VaLUENTiS Human Capital Reporting model template 310106

Client Organisation: Barclays

A Client PLCHuman Capital ManagementReport

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Human Capital Report 2005

Human Capital Management Client Report [period 01.01.04 – 31.112.04]Draft 01.02.06

illustration only as a means of providing atemplate with example content and layout.All references within reflect commonelements but do not refer to any specificorganisation or person.


The purpose of this document is to provide an illustrative guide to a humancapital report. We advise reading our accompanying HC Reporting white paper to

Purpose of this document…

p p g p y g p g p pgain further context and understanding regarding the actual reporting construct.

It is not meant to be prescriptive or comprehensive, merely an indication of likelyheadings and content . Guidance notes are included where you see the followingformat:

Guidance notes

Should you wish to obtain further information or assistance with regard toproducing a document or should you wish to receive specific Human CapitalReporting related training*, then please contact our international HCR CorporateSolutions Team on:+ 44 20 7 887 6108 or e-mail: [email protected] .

*VaLUENTiS International School of Human Capital Management

Human Capital Measurement

VBVB--HRHR™™ RatingRating

HC ReportingHC Reporting

PerformancePerformance

TalentTalent

Employee Employee engagementengagement

Employer brandEmployer brand

‘Every so often comes a new market leader’

Measurement

Human Capital Management

HR Function Effectiveness

HC ScorecardHC Scorecard

TalentTalent

RewardReward

RetentionRetention

HC HC BenchmarkingBenchmarking

HR StrategyHR Strategy

HR Value propositionHR Value proposition

HR Delivery modelHR Delivery model

Organisation Measurement & Effectiveness

Diagnosis ? Design ? Implementation

HR CapabilityHR CapabilityOrganisationalOrganisational--HRHR‘work‘work--out’out’programmesprogrammes

Scorecards Scorecards

ValueValue--based based enterprise managemententerprise management

M&A integrationM&A integration

RestructuresRestructures

HR AuditsHR Audits

Sales team effectivenessSales team effectiveness

Client managementClient management

Human Capital Report 2005 2

Global Headquarters: 2nd Floor, Berkeley Square House, Berkeley Square, London, W1J 6BDTel: +44 20 7 887 6108 Fax: +44 20 7 887 6100 ? www.valuentis.com ? www.vbhr.com

Next…….


Different levels of reporting…

VaLUENTiS white paper ‘Human Capital Reporting: A summary of draft proposals’provides the rationale for organisations to aspire to three different levels ofreporting, ‘Standard’, ‘Intermediate’ and ‘Advanced’.

Each level contains a number of expected (mandatory) components with certainoptions/variations as shown in the table below.

This takes account of where organisations are today and where they can progressto, over time. Naturally we would expect readers of the information to push foreverybody to the advanced level as soon as possible.

There are plans for a fourth and fifth level as and when organisations havereached the ‘Advanced’ ceilingreached the Advanced ceiling.

Levels of HC Reporting

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Standard - - - Intermediate - - Advanced -

Optional

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The three levels are designed to provide organisations with flexible options given their intent to publish human capital related information.

Human Capital Report 2005 3Read on…….


Content1. Review of 20052. Driving organisational performance

through HCM policiesT l t t

We propose that the HC report

for the period 01.01.05 – 31.12.05]

Talent managementEmployee wellnessDiversity & employee opportunitiesFlexible employment & reward

3. Human Capital initiativesEmployee engagementR it t & t ti

the HC report should be a standalone document or contained as a section within the annual accounts.

Recruitment & retentionLearning

4. Company practice insight5. Human Capital - Report of Directors6. Human Capital Reporting statements

Human Capital Operating statementP l Fl t t tPeopleFlow statementHC Productivity statement

7. Business segment review8. Our VB-HR™ Rating

‘People’

‘Purpose’

‘Profit’

Human Capital Report 2005


Review of 2005As a leading company in our field, we recognisethe huge part people play in the delivery of ourproducts and services to the market-place Ourproducts and services to the market place. Ourfinancial performance is a testament to thiscontribution. As part of our global strategy, weplace significant importance in reporting aspectsof our people, the essence of which is containedwithin this report.Our strategy is based on continually gaining competitive advantagewhich can only be maintained through the dedication, development

d f land management of our people assets.Our performance based culture is designed to get the best from ourpeople and we feel that it is necessary to place just as muchemphasis on measuring the people aspects of the business as thetraditional measures.This document provides a window through which our variousinvestors and stakeholders can see with more transparency and assuch understand and acknowledge our commitment to continuedexcellence.


