Building Your 2007 Workforce Plan

1. 1 Building Your 2007 Workforce Plan Right People, Right Place, Right Time

2. Executive Summary A Workforce Plan�outlines your people strategies and identifies the Headcount #s required to support both your current year business plan and your long range business plan. You ALWAYS start with your 1-3 year Business strategy and look at the significant impacts on people, process, structure, and geographic expansion required to achieve your plans. The primary purpose of the Annual Workforce Plan is to identify the Headcount (HC) required to drive the '07 Business Plan results and deliver your critical initiatives. Multiple meetings need to be held with�each Function Head to develop the HC Plans required to align resources to deliver the critical initiatives for your firm as well as�to handle the increased work load required to execute operating plans to grow your Business. The functional Workforce plans are then cross functionally aligned, integrated into a total business plan, and time phased across your 2007 Business Plan calendar to ensure resources are added in the proper sequence to deliver�planned results. The overall Workforce Plan will usually result in the addition of new positions to the business. These costs must always be time phased to ensure all HC related costs�are fully covered in the financial budget.

3. Start w/Business Strategic Objectives Long Range Goals: --Increase revenues by ZZ% from $xxx to $yyy by 2010 -- Where will your Growth Strategies come from? �..Core Products? New Products/Services? Acquisitions? Emerging Businesses? --Will you be Divesting of any Businesses/Services? --Unit Sales Growth Strategy? Pricing Strategy? Service add-ons or expansions? --Will you have any geographic expansions/contractions? Real Estate buy/lease needs? Expand existing stores/locations? --Required Capital investments? -- Re-engineer critical processes? Invest in business line vs staff roles? New org structures? -- Have you Built a culture and organization where high growth is expected and managed appropriately? 2007 Business Plan Objectives: -- Achieve revenue growth at xx% and operating income of yy% -- Expand or open locations/stores resulting in an increase in GSF of xx% -- Execute 3-5-7 Key initiatives in 2007 -- Launch key infrastructure projects or programs -- Develop a high performance culture

4. Identify 2007 Critical Initiatives Product Growth Initiatives: -- Increase new Product Launches from x per year to z per year -- Invest in Emerging Business Growth -- Maximize Existing Product Organic Growth by xx% -- Expand capacity and capabilities within Merchandising, Stores, Field Sales and Product Commercialization teams by XX -- Complete Product Testing/Service Testing Customers Satisfaction/Retention Strategies Foundation Building --IT Projects? Office Systems? Office Tools? --Real Estate Initiatives? --Workforce support needs? Field/Home Office/Home? Support/Execute Other Growth Plans

5. Critical Initiative #1 2007 HC Requirements In order to ensure consistent execution and delivery of the revenue and profit from CI #1 we must add headcount to enable us to: --Accelerate Expansion, significantly increase our Product Rollout capability, increase our capabilities to analyze data to support product introduction decisions that will drive growth while maintaining current Product �base� Revenue. --Establish a dedicated Product Rollout team to speed time to market --Develop Standard Operating Model and Procedures to support Core Product Revenue Streams --Merch/Market, Plan, and Allocate Product through Current Channels and New Channels --Market and drive Customer Traffic to new Product Offerings while maintaining current $ --Create a Visual environment that �wow� with our customers. --Manage, Staff and Labor Schedule Sales Support SAMPLE WORKFORCE PLAN SUPPORT ANALYSIS

6. 2007 HC Growth by Function 07� Adds Dept 2006 CI Adds Growth Adds 2007 Field Operations 100 10 20 130 Sales 90 20 5 115 Marketing 70 15 5 90 Product Dev 50 5 5 60 Merch/Sup Chain 90 5 5 100 Others 50 3 5 58 Total 450 58 45 563 NOTE: Of the 103 HC being added, 85% (88 HC) are at the individual contributor level. Our HC investment to build capacity to execute Business Growth Plans and implement CIs is distorted to Individual Contributor roles.

7. Headcount Ramp-Up

8. Financial Summary of headcount ramp-up

9. Additional Workforce Planning Factors The impact of Turnover The impact of Space Planning The impact of Direct HC Costs (e.g. benefits, taxes, business expenses, etc) The impact of Support Costs (computers, admin support, office equipment, car, etc) Recruiting Costs/Time to Fill Succession Planning/Development Training and On Boarding Long Range Planning

10. Additional Business Factors The Workforce Plan HC additions�are set by month. You hire to that time phasing and if necessary delay any hiring that will create a negative budget variance Stuff Happens Smooth rollout versus staffing for peak. Plan for variances both +/- Finance/Accounting Alignment Long Range Planning

11. Workforce Planning Timing and Other Hints Workforce Planning MUST Occur in Synch with Annual Financial Planning. In fact WF Plans should slightly lead the Financial Plan Typically this is Difficult to Get on the Financial Planning Calendar Each Function must be Engaged by HR Cross-functional Alignment is Critical to the Process HR must be Ready for Contingencies in business performance The Ramp-up Factor in Planning and On boarding Parallel Processing versus Sequential Processing Timing will always be out of Synch HR must be a Full Business Partner and Know the Business

12. Appendix HC Data by Function and outlined on a Cost Spreadsheet HC Aligned by Key Initiative/Growth Org Charts Business Financial Plans