Elevating the Role of Human Capital Metrics

Heather TorresDirector, Global Workforce Analytics

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from page 17 of Time Warner’s 2008 Annual Report

We Knew Our Analysis Had an Impact When…

…it made it into the into the annual earnings report.

Uncertainty about a possible sale or other disposition of AOL is having an adverse impact on AOL’s workforce that could negatively affect AOL’s business. In 2008, the Company began a strategic review of its ownership of AOL. The uncertainty regarding AOL’s ownership status has had an adverse impact on employee morale and AOL’s ability to attract and retain employees and thus may adversely impact AOL’s ability to implement its business strategy, as well as its advertising relationships and its ability to operate effectively or efficiently.

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Why Human Capital Metrics and Analyses Matter

The “war for talent” has been growing in recent years, driving up labor costs and making it harder to find the best and the brightest

rise of the knowledge worker – intangible assets dramatically impact stock price

Since the rise of the knowledge worker, more than 80% of the valuation of companies is in intangibles - people, intellectual property, etc.

Market Cap of the S&P 500 – in trillions

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

14

12

10

8

6

4

2

Knowing how to get “more from less” is going to be the key to gaining a competitive advantage – technology has transformed the way we work

American Worker Productivity (Y over Y increases)

The global economic crisis is forcing companies to make difficult choices – if you are forced to make job cuts, you want to make informed choices

Cumulative American Job Losses since Jan 2008 – in millions

-6.46-7

-6

-5

-4

-3

-2

-1

0

J F M A M J J A S O N D J F M A M J

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Our Success Stories

Levels from CEO by Business Unit

Levels from CEO Business Unit 1 Business Unit 2 Business Unit 3 Business Unit 4 Business Unit 5 Business Unit 6 Business Unit 7 Business Unit 8

1

2

3

4

5

6

7

8

9

31

471

640

245

47

7

19

220

287

158

36

7

1

9

113

575

573

296

78

8

1

1

10

80

121

76

39

9

1

15

262

489

269

80

12

1

3

14

110

250

113

29

3

5

30

55

131

274

216

111

44

8

1

49

103

40

7

2

1

Using simple employee lists in Excel (rosters) to create

visualizations that tell a story

Participation Rates

Number of Participants

February 2008March 2008April 2008May 2008June 2008July 2008August 2008

September 2008October 2008 November 2008January 2009 February 2009March 2009April 2009May 2009

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Trend of Favorable Response Rates

(rolling 3 month average)

Survey StatementI have the flexibility to get my work done when and where it is most productive.There are opportunities here to advance my career. I am satisfied working here.I enjoy the time I spend here.I recommend this company as a good place to work.I would stay here if offered a job at another company for the same compensation and benefits.The senior leaders in my business unit meet with us to share important information about the state of our company.

Feb 08Mar 08Apr 08May 08Jun 08Jul 08Aug 08Sep 08Oct 08Nov 08Dec 08Jan 09Feb 09Mar 09Apr 09May 09

32%

28%26%27%

25%

12%

21%

32%33%36%

32%35%36%

33%

19%

31%

538

493

294314316

256278

444411

445478

504

417411

272

411

Taking employee opinion surveys to the next level

Using data cubes to go even deeper into the metrics

Quarter

1 2 3 4 1 2 3 4 1 2 3 4 1 2

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

End of Period Headcount

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Any Questions?