Contingent Labor: June 2012

Business Needs Risks Reporting

Ongoing weekly, monthly and annual alignment

Contingent Labor: Governance Model

OPERATIONAL LEADERSHIP & WEEKLY MANAGEMENT

PROGRAM LEADERSHIP (quarterly)

** Sheila Peters, Executive Sponsor Flavio Esquivias, FinancePaul Adams, Legal Chris Demuth, GID HRGaurav Agarwal, Strategic Sourcing Renee Minnis, Corp HRHeather Gille, Strategic Staffing, (Team Lead) Mark Brennan, Exec Sponsor Corp IT

Heather Gille, Strategic StaffingWendy Patience-O’Brien, Strategic SourcingEmily Sullivan, LegalKean Foo, Corp IT (SME)

Weekly Management Log & Daily SupportIQ Navigator(Michelle Gates & Maggie Ferrens)

OPERATIONAL LEADERSHIP & MANAGEMENT (monthly)

-Policy questions - Overall Project Management- Level 1: Maggie Ferrens, IQN - Wendy Patience- O’Brien- Level 2: Wendy Patinece-O’Brien- Level 3: Emily Sullivan, Legal

- Website - SME- Level 1: Wendy Patience-O’Brien - Corp IT: Nina Callahan

- Vendors (new and changes) - GID IT: Kean Foo- Level 1: Wendy Patience-O’Brien - IQ Navigator

- Maggie Ferrens, Program Director- Michelle Gates, VP

Tenure Transition

3Jun 4, 2012 Company Confidential

•Step down by end of 2013

•Targets set within each Division to align with LRP

2010- 2011•24

months

•Must retire at 24 months

2012

•2013 Policy

•No exceptions

2013

Approved Tenure Approach

4

FY2013 Up to 12 month contract

3 month break or Transition to FTE

Exceptions only: 1-5%

(approved by legal)

Grandfathers(2012)

12 month contract extension

3-6 month or transition to FT (depending on

situation)

Target xx% of transition by 2012; Target yy% by 2013

FY 2013 Up to 24 month contractwith HR, Finance approval

3 month break or Transition

to FTE

Exceptions only;

1-10%(approved by legal)

or

Jun 4, 2012 Company Confidential

Contingent Labor: Length of ServiceBusiness Needs Risks Reporting

1-12 month contract 13-24 month contractType of Work - General Admin

- Non-IT-IT (project length must be disclosed)- Other functions: must partner with HR for approval

Approval Thresholds(what HR will used to determine if you qualify for 13-24 month contract)

- None needed -Explanation of complex training/onboarding (est 3-4 mos)- Specialized skillset (cannot be easily found)- HR Generalist will grant approval

Exit: Transition Plan -9 mos: reminder email to worker/ mgr-10 mos: worker highlighted to PMO, HR, Leader, Manager via report

-18 mos: reminder email to worker/ mgr-20 mos: worker highlighted to PMO, HR, Leader, Manager via report

Termination - System will term at 12 mos - System will term at 24 mos

Request for change in length of service

- up to 12 month extension given (1) change of project scope; (2) exit strategy defined ***need to define template***

- N/A

Reminder email to worker and manager

Monthly email to Leaders

PMO manages

Worker Type Maximums Key Benefits ****

Other PeopleSoft coding

Part Time*** Indefinite; up to 29 hours per week or xx% of salary

or as defined by Brand

Employee Discount401K*ESPP

Healthcare/sick pay per SF ordinance

Stock for Directors &above

Counts as headcount (0.5 – 0.75 FTE)Has clear goals; participates in focal review

No severance eligibilityEligible for prorated bonus, based on FTE

P/T

Temporary*** Clear start/end datesFor up to 9 months up to

40 hours per week

Employee Discount401K*

Corp Holidays (exempt only)Healthcare/sick pay per

SF ordinance

No headcount; not eligible for bonusNo severance eligibility

Use legal approved offer letterMust establish & honor clear start/end dates

F/TTEMP

Seasonal*** Up to 90 days (with 30 day grace) up to 40 hours per

week

Employee Discount401K*

SF ordinance applies after 90 days

No headcount; not eligible for bonusNo severance eligibility

Pplsft will auto convert to part-time at 90 days; Pplsoft auto-terms after 120 days of

inactivity

TEMP/SSNLSSNL

Intern**: Undergraduate

Up to 40 hrs/ week for up to 24 weeksHourly pay

Employee Discount 401K*

No headcountNo severance eligibilityNot eligible for bonus

TEMP/SSNLSSNL

Intern**: MBA

Up to 40 hrs/ week for up to 24 weeksSalary pay

Employee Discount Corp Holidays

401K*

No headcountNo severance eligibilityNot eligible for bonus

N/A

Contractor (W-2)

Up to 12 months or 24 month contract

None None

* 401k eligibility: at least 1000 hours worked and age 21** Interns must be approaching studies for their final year of school (i.e. entering Senior year or last year of MBA)*** Recruiting owns the recruitment process (including offer letter, background check, etc)****All categories do not include medical, dental, vision or life insurance other than the National Health Access Program

April 16, 2012 Company Confidential

Healthcare Reform could impact this

category

Healthcare Reform could impact this

category

Change Management Business Needs Risks Reporting

Corp IT GID IT Other Enterprise

Overview

• All ELT members have 1:1 meetings with

• Nina Callahan (GID IT)• developing “what

if model”• Heather Goldman (photo studio)• deep dive; open

questions

• Generalists• Staffing• Finance

Tenure

• Renee evaluating existing 20 ppl• Step down schedule• Approvals only for (1) knowledge transfer plan and (2) exit plan

• Chris Demuth (HR) and Lequisha Smith (IT)

• n/a

Chg Mgmt

• Target: June • Target: June • Target: June

Open Issues

• Tenure Length: – can this be evaluated by hours worked rather than just

length of service? (i.e. What happens for a contractor working only 20 hours a week?)

