HR Shared Service Implementation: update to school of medicine Faculty Council

1. HR Shared Service Implementation: update to school of medicine Faculty Council David Odato March 14, 2013

2. Contents • Status of UCSF Human Resources • Service data and feedback • Funding model highlights

3. Status of UCSF Human Resources • HR shared service has been fully operational for almost a year • Final implementation was completed May 2013 • We have learned a lot, addressed many challenges, and know we have areas to improve • Key lessons include • Wide variation in campus practice and policy interpretation • Leads to compliance challenges in some cases • There are as many ways to perform HR work as there are departments • Staff joined the organization with widely varying skills and knowledge • Investments in technology will be critical to increasing efficiency and reducing costs over time

4. UCSF HR Goals • HR leadership has created an Action Plan based on our leadership goals and customer feedback • Key foci include: • Building a culture that aligns exceptional customer service and compliance • Standardizing processes for consistency and efficiency • Improving communication to customers about HR activities, policies and procedures • Providing departments and ORUs with accessible, easy to use tools for achieving their business needs vis-à-vis HR • Developing the HR staff’s broad business competencies as well as technical knowledge and skills • Measuring and reporting on our performance • These are high priorities for the current year, but we recognize significant change takes time and will be ongoing

5. UCSF HR Advisory Board • The Advisory Board advises the AVC HR on priorities, processes, performance, budget and services of UCSF Human Resources. 2012-2014 Members Client Departments • Maye Chrisman, Medicine • Maria Friciello, Bioengineering & Therapeutic Sciences • David Gardner, Diabetes Center (Academic Senate representative) • Angela Hawkins, Campus Life Services, Co-Chair • Penny Kniery, Biochemistry & Biophysics • Jane Meier, Obstetrics & Gynecology • Suzanne Murphy, EVCP • Peter Sargent , Cell & Tissue Biology/SOD Dean’s Office(faculty representative) • Richard Secunda, SOM Dean’s Office, Co-Chair Executive Sponsors • Sally Marshall, Vice Provost Academic Affairs • John Plotts, Senior Vice Chancellor Finance and Administrative Services UCSF HR – Ex officio • David Odato, AVC HR • Cynthia Lynch Leathers, AVP Academic Affairs • Mike Tyburski, Director HR Specialty Center • Esther Carter, Service Center E Director • Mike Wang, HR Business Services Manager

6. Service Data and Feedback Customer Survey Service Request System Magical PAF Machine Advance

7. Customer Satisfaction, October 2012 Faculty All Customers • 39% of respondents were either satisfied or very satisfied • 28% of respondents were neutral (neither dissatisfied nor dissatisfied) • 33% of respondents were either dissatisfied or very dissatisfied • 45% of respondents were either satisfied or very satisfied • 31% of respondents were neutral (neither dissatisfied nor dissatisfied) • 24% of respondents were either dissatisfied or very dissatisfied Based on3,145totalrespondents. Based on288totalrespondents.

8. Service Request System Turnaround All Ticket Turnaround in days, May 2012 - Feb 2013

9. Magical PAF Machine Trends • As of January 2013, MPM uploads directly to OLPPS, eliminating most manual keying of funding changes • Trend is for decreased turnaround time across all service centers for transmitting funding changes to OLPPS • Reduced effort and fewer opportunities for error in departments and service centers associated with entering and reconciling funding changes

10. Advance Trends • In aggregate, packets are further along in the advancement process this year than at the same time last year • As of January 28, 2013, 306 faculty actions (excluding VCF) had been completed compared to 202 completed faculty actions at the same time in 2012 • As of February 5, 2013, 54% of total packets had been certified by the department chair compared to 29% at the same time in 2012

11. FY14 Funding Model Highlights

12. FY14 Funding Model Subcommittee Process • Subcommittee represented all control points, clinical and basic science departments, and HR leadership • Subcommittee established principle that the scope of the subcommittee was to provide oversight and guidance on the management of the budget, but not to analyze or attempt to make recommendations on budget details • Specific budget-management details are the purview of HR leadership • Provided recommendations of areas to consider in managing to budget • Reviewed proposed FY 13-14 budget as well as FY 12-13 budget to actuals and startup budget to actuals to understand the scope of issues associated with the HR budget • The FY13-14 HR budget is approximately $25 million and includes 178 FTE • Originally, startup costs were projected to be $2.3M; they were actually ~$4.6M* • Considered a range of options and determined an increase that would be reasonable for the campus to bear • Strongly advocated for constituents • Recognized important balance between keeping costs to a minimum but also ensuring HR has the resources needed to stabilize and achieve service and process goals • AVC HR and subcommittee chair pursued increased institutional support in parallel based on recommendations from the subcommittee

