, and other service-related industries. About 10.4 million participants are currently covered under some 1,460 plans throughout the United States, according to the 2010 Annual Report of the Pension Benefit Guaranty Corporation (PBGC).7 MEPs have suffered from the same problems as single-employer plans, but their all for one, one for all structure presents its own distinctive challenges. Lower than expected rates of return of assets in MEPs, smaller numbers of active employees supporting the plans, benefit improvements from earlier years, and other actuarial losses all conspire to adversely impact their funding ratios. About one-third of all MEPs are now less than 65% funded. Unfunded liabilities in MEPs are the measure of an employers withdrawal liability: the amount of the exit payment thats required when an employer ceases to participate in the plan due to plant closings or substantial reductions in employment levels. If a

participating employer fails to pays its withdrawal liability due to bankruptcy, the other remaining employers become responsible for paying the benefits promised to all participants, including those of the bankrupt employer. Thus, employers that participate in MEPs are not in full control of their own financial destiny. The PBGC, a federal agency, acts as an insurer of last resort to provide liquidity to plans that are insolvent or that undergo a mass termination.

they need to assess more accurately the impact of MEPs on the business. Roughly equal numbers of plans were considered to be red, yellow, or green zone plans in 2011, although many green zone plans achieved that status by taking advantage of funding relief enacted by Congress the previous year.

The impact of pension reform The Pension Protection Act of 2006 mandated a host of new MEP requirements. The funds must now monitor their current and projected funding status and determine whether theyre in endangered or critical status, commonly referred to as red or yellow zone; a plan is considered green zone if its neither endangered nor critical. If an MEP is in the yellow or red zone, it must adopt a funding improvement or rehabilitation plan that calls for a mix of increased employer contributions and reduced benefit accruals. Additional disclosure requirements also make it easier for participating employers (and prospective buyers) to assess the current and future financial status of the plans. Recent action by the Financial Accounting Standards Board (FASB) will impose additional footnote disclosures in generally accepted accounting principles (GAAP) financials that enable users to find the information

Implications for deal professionals Buyers have traditionally attempted to secure a purchase price reduction equal to the potential withdrawal liability, arguing that the withdrawal liability represents a fair measure of the underfunded status of the plan up to the date of sale. Sellers argue that withdrawal liability is purely contingent on a future event within the control of the buyer, and thus an inappropriate basis on which to adjust purchase price. PwCs experience has been that an argument based solely on withdrawal liability has limited success in obtaining a purchase price reduction from sellers, especially if the buyer intends to continue operating under the collective bargaining agreement and make contributions into the plan, or the plan is relatively well funded (green zone). Buyers can employ two better approaches to arguing for a purchase price adjustment for an underfunded MEP: one based on a debt-like (enterprise value) analysis and the other based on a quality-of-earnings adjustment.

Pension Benefit Guaranty Corporation 2010 Annual Report

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$ in millions XYZ multiemployer plan

A Funding liability 10.0

B Current deficit funding 0.6

C Deal multiple* (B) 4.2

D Net funding liability (AC) 5.8

be adjusted for taxes. If the buyer were using a discounted cash flow analysis, future earnings should be reduced to the extent that future employer contributions are required to increase. The quality-of-earnings approach will usually not meet with any success when a plan is in the green zone, absent any authoritative measure of required future contribution increases. Also, if projected contribution increases are not materially higher than the level of inflation projected for the cost of goods sold in the valuation model, no purchase price adjustment will be warranted.

Enterprise value: The first approach is to estimate the employers net funding liability by calculating the companys share of the plans long-term funding deficit, reduced by the deal value of the portion of the employers contribution thats used to pay off the deficit. This approach treats the companys participation in an MEP in the same way that buyers typically approach single-employer plans. Assume, for example, that the companys share of the funding deficit is $10 million [(A) in the chart], measured using long-term funding assumptions and the market value of assets. Annual employer contributions of $1 million per year are used 40% for new benefits (service cost) and 60% to pay off the deficit [(B) current deficit funding of $0.6 million]. At a deal multiple of 7, the enterprise value of the current deficit funding is $4.2 million, and buyers should argue for a purchase price adjustment of $5.8 million, rather than the full $10 million deficit [(D) net funding liability] on the theory that $0.6 million is already included in the P&L above the line and should be treated as interest on the deficit. Note that this amount is on a pre-tax basis, so any adjustment may be

tax-effected. A similar approach is to add back (B) from the P&L if a discounted cash flow model is being used. The price-adjustment approach based on quality of earnings asserts that current earnings are overstated to the extent that future contributions will significantly increase under the terms of a funding improvement plan. Although theres no consensus on how to measure the extent to which earnings are overstated, weve used the practice of estimating the steady-state level of contribution increase needed immediately to achieve the same level of funding improvement as called for in the more gradual funding improvement plan (where contributions increase each year on a compounded basis over the term of the funding improvement plan). For example, assuming that a onetime increase of 100% is needed not uncommon for poorly funded plansongoing contributions would be $2 million per year instead of $1 million (as in the earlier example) on a pro forma basis. At a sample deal multiple of 7, a buyer will argue for a $7 million reduction to purchase price. Note that this figure would not