J. W. SmithersChief Executive Officer

Client Organisation: BarclaysDriving Organisational Performance through HCM policies

Talent management This sectionTalent managementSelecting our future managers and leaders helps us to ensure that we continue to be a high-performingorganisation that can exceed the expectations of our customers, staff and other stakeholders. We make surethat we can spot potential and high performance, through use of our annual appraisal system.The ‘Enhancing our Performance’ tool is now available on the company intranet, and allows us to provide allmanagers in the Group effective feedback on how they are performing. The 360-degree assessmentincorporates feedback from people who work for them as well as their peers and their own manager,combining different viewpoints to help them identify their strengths, as well as the area of their performance oroutcomes that they might wish to improve with targeted support.

This section should provide readers with an outline of specific policies that the organisation wishes to make known.

y g p g ppSimilarly, we ensure that all our employees receive effective formal and informal feedback on how they areperforming. We are currently rolling out a series of workshops to ensure that all our staff with peoplemanagement have a similar approach towards giving feedback.

Employee wellnessWe have a ‘zero-tolerance’ view of accidents in the workplace. As weregard Health & Safety as a core aspect of how we do business, employeesreceive Health & Safety briefings as part of their induction programmes,with additional annual training updates provided in the case of specialistroles.We provide all colleagues the opportunity to receive free eye tests, andoffer subsidised gym membership as part of our overall ‘Healthy Mind in aHealthy Body’ programme. We have received positive feedback fromcolleagues since launching the programme, with reduced levels of stress.I t ff t th t f l f t l di ti

Diversity and employee opportunitiesWe aspire to creating a diverse workforce that reflects the communities we work in. We recognise diversity asa way that can add value to the business through incorporating different experiences and viewpoints. Thishelps us enhance the way we deal with our clients and ultimately we believe it helps our competitive position .

In our staff canteens, we ensure that a range of low-fat, low-sodium optionsare available daily, and provide nutritional information so that ourcolleagues can make their own informed choices.

To support the way we put this into practice, we ensure that all decisions around hiring, developing andpromoting are based on work-related criteria as laid down in detailed policies. All our recruiters are trained toavoid discrimination in their questions and assessments and we supplement our interviewing with competency-based assessments.We are committed to providing all employees with equal opportunities based on merit, irrespective of theirrace, gender, sexuality or beliefs. Our policy, ‘Respect for everyone’ is intended to support this and prohibitsdiscrimination on any grounds. We communicate our equality and diversity policy at induction and provideguidance to managers on equal opportunities, including recruitment of disabled employees and ethnic

i iti E l t di i i ti h t th h C l i t d L t


minorities. Employees can report discrimination or harassment through our Complaints procedure. Last yearwe received 15 discrimination-related complaints, down from 18 in the previous year. All 15 were resolvedfollowing dialogue between the individuals concerned.

Client Organisation: BarclaysDriving Organisational Performance through HCM policies (continued)

Flexible employment and rewardFlexible employment and rewardOur flexible working policy applies across all parts of our business (subject to local legislative requirements).Our employment practices give employees the flexibility to manage their work-life balance. These include:

– part-time working – from 12 to 36 hours per week; employees can choose a variety of hours per day anddays per week

– job share – within appropriate roles, two colleagues can share a full-time job– two weeks’ paid paternity leave (following the birth of a baby)– parental leave (for childcare)

career break schemes of up to one year (e g for personal development or caring responsibilities)– career break schemes of up to one year (e.g. for personal development or caring responsibilities)– paid time away from work for jury service, bereavement and emergency incidents.

Our pay and benefits package rewards employees for their contribution to the business, and allows eachperson to tailor his or her package to suit their needs. Core benefits include a competitive salary, which takesaccount of the markets in which our businesses operate, bonus opportunity and Group profit sharing – ameans for all our employees to share in the broader success of the Group.



Human capital initiatives

Employee engagement This section providesEmployee engagementWe recognise that engaging our workforce is a key contributor to company performance. Our ‘Have your say’engagement survey is now in its third year. The survey provides us with a means of assessing employeeopinions, commitment and engagement, as well as an index for comparison year-on-year. In our surveycarried out in May 2005, we achieved an overall 78% response. This demonstrated that colleagues are clearabout what is expected of them, but that we need to improve day-to-day communications and act to prevent aperception of increased work pressures and deterioration in work-life balance.

Our employee engagement score across the Group rose from 68 9 to 69 2 with the majority of operating units

This section provides more granular details of specific initiatives either undertaken during the reported year or otherwise planned for the coming year.

Our employee engagement score across the Group rose from 68.9 to 69.2, with the majority of operating unitsreporting increases, representing a trend that has continually increased. This would suggest that we are payingattention to the things that matter to our workforce but recognising that we still have room for improvement.

Recruitment & retentionOur ‘Employer of Choice’ programme, designed to portray a consistent image ofthe organisation across Europe, formally concluded early in the period and hasbeen well received amongst potential recruits and new starters.been well received amongst potential recruits and new starters.