– Does consistence of service play a role? (i.e. photo studio has people work 3 weeks on; 3 weeks off, repeating the pattern for 5-6 months… how does this play into tenure?)

• Reporting– Can IQN provide reporting that shows total length or service

(in time and hours) by worker? (i.e. photostudio has workers that rotate between brands and managers don’t have visibility to entire scope of work)

Business Needs Risks Reporting

Sourcing: Vendor review

• Focus: Cleaning up house• GID and IT: increasing Agile demand• Needs assessment

Business Needs Risks Reporting

Scope: Conduct needs assessment to determine vendor alignment with business needsTimeline: Q1- Q2 FY12Status: Strategic Sourcing to review vendors

IQN Agile Other Vendors

Implementing scorecard by Feb

•Conduct IQN Information Sessions – End of June

GID/IT Strategic planning for key vendors (Nisum, Thoughtworks, AvenueCode)• Near shore development center

Tiered IT suppliers •Review Non-IT Suppliers Added new Event supplier•Review Payroll Supplier

Sourcing: Annual Review of Descriptions & Rates

• Align with business needs and market rates• Conduct annual review of job descriptions and pay rates• Benchmarked rates within IQN supplier network • Align job titles and rates with Gap Inc. pay scales

Business Needs Risks Reporting

Scope: Evaluate job descriptions and pay scales to align with market conditionsTimeline: Q2-FY 12Status: In Process

Sourcing/Legal Policy and Contract Revisions

• Research employment law?• Revise policies • Draft audit clause amendment• Communicate to suppliers • Change management

Business Needs Risks Reporting

Scope: Define position on acceptable visa and worker status. Amend contracts to include audit clause: Q2-FY 12Status: Exploration/Definition

Service ProvidersBusiness

Needs Risks Reporting

Approved service provider contracts are defined by project and not by company:

• Application Services Group (VPR)• ITP for Asia and Europe (Infosys)• Stores Development Contract • Infrastructure (IBM)• IGP Project (Cap Gemini)• Mainframe Re-hosting (Infosys)

Done!

Immediate Business Need: Branding and Process Map

Business Needs Risks Reporting

People Process Timeline

Wendy, Heather and Gina Vigil (CSSC)

Developed new layout of website

Pending new Gapweb

1099 EmployeesBusiness

Needs Risks Reporting

Worker actively services other

clients and spends/will

spend less than 50% of his/her

work time servicing Gap

Inc.

Worker is automatically exempt from CW Program (Appendix A)

Establish as vendor through

CSSC

Worker actively services other

clients and spends/will

spend more than 50% but less than 100% of his/her work

time servicing Gap Inc.

Worker may be exempt from CW Program

Contact Gap's Employment Legal team to

assist in determining

whether worker is exempt from

CW Program

Worker spends all of his/her

work time servicing Gap

Inc.

Worker is not exempt from CW Program

Worker must be processed

through IQN

CONTINGENT WORKER ADDITIONAL EXEMPTIONSIn addition to the automatic exemptions provided in Appendix A of the Gap Inc. Contingent Worker Policy, the following services may be considered exempt under certain circumstances:

• Photographers, including editing and duplication• Videographers, including editing and duplication• Models/Fit Models

Contingent Labor: Length of ServiceBusiness

Needs Risks Reporting

1-12 month contract 13-24 month contractType of Work - General Admin

- Non-IT-IT (project length must be disclosed)- Other functions: must partner with HR for approval

Approval Thresholds(what HR will used to determine if you qualify for 13-24 month contract)

- None needed -Explanation of complex training/onboarding (est 3-4 mos)- Specialized skillset (cannot be easily found)- HR Generalist will grant approval

Exit: Transition Plan -9 mos: reminder email to worker/ mgr-10 mos: worker highlighted to PMO, HR, Leader, Manager via report

-18 mos: reminder email to worker/ mgr-20 mos: worker highlighted to PMO, HR, Leader, Manager via report

Termination - System will term at 12 mos - System will term at 24 mos

Request for change in length of service

- up to 12 month extension given (1) change of project scope; (2) exit strategy defined ***need to define template***

- N/A

Reminder emailMonths 10/20email to Leaders

Does PMO

manage?

FAQ

• Can we manage assets by hour vs length of service?• What happens if I have an onshore contract, transition to offshore… does

the move to offshore qualify for the 90 day break?• What is someone moves from a staff aug assignment to managed services

and back to staff aug? Do we look at original start date or does managed services count as their 90 day break?

Business Needs Risks Reporting

Prevention

• Leader Accountability– Corp IT releases reports with ITLT leaders names

• Dashboard to ELT (Michelle and Eva)– 6 month distribution– Organizational Priority

• Extensions– Approved only with exit plan (date and knowledge

transfer)

Business Needs Risks Reporting