Getting the right purchase price adjustment for underfunded MEPs With a convergence of actuarial losses adversely affecting MEP funding ratios, buyers need to carefully assess their approach to seeking MEP purchase price adjustments. They should closely examine the funded status of MEPs and the prospect for increased contributions required under a funding improvement plan. No single approach is generally accepted for achieving a purchase price reduction. But by looking through the lens of a variety of approaches, the parties can more easily reach an agreement reflecting the reality that poorly funded MEPs should not be ignored in transactions.

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How carefully are you dealing with the MEP in your deal?

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Is talent in the right position for whats ahead? Skills assessments help companies build the foundation for better business benefits
By Sayed Sadjady and Jessica Dunham
Companies need the right talent in the right places.

This has always been true, but it has never been more critical. Companies must reinvent themselves to survive, compete, and grow. Without key talent in the right positions, companies may fumble or miss opportunities to innovate, create value, and differentiate themselves from competitors.

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The talent landscape is changingquickly Many companies are already grappling with the global talent crisis, discovering that the skills that were critical for success just a few years ago are not the skills needed today. For many companies, theres a mismatch between where demand is and where critical talent resides. Company leaders need to make sure theyre placing talent where they can be most effective and create the most value. First, they need to know what skills and competencies existing workers have. The stakes are high, as the market slowly recovers and the pace of mergers and IPOs gains momentum. A proper skills assessment can help an organization understand its employees competencies and identify current and possible future skill gaps. This can help companies align their talent and workforce development plans to business objectives and promote greater efficiency, productivity, and retention. After a period of cost cutting, hiring freezes, and budget constraints, companies are seeing new opportunities to grow, innovate, and compete. However, many leadersin the executive suite, in the human resources function, and at the head of business unitsfear their organizations wont have the right people with the right skills to execute day-to-day operations and plan for the future. Talent is a major concern among CEOs, according to PwCs 14th Annual Global CEO Survey: 83% of CEOs say their companies will make some or major changes to their strategies for managing people.8

While we applaud leaders for putting the talent crisis at the top of their agendas, we still believe that many companies do not understand how to create a sustainable talent management strategy that will serve their companies over the long term. Many talent discussions center on rewards and incentives for keeping current talent engaged, reducing the risk that employees will leave as the job market improves and new opportunities emerge. But how do companies address these concerns when they dont have an accurate understanding of who their talent is? We believe that companies should begin by asking two very basic questions: 1. What skills does the company need to advance its business objectives? 2. Does the key talent reside within the organizationand, if so, is it in the right positions? Answering these critical questions will help companies create a sustainable talent management framework that improves retention, engagement, and productivity. But the reality is that many companies do not understand who their key talent is, and have no systematic methodology for analyzing skills and aligning them to business objectives.

PwC 14th Annual Global CEO Survey, 2011

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Whats at stake? As we emerge from the recent recession, companies likely do not know where their talent is. Whats more, key talent may feel it is time to leave for new opportunities. After years of salary freezes and layoffs, many workers now feel stretched and demoralized. We are beginning to see signs that workers are reaching their limitsnon-farm business sector labor productivity decreased at a 0.7% annual rate during the second quarter of 2011.9 And even though unemployment remains high, voluntary turnover is rising in the high-performer category, increasing from 3.7% in 2009 to 4.3% in 2010.10

At the same time, these early days of economic recovery will be critical for companies eager to rebound from the recession. The market for mergers, acquisitions, and new public offerings seems to be recovering from the lull of previous years. Investors expect nearly $15 billion in initial public offerings in 2011, compared with slightly over $5 billion in 2010.11 Merger and acquisition activity rose 14.2%, from $773 billion to $833 billion, from 2009 to 2010, following two years of declines.12 When new opportunities arise, will companies have the right talent in the right place to seize them? Will they discover too late that they havent taken steps to retain workers with key skills or to fill skills gaps through hiring and training?

CEOs who anticipate changing strategies for managing talent over the next 12 months, according to PwC 14th Annual Global CEO Survey

No change > 17%

Major change > 31%

Some change > 52%

9 Bureau of Labor Statistics, Productivity and Costs, Second Quarter 2011 (Non-Farm Business), September 1, 2011 10 PwC Saratoga 2011/2012 US Annual Human Capital Effectiveness Report, 2011 11 PwC Private Equity Sector Trends Analyst Briefing, March 2011
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12 Ibid

The case for skills assessments To be resilient in the face of change, every organization needs an accurate inventory of the capabilities of their talent and how those capabilities align with their business and functional strategies. A skills assessment is a comprehensive program of interviews, tests, benchmarking analyses, and other services designed to help a company assess the skills and capabilitiesthe talent possessed by its people. Leading companies use skills assessments to: Make sure the talent in pivotal roles aligns with the organizations leadership competencies Identify opportunities for training and development Identify talent gaps that may be filled through hiring or internal development Benchmark the organization against its peers Prepare for business combinations or organizational structures Validate development strategy

Real clients, real value: Setting the path for future growth
Issue: An international power company needed to assess its talent skills in

advance of a major corporate and finance function realignment.