All internal job opportunities are advertised internally on the intranet, as well asthrough appropriate external means, such as agencies or newspaperadvertisements.

Our practice of awarding ‘sign-on’ and referral packages continues to be wellreceived in the marketplace and amongst our employees. The success of thereferral package has contributed to a reduction in overall recruitment costs by

LearningWe want everyone who works for us to have the opportunity to develop their skills and knowledge, so that theycan perform their jobs to the best of their ability and develop their careers with us. We provide a range ofdifferent types of training, including courses, workshops, on-the-job support, mentoring, support in achievingrelated external qualifications and subsidised access to professional subscriptions.

referral package has contributed to a reduction in overall recruitment costs bysome £600,000 against 2004 figures.

Feedback from staff suggests that the increased focus on individual development, through the rollout of the‘My Career’ programme of workshops and intranet tools, with the review of our development suite, has beenreceived positively. The effectiveness of this programme is being evaluated through multiple approaches,including a series of questions in the engagement survey, with initial findings suggesting that this programmehas both increased staff engagement (by up to 1.2 points) and customer satisfaction.

As part of the development process, the web-based ‘Enhancing our Performance’ tool gives all managers in


the Group effective feedback on how they are performing. The 360-degree assessment focuses on the resultsthey create and how they achieve them through incorporating multiple viewpoints.


Company practice insight

Flexible workingThis section may want to provide

t l i i Flexible workingWe recognise that engaging our workforce is a key contributor tocompany performance. To ensure that all our employees are able tocontribute to the maximum, we aim wherever possible to give them theflexibility they need to balance their various commitments and managetheir work/life balance appropriately.Edwin, who joined us as a graduate in 2001, has opted to take advantageof our unpaid leave of absence policy that all employees qualify for afterfour years’ service, to teach English in Australia for six months before

actual mini case studies to ground statements made under the policies and/or initiatives sections.

y , ggoing travelling. “My friends are all impressed with the flexibility I have,and how supportive my colleagues have been” he confided.Anja has recently transitioned from a full-time role to a four-day week, tospend more time as a volunteer with her local hospice. “I’m really pleasedto be able to give something back to the community, and the companyhas been fantastic at letting me re-evaluate how I worked in support ofthat”, she said.All over Europe, we now offer employees the options that give them theflexibility they ask for, whilst ensuring that they still play an active andeffective role in the workplace.

Graduate recruitmentAll our staff are vital to our effective operations and success, and weplace high emphasis in identifying ‘high-flyers’ from all walks of life to addto our talent pool. We hire a selected number of graduates each year fromtop University campuses across Europe, and our dedicated graduaterecruitment team is kept busy year-round in handling the many requestswe receive, for full-time work and our sought-after internships.Martin, our European Graduate Recruitment Manager, tells us how thep gmilk-round at top Universities seems to get more competitive each year.“Of course our competitors are at the same events,” he smiles, “butgraduates always get excited when they start to learn about what workingfor us is really like. There’s just something about the way our peoplerespond to their questions that they find so engaging, and that really helpsus differentiate ourselves on campus.”As part of our annual review of our employer brand on campus, wediscovered that, for the third year running, we have been recognised as‘th I ld t lik t k f ’ i t


‘the company I would most like to work for’ in our sector.


Human Capital Reporting statements

Report of the DirectorsThe following statements are set out in accordance with human capital reporting standards 2006 (HCRC)and as such provide a breakdown of the performance, composition and productivity of our human capital.The development of employees, to ensure that we possess the necessary skills and behaviours to achieveour strategic business objectives is given a high priority We place emphasis on ensuring effectiveour strategic business objectives, is given a high priority. We place emphasis on ensuring effectivemanagement succession, and have developed well-established approaches for recruiting and developinggraduates and other young people into the Group.Our Code of Conduct outlines our commitment to respect for individuals, no matter what their backgroundand culture. We have a policy of recruiting from the widest possible labour market and determining thecareers of our employees solely on their own merit.Accordingly, we consider suitably qualified disabled people for employment and assist them in overcominghandicaps at work. In the unfortunate case where an employee develops a disability during employment,we seek to provide them with assistance in retrainingwe seek to provide them with assistance in retraining.Internal communication is a priority for us, as our colleagues carry forward our reputation, brand andknowledge. We share information through a variety of approaches, utilising our intranet as well as internalpublications and briefing sessions. Our senior managers review staff feedback and suggestions everymonth, and every year we hold a formal management review of themes and issues that emerge throughoutthe year.

By order of the board.C J Burns


C.J. BurnsSecretary.