13. Recommended Population Weighting for FY13-14 • Based on input from Service Center directors, subcommittee recommends reducing the weighting for two employee categories for FY13-14: students and non-recall emeritus • Quantitative and qualitative analysis should be performed during 2013 to provide comprehensive assessment of weighting for the other categories • This will allow a full year of more stable operations and performance data to inform future weighting recommendations

14. Institutional Support Commitment • The AVC HR and Funding Model Subcommittee Chair worked with the Senior Vice Chancellor to secure additional institutional support • Total central funding commitments for FY12-13 and FY13-14: $1.26M • FY12-13: • $200K one-time from SVC FAS to offset startup costs • FY13-14: • $200K one-time from SVC FAS to offset startup costs • $400K one-time from CFP (Chancellor’s Financial Plan) to support service excellence • $457K from FAS and CFP to support fixed-cost increases in the same proportion as rate revenue (6.5%) • FY14-15: • $374K from FAS and CFP to support fixed-cost increases in the same proportion as rate revenue (4.9%)

15. Recommended Guiding Principles for Managing HR Budget • Given all the factors outlined, the subcommittee recommends the following guiding principles for managing the HR budget • Accept inflationary/fixed-cost increases to the HR budget for FY13-14 and FY14-15 because the organization is stabilizing • 6.5% increase in aggregate rates for FY 13-14, assuming 5% merit* and 10% increase in benefits (1.7 percentage point increase) • 4.9% increase in aggregate rates for FY 14-15 • Depending on external factors that put financial pressure on departments (e.g., an NIH budget cut), the funding model subcommittee may need to revisit the above parameters for FY 14-15 • If merits are greater or lesser than projected, the approval assumes the budget will be adjusted upward or downward accordingly • Expect to start seeing flat or reduced rates after the next two years • Central sources of funding (non-revenue model revenue) should bear equivalent inflationary increases so that departments don’t bear disproportionate amount of increase • This is a shift away from the “permanent budget” approach to the funding model that was originally implemented • Delay amortization of startup costs over 5-10 years instead of the originally planned 3 years • The annual HR budget, as well as proposed variances from the HR budget greater than 1%, should be reviewed by this funding model subcommittee (or group that represents the same roles from each control point, clinical and basic science departments) to advise and make recommendations on possible alternatives • Exclusions would be self-supporting recharges that set rates independently • Restructuring of how specific services are recharged to departments should be reviewed by the subcommittee

16. FY13-14 HR Bill • Department bills for FY 13-14 will be driven by three components • Fixed cost increase is 6.5% due to under-collection of revenue in FY12-13, 5% merit in FY13-14 and increasing benefits rates • Overall across the campus, departments will experience a 6.5% increase in HR costs • The published rates for each population will differ from the 6.5% given weighting adjustments • Reduction of student weighting by 50% and elimination of charges for non-recall emeritus • Individual departments may pay more or less than a 6.5% increase based on their February 1 headcount

17. HR Operational Strategies to Manage Costs and Service • During the start-up year, HR leveraged opportunities to reduce staffing costs • Did not replace Benefits/Employment manager when retired • Shared Employment manager with Medical Center • Added Benefits manager role to Class/Comp manager position • Shared managers with Medical Center for HRIS and L/ER • Joined efforts with Medical Center for operating the Learning Management System • Financial impact for FY 12-13 is approximately $200K • Addressed customer service in response to customer demands through project-focused contract positions • Added Project Manager and Programmer to support HR Service Request System enhancements • Added Personnel File Coordinator to manage ongoing file maintenance until e-file project can be implemented • Financial impact for FY 12-13 is approximately $266K • We are continuing to look for ways to leverage resources and consolidate positions when it is possible to do so without undermining our service goals