Action: PwC helped develop competency models and performed one-on-one

assessments. We reported back to more than 750 individuals, 30 leaders, the CFO, and the audit committee. We made clear recommendations about functional processes in leadership and finance.
Impact: With PwCs help, the company was able to identify the gaps in its

collective skill set and fill them through strategic hires and employee development. The company also began taking steps toward succession planning and identified key talent in pivotal roles for strategic rewards. PwC worked closely with the company to develop a new training curriculum for senior management that aligned to organizational goals and the new competency models.

Real clients, real value: Saving $50 million a year

Issue: A top health insurance company needed to redesign the talent

management model in its procurement function for greater efficiency, compliance, and savings.
Action: PwC helped assess the clients organizational state, design a new

model, create a roadmap for improvement, and craft a clear governance policy with control procedures. We also helped define job descriptions. The skills initiative played a large role in this effort, as it helped identify talent and evaluate existing workers suitability for newly designed jobs. We assessed what skills the client had and what talent it needed to add through strategic hiring or internal development.
Impact: The organizational restructuring saved the company $50 million a

year and created new job opportunities, both for people within the organization and outside talent. The organization now has clear metrics for measuring its performance.

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How do I know which skills and talents are important to my company?

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How skills assessments fit into overall talent strategy Skills assessment is the analysis that allows an organization to build a stronger, smarter, more sustainable talent strategy. When an organization knows where its talent is, it can begin asking (and answering) questions such as: What are the pivotal roles in our organization? Do we have talent in those pivotal roles? If not, how do we get talent there? How can we tap and develop talent pools from key demographics, Millennials, for our long-term growth? How do we measure return on investment from talent? Where are we losing key talent? How do we keep talent engaged? How do we reward talent? What non-financial rewards are we using to retain talent? How do I know what skills and talents are important to my company? Just as no two companies are the same, no two companies will require the same skills from its talent and leadership.

Important leadership competencies While specific companies will need their unique set of leadership competencies, below you will find some high-level competencies to consider when performing a skills assessment of leadership: Ability to set direction Innovative Strong communication skills Motivational and inspiring to people Decisive Trusting and good with relationships These exercises are not easy, calling as they do for intense organizational introspection, short- and long-term strategic outlooks, and challenging questions. An objective perspective can be a critical ally in making the right calls amid complicated changes, turbulent times, and committed competition. Where does your organization stand? Now is a good time to get some answers. A solid skills assessment is a good place to start.

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About PwCs Human Resource Services (HRS)

As a leading provider of HR consulting services, PwCs Human Resource Services global network of 6,000 HR practitioners in over 150 countries brings together a broad range of professionals working in the human resource arenaretirement, health & welfare, total compensation, HR strategy and operations, regulatory compliance, workforce planning, talent management, and global mobilityaffording our clients a tremendous breadth and depth of expertise, both locally and globally, to effectively address the issues they face. PwC is differentiated from its competitors by its ability to combine top-tier HR consulting expertise with the tax, accounting, and financial analytics expertise that have become critical aspects of HR programs. PwCs Human Resource Services practice can assist you in improving your performance across all aspects of the HR and human capital spectrum through technical excellence, thought leadership, and innovation around five core critical HR issues: reward effectiveness and efficiency; risk management, regulatory, and compliance; HR and workforce effectiveness; transaction effectiveness; and global mobility. To discuss how we can help you address your critical HR issues, please contact us.
Scott Olsen Principal US Leader, Human Resource Services (646) 471-0651 [email protected] Ed Boswell Principal US Leader, People and Change (617) 530-7504 [email protected] Billy Owens Partner Global Leader, International Assignment Services (704) 347-1608 [email protected]

HR Innovation Contributors Jim McHale (646) 471-1520 [email protected] Brandon Yerre (214) 999-1406 [email protected] Ron Barlow (312) 298-3056 [email protected] Don Weber (678) 419-1417 [email protected]
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Michael Sculnick (312) 298-4060 [email protected] Sayed Sadjady (646) 471-0774 [email protected] Jessica Dunham (617) 530-5760 [email protected]

Please visit our website at www.pwc.com/us/hrs or scan this QR code:

www.pwc.com/us/hrs

2011 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PwC US helps organizations and individuals create the value theyre looking for. Were a member of the PwC network of firms with 169,000 people in more than 158 countries. Were committed to delivering for both territory and global quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/us. NY-12-0335