Human Capital Operating Statement

ye 31st Dec 2005 ye 31st Dec 2004

Information regarding this statementcan be found in our white paper orthrough our training events. There aredifferent ways in which to report theactual data, i.e. whether to reportaccompanying percentages, more

ye 31st Dec 2005 ye 31st Dec 2004

OPERATING INCOME %

Revenue (£000s) 1,057,016 1,015,020

FTEs 16,352 16,047

Revenue per FTE 64,641 63,253

OPERATING COSTS

Total operating costs (£000s) 904,371 815,094

People costs (£000s) 532,181 464,317

Human Capital Intensity (HCI) 58 85 56 96 2

p y g p g ,comment etc, though this will to agreat degree depend on the type oforganisation.

Human Capital Intensity (HCI) 58.85 56.96

OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)

38,041

36,029

£ % £ %

ANCILLARY PEOPLE COSTS (APC)

Training & Development costs (£000s) 8,176 7,342

Recruitment costs (£000s) 2,314 2,954

1

Health & Safety costs (£000s) 740 691

HR functional and related costs (£000s) 6,254 6,879

Outplacement costs (£000s) 256 53

Total 17,740 17,919

HC LEVERAGE (HCIR/APC per FTE) 35.06 32.26

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Results1. HCI*R (Revenue contributed by HC) per FTE increased from 36,029 to

38,041, including an increase in staff of 305 (+1.9%) to 16,352 – see thePeopleFlow statement.

2. Human Capital intensity (people costs/total costs) has increased from56.96% to 58.85%, further underlining the importance of people to ourbusiness.

3. HC Leverage has increased from 32.26 to 35.06 representing animprovement of 8.7%.

4. Average HC leverage (using VaLUENTiS HC performance index) has across sector index score of 49.56. Our performance ranks in the 45th

percentile.5. Overall ancillary people costs have declined by £179,000 (1%) due mainly

in the reduction of recruitment and HR functional related costs over 2004,partially offset by the increase in training & development spend.


p y y g p p


Notes to Human Capital Operating Statement

1.1 Revenue. This relates to figures for the overall Group as stated in the accompanying

Accompanying notes form thebackbone of the reportinginformation, providing depth ofunderstanding and transparencyfor the intended reader. Acomprehensive understanding is

Profit & Loss Statement.1.2 FTEs. See PeopleFlow Statement for detailed analysis of headcount figures. PTACS

approach has been adopted to account for the use of agency staff and contract workers.1.3 Revenue per FTE. Derived through calculation in line with related Operating Principle.1.4 Total Operating Costs. Reported figures exclude depreciation and amortisation in line

with related Operating Principle. Figures do not exclude Ancillary People Costs (seeNote 1.8)

1.5 People costs. £532.1 million is comprised of Directors Remuneration of £1.9 million, a

p grequired of the HCR operatingprinciples which can be gainedthrough VaLUENTiS white paperor specific training provision.

p p ,contribution to pension schemes of £7.8 million (reducing the FRS17 deficit to £27.4million) and Payroll costs of £522.5 million.

1.6 Human Capital Intensity. Derived through calculation in line with related OperatingPrinciple.

1.7 HCI*R per FTE. Derived through calculation in line with related Operating Principle.1.8 Ancillary People Costs. Costs as stated have not been excluded from the Total Operating

Costs as set out in Note 1.4. We have adopted this approach as APC is not deemed toimpact materially on Total Operating Cost figures.p y p g g

1.9 Training & Development. Costs of £8.2 million are disaggregated as follows. Pre-threshold training costs do not apply, as the cost of induction is captured in ‘Recruitmentcosts’, see Note 1.10. Threshold training costs equal £7.6 million in the period, of which£5.8 million relates to HR delivery and procurement of external provision, and £1.8million relates to line delivery and direct procurement of external provision. As theorganisation does not possess a dedicated Training Department, costs have beenderived through pro-rata allocation of HR personnel costs and associated procurementspend. Post-threshold development costs equal £0.6 million, all of which relates to

t l i iexternal course provision.1.10Recruitment. Costs of £2.3 million include fees paid to agencies totalling £1.6 million,

Induction costs of £0.3 million (which are excluded from Training Costs as set out inNote 1.9) and an allocation of HR departmental resource time and associated budget of£0.4 million.

1.11Health & Safety. Costs of £0.7m relate to related training provision of £0.1 million, relatedinsurance payments of £0.4m, £0.1m of pre-recruitment health screening and £0.1m ofemployee health assessments. No court awards relating to Health & Safety, orassociated liabilities have been incurred within the periodassociated liabilities have been incurred within the period.

1.12HR functional and related. Costs of £6.3 million include HR budgeted resource andexpense items not otherwise included in reported cost categories of £5.6m, £0.2 millionspent on employee surveys and the use of Agency staff totalling £0.5 million. Noemployment tribunals have taken place within the period.

1.13Outplacement costs. £0.3 million relates entirely to redundancy costs within the periodcaused by the reduction in the scale of French operations.

1.14Contractor/Agent. Costs of £0.5 million relate to the use of Agency staff within the periodand have been included within the HR functional costs (see Note 1 12)


and have been included within the HR functional costs (see Note 1.12).1.15Total APC. Derived through calculation in line with related Operating Principle.1.16HC Leverage. Derived through calculation in line with related Operating Principle.


PeopleFlow® Statement

STAFFING ye 31st Dec 2005 ye 31st Dec 2004

%

Information regarding this statementcan be found in our white paper orthrough our training events. There aredifferent ways in which to report theactual data, i.e. whether to reportaccompanying percentages, morecomment etc, though this will to a %

No of full-time staff at start of year 14,011 13,865

Number of part-time staff at start of year (FTE eqv)

1,932 1,491

Number of other at start of year (FTE eqv) 104 175

Full time equivalents (FTEs) at start of year

16,047 15,531

STAFFING MOVEMENT % £ %

Number of FTEs recruited in period (+) 1,427 1,874

comment etc, though this will to agreat degree depend on the type oforganisation.

Number of acquisitioned FTEs during period (+) - -

1,427 1,874

Number of voluntary leavers (FTE) in period (-) 996 1,065

Number of FTEs made redundant or outplaced in period (-)

35 217

Number of FTE retirements in period (-) 91 76

Number of FTEs outsourced in period (-) -

Full time equivalents (FTEs) at end of year 16,352 16,047 q ( ) y , ,

STAFFING MISCELLANEOUS

Mean tenure (years) 5.2 5.3

Mean age of workforce 34 34

Retirement population 5,391 5,304



Notes to the Peopleflow Statement

2.1 FTEs at start of year. Consistent with figures at year end 2004. Part-time staff iscomprised of staff who work less than the contracted weekly 40 hours. Other staffrelates to 97 agency staff utilised to provide short-term cover and 7 staff on contractsthat expired within the period under review. Figures at start of period include 375 x full-time staff on maternity/paternity leave and 223 x part-time staff on maternity/paternityleave.

2.2 FTEs recruited in period. This includes 1,318 full-time permanent staff and 194 part-timepermanent staff. Group operations do not rely on seasonal staff and therefore these arenot included within stated figures.

2 3 N b f i iti d FTE d i i d N i iti h b d ithi th2.3 Number of acquisitioned FTEs during period. No acquisitions have been made within theperiod.

2.4 Number of voluntary leavers in period. This is comprised of 720 full-time permanent staffand 332 part-time permanent staff.

2.5 Number of FTEs made redundant or outplaced. Redundancies relate to the reduction ofthe French operations within the period, following an appropriate period of consultation,resulting in 33 full-time employees opting for redundancy packages rather thanrelocation options offered. In addition, 2 employees have been dismissed within theperiod for (unrelated) disciplinary reasonsperiod for (unrelated) disciplinary reasons.

2.6 Number of FTE retirements. Our retiree population has increased by 91 full-time staff, ofwhom 12 have chosen to take early retirement.

2.7 Number of FTEs outsourced. No FTEs have been subject to outsourcing arrangementswithin the period.

2.8 Full-time equivalents at end of year. This accordingly totals 16,352 at year-end, derivedin calculation with related Operating Principle.

2.9 Mean tenure. This has been calculated from the anniversary of start dates of full-timet t ff l d fl t th fi t dpermanent staff only and reflects the figure at year-end.

2.10Mean age. This has been calculated for all full-time and part-time permanent staff onlyand reflects the figure at year-end. Further detail is provided in the Regional analysissection.

2.11Retirement population. This reflects current numbers of staff receiving a pension fromthe Group (including Directors).



HC Productivity Statement

CONTRACTED RESOURCE ye 31st Dec 2005 ye 31st Dec 2004

Total number of FTE days contracted in year 3 530 340 3 401 289

Information regarding this statementcan be found in our white paper orthrough our training events. There aredifferent ways in which to report theactual data, i.e. whether to reportaccompanying percentages, morecomment etc, though this will to agreat degree depend on the type ofTotal number of FTE days contracted in year 3,530,340 3,401,289

Total number of FTE vacation days taken in year

336,987 333,144

TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE

3,193,353 3,068,145

WORK RESOURCE ADJUSTMENT

FTE days gained through recorded overtime work (+)

61,932 65,371

FTE days lost to illness (-) 18,431 19,016

FTE days lost to work-related illness/injury (-) 2,773 2,816

FTE days lost to industrial action (-) 249 167

1

2

great degree depend on the type oforganisation.

FTE days lost to industrial action ( ) 249 167

FTE days recorded as lost under miscellaneous (-)

763 1,075

ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED

3,233,069 3,110,442

PRODUCTIVITY

HCI*Revenue per FTE day (optimal) £192.96 £185.42

HCI*Revenue per FTE day (actual) £190.59 £182.90

HCI*Revenue per FTE day differential £2.37 £2.52

5

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EMPLOYER-EMPLOYEE RELATED INDICES

Employee engagement index 69.2 68.5

Employer brand index 71.3 71.0

HUMAN CAPITAL MANAGEMENT INDEX

VB-HR Rating BB-BB-R BB-B-R

HC Performance Sustaining + Sustaining +

67

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Results1. For ease of reference, numbers under this heading are actual and not in (000s).2. Over time recorded does not obviously include unrecorded over time nor any discretionary

efforts of employees.3. HCI*Revenue per FTE day (optimal) is the revenue generated per people contribution

based on the contracted days (i.e. before any overtime and lost work days).4. HCI*Revenue per FTE day (actual) is the revenue generated per people contribution

based on the actual number of days worked (i.e. including any overtime and lost workdays). Since revenue recorded is a post-adjustment (actual) number it does not record theactual gain/loss from the contracted days.

5. HCI*Revenue per FTE day differential is the resulting gain/loss. A positive number showsthe attributable loss (inefficiency) of the operation.

6. Overall employee engagement index score increased from 68.5 to 69.2 (75th percentile)with improvements seen across all five domains, line-of-sight, work environment, reward,development and organisational architecture. However there was considerable variationacross the group – see business segment review on page 18.

7. Similarly, we recorded an overall improvement in our employer brand index score andhave now broken through the 70th percentile (VaLUENTiS global index) – see alsobusiness segment review section on page 18.


8. Our overall VB-HR™ Rating has improved to BB-BB-R (see page 20 of this report forfurther information)


Notes to the HC Productivity Statement

3.1 Total number of contracted FTE days available. Derived through calculation in line withrelated Operating Principle.

3.2 Total number of FTE days contracted in year. No additional information required.3.3 Total number of FTE vacation days taken. No additional information required.3.4 Actual number of contracted FTE days worked. Derived through calculation in line with

related Operating Principle.3.5 FTE days gained through recorded overtime work. 14% of the workforce is eligible for

overtime work.3 6 FTE days lost to illness This figure includes 1 645 days lost that are categorised as3.6 FTE days lost to illness. This figure includes 1,645 days lost that are categorised as

long-tem sickness and 16,786 categorised as short-term sickness.3.7 FTE days lost to work-related illness or injury. Work-related illness or injury has resulted

in 2,773 days lost, of which 622 days are categorised as long-term sickness and 2,151categorised as short-term sickness. We are pleased to report that our workforce hasbeen free from fatality or death-in-service within the period.

3.8 FTE days lost to industrial action. Three separate episodes in the French operationsresulted in 189 days being lost. A further 60 days have been recorded as lost throughassociated negotiation and conflict resolution by HR professionals and other staff.g y p

3.9 FTE days lost under miscellaneous. We apply the definition as set out in the relatedOperating Principle.



Business-HC segment review (geography)Organisations have a variety ofways to present this data thoughthis should follow the formatused in the main accounts This

Human Capital Operating Statement

Year ending December 31 2005 UK Germany Spain France Italy Portugal

OPERATING INCOME £ % £ % £ % £ % £ % £ %

Revenue (£000s) 701,919 236,282 72,317 23,346 15,134 8,018

FTEs 10,294 3,893 1,412 354 278 121

used in the main accounts. Thisexample follows geographicalsplit. Knowledge regardingpreparing segmental data can begained through attending ourspecific training events.

Revenue per FTE 68,187 60,694 51,216 65,949 54,439 66,264

OPERATING COSTS

Total operating costs (£000s) 587,126 214,333 60,187 22,496 13,390 6,839

People costs (£000s) 352,551 121,313 34,422 13,543 7,158 3,194

Human Capital Intensity (HCI) 59.88 56.60 57.19 60.20 53.46 46.70

OPERATING INCOME ATTRIBUTABLE TO HC (HCIR per FTE)

40,830 34,353 29,290 39,701 29,103 30,945

ANCILLARY PEOPLE COSTS (APC)

1

Training & Development costs (£000s) 5,148 2,017 616 202 125 68

Recruitment costs (£000s) 1,457 362 310 112 52 21

Health & Safety costs (£000s) 476 189 56 9 7 3

HR functional and related costs (£000s) 4,010 1,366 417 274 125 62

Outplacement costs (£000s) 59 23 6 168 - -

Total 11,150 3,957 1,405 765 309 154

HC LEVERAGE (HCIR/APC per FTE) 37.70 33.80 29.44 18.37 26.18 24.31

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Notes to segment information1. Human capital intensity ratios reflect different human capital operating models, with Italy and Spain

operations recently set up. It is expected that these will increase over the next two years.2. Contains 678,549 group costs. If stripped from UK ancillary costs, HC leverage increases to 40.14.

We have not reallocated Group HR spend across the various geographies.3. For comparative purposes, average HC leverage (using VaLUENTiS HC performance index) has a

t i d f 49 56cross sector index score of 49.56.4. ….



Business-HC segment review (geography)

PeopleFlow® Statement

Year ending December 31 2005 UK Germany Spain France Italy Portugal

STAFFING

No of full-time staff at start of year 9,046 3,403 1,157 320 177 84

Number of part-time staff at start of year (FTE eqv)

1,232 491 123 55 31 -

Number of other at start of year (FTE eqv) 78 26 - - - -

Full time equivalents (FTEs) at start of year 10,356 3,920 1,280 375 208 84

STAFFING MOVEMENT

Number of FTEs recruited in period (+) 788 222 265 14 91 47

Number of acquisitioned FTEs during period (+) - - - - - -

788 222 265 14 91 47

Number of voluntary leavers (FTE) in period (-) 533 167 130 2 21 10

Number of FTEs made redundant or outplaced in period (-)

26 6 3 33 - -

Number of FTE retirements in period (-) 91 76 - - - -

1

2

3

Number of FTEs outsourced in period (-) - - - - - -

Full time equivalents (FTEs) at end of year 10,294 3,893 1,412 354 278 121

STAFFING MISCELLANEOUS

Mean tenure (years) 5.2 6.3 5.8 3.7 1.4 1.3

Mean age of workforce 34 38 29 32 27 26

Retirement population 5,039 352 5 - - -

4

Notes to segment information1. Included here are interim positions and other directly employed contractors.2. UK accounted for just over 55% of total new employees in 2005, as against 62% of total of voluntary

leavers.3. Details of the redundancies in our French operation can be found under the main Human Capital

Operating statement.4. UK operations account for 64.5% of total employees.5. ….



Business-HC segment review (geography)

CONTRACTED RESOURCE UK Germany Spain France Italy Portugal

Total number of FTE days contracted in year (000s)

2212 836 304 84 67 28

Total number of FTE vacation days taken in year (000s)

205 87 29 8 6 2

TOTAL NUMBER OF CONTRACTED FTE DAYS AVAILABLE (000s)

2,007 749 275 76 61 26

WORK RESOURCE ADJUSTMENT

FTE days gained through recorded overtime work (+)

51,188 5,762 2,462 498 1,130 892

1

2(+)

FTE days lost to illness (-) 13,539 3,161 1,345 199 147 40

FTE days lost to work-related illness/injury (-) 1,812 544 239 85 61 32

FTE days lost to industrial action (-) 82 104 6 54 3 -

FTE days recorded as lost under miscellaneous (-)

549 126 65 13 8 2

ACTUAL NUMBER OF CONTRACTED FTE DAYS WORKED (000s)

2,042 751 276 76 62 27

PRODUCTIVITY £/FTE day £/FTE day £/FTE day £/FTE day £/FTE day £/FTE day

HCI*Revenue per FTE day (optimal) 209.42 178.55 150.39 184.92 132.63 144.01

HCI*Revenue per FTE day (actual) 205.83 178.08 149.85 184.92 130.49 138.68

3

4

2

HCI Revenue per FTE day (actual) 205.83 178.08 149.85 184.92 130.49 138.68

HCI*Revenue per FTE day differential +3.59 +0.47 +0.54 0.00 +2.14 +5.33

Notes to segment information• For ease of reference, numbers under this heading are actual and not in (000s).• Over time recorded does not obviously include unrecorded over time nor any discretionary efforts of employees• HCI*Revenue per FTE day (optimal) is the revenue generated per people contribution based on the contracted days (i.e.

before any overtime and lost work days).• HCI*Revenue per FTE day (actual) is the revenue generated per people contribution based on the actual number of days

worked (i.e. including any overtime and lost work days). Since revenue recorded is a post-adjustment (actual) number it doesnot record the actual gain/loss from the contracted days.

5

2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004

EMPLOYER-EMPLOYEE RELATED INDICES

Employee engagement index 69.2 68.5 66.3 66.1 70.4 70.3 65.1 69.3 73.5 70.8 72.6 71.4

not record the actual gain/loss from the contracted days.• HCI*Revenue per FTE day differential is the resulting gain/loss. A positive number shows the attributable loss (inefficiency) of

the operation.

6

Response rate (%) 81 79 68 70 78 78 67 75 91 95 84 85

Employer brand index 71.3 71.0 70.2 69.9 73.1 71.4 62.3 62.3 na na

HUMAN CAPITAL MANAGEMENT INDEX

VB-HR™ Rating [Current-Future-Risk] [BB-BB-R] [BB-B-R] [BB-BB-R] [B-B-R] na na

HC Performance Sustaining + Sustaining Sustaining + OPQ - -

Notes to segment information6. We measure our Employee engagement through VaLUENTiS global engagement ‘5-domain’ index.7. We measure our Employer brand through VaLUENTiS E-Bglobal framework which is a composite index, including internal and

7


external evaluation.


Business-HC segment review

Further information on specific human

The following charts provide additionalinformation regarding employees across theGroup.

Further information on specific humancapital issues can be reported hereto supplement baseline numbers onprevious pages. For example, furtherratio analysis can be found herethough care must be taken to reportmeaningful numbers rather than ahost of benchmark data.

FTEs by country

Spain, 1,412

France, 354

Italy, 278 Portugal, 121

UK 10 294

Germany, 3,893

The Group operates across six Europeancountries, with the UK representing themajority of the workforce. The following chartshows FTE numbers by country at year-end.This figure includes both full-time and part-time workers, in line with our approachestowards flexible working.These figures are broken down further in theUK, 10,294

FTE age distribution

46%

25%

3%

49%

23%

3%

31 40

21-30

20 and under

These figures are broken down further in thePeopleFlow® statement.

The chart on the left displays the distribution ofemployees by age group. We are able tobenefit from the wide range of life and careerexperience displayed by our colleagues.The average length of service is just over 5

4%

7%

15%

46%

5%

6%

14%

0% 10% 20% 30% 40% 50% 60%

Over 60

51-60

41-50

31-40

% of full-time workforce

20042005

F l ti i ti i th kf

The average length of service is just over 5years, but in many cases colleagues chooseto stay with us significantly longer than that.We recognise employee with awards on theanniversary of their service at five-yearperiods, and our Chairman was the Guest ofHonour at the 2005 annual Retirees Dinner.

W h t t b 2010 t i thFemale participation in the workforce

10%

20%

30%

40%

50%

60%

Target

We have a target by 2010 to raise theparticipation of women in our workforce to50.5% across the Group. The following chartshows that we have already achieved thistarget in Germany and the UK, but still havework to do to encourage participating in otherEuropean countries. Local HR teams areworking with the Group and operating units tosee how this can be most appropriately


0%UK Germany Spain France Italy Portugal

pp p yachieved.


VB-HR™ Rating

VB-HR™ Rating

The VB-HR™ Rating is shown here as webelieve it is the only instrument globally that canbe reported in Human Capital reviews. If you areunfamiliar with this tool then www.vbhr.com willbe a useful resource. The Rating providesmanagement with a means of evaluating currenthuman capital management practice including afuture oriented perspective which has becomeg

HR Strategy

BB BB RHR Functional

Capital

Human Capital Management

Overallranking

AAAAAABBBBBBCCCCCC

R

rmin

r

RR

RRRBB RBB

future oriented perspective which has becomean important market need

Workforce Intelligence

OrganisationalHCMCapital

BBRBBBB

BBRBBBBB

HCMArchitecture

BBRBBBBB

Management Employees

BBRBB

BBRBBBBBB

HR Customer-agency

BBRBBBB

HR Capability

BBRBBBB

HumanCapital HR Procurement

BB

BB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

BB

BB

R

EFFECTIVENESS

MAINTENANCE

RISK

The VB-HR™ Rating is a cross-sector Rating system that assesses the performance of human capital management practice across the organisation from current (Effectiveness), future (Maintenance) and riskperspectives.

A VB-HR™ Rating Level 3 exercise (audit) was undertaken by VaLUENTiS in November 2005. The overall

RISKRISK

A VB HR Rating Level 3 exercise (audit) was undertaken by VaLUENTiS in November 2005. The overallranking is formed from aggregated data provided on each company operation. Investors can download theVB-HR™ Rating report from www.aclientplc.com/investor-relations.

Forward outlook‘BB-BB-R’ (positive to the mean) represents an acceptable rating Certain future indicators ranked ‘BBB’BB-BB-R (positive to the mean) represents an acceptable rating. Certain future indicators ranked BBBincluding Management, HCM architecture and HR procurement reflecting the investments we have beenmaking in these areas over the past two years. We believe that these will start to impact in other areas andwe are expecting to achieve ‘BBB-BBB-R’ award in 2006 with a corresponding uplift in overall productivityand organisational performance. We are currently constructing specific HC value measures to report in2006 review which will supplement the VB-HR™ Rating.
