Regione Umbria Uses SAS® Human Capital Management to Monitor Expenses and Control Labor Costs

Umbria, located in central Italy, is one of the smallest of the Italian regions, and is the only one without access to the sea. The area is known for its forests and its natural, historical and cultural beauty. "Regione Umbria" is a public agency that, among other things, takes care of Umbria's economic development by means of financial support and strategies for local development.

Based on a series of legislative decrees and laws, the regions of Italy were instructed to develop mechanisms to reduce inflation and to monitor their labor costs, expenses and financing systems. Umbria has approximately 800,000 inhabitants, a considerable 11,000 of whom work in the public health sector. As a result, personnel costs clearly represent the most relevant item in current public sector expenditures for the region. In fact, recent trends show that personnel costs have increased by 10 percent, while public investments have increased by only 4.6 percent.

In response, Regione Umbria decided to invest in SAS Human Capital Management to monitor the public health sector expenses and comply with the appropriate laws. "Costs were increasing too fast compared to public investments, and we needed a single strategic view of our human resources data, including information on the payroll system and employee attendance," says Giancarlo Rellini, Human Resources Consultant at Regione Umbria.

Monitoring Costs and Analyzing Personnel Data
Keeping personnel costs down in Umbria's public health sector was a high priority since wages account for half of the expenses of the sector. Therefore, having a means to accurately and continuously monitor personnel costs was indispensable in developing management control of budget procedures.

However, while personnel cost monitoring is of huge importance, it represents only one of the required elements for efficient and responsible human resources management. Other factors included analyzing personnel attendance and absence data in order to predict eventual absence peaks by day of the week or time of year, and thus follow up with appropriate corrective actions. Says Rellini, "We wanted to simulate the consequences caused by the adoption of new organization models in order to evaluate the economic impact."

"Additionally, we needed a dynamic company organization chart, connected with the personnel attendance control system, that allows important results from the organizational, economic and operative viewpoint to be obtained. A particular analysis of inter-company benchmarking on specific activity indicators would allow us to verify sensible personnel recruitment policies." Relline adds.

Another challenge facing Regione Umbria is relations with the labor unions. Particularly in the health sector, the unions are very powerful and they could balk at the challenges of reorganization or trimming the work force. "Dealing with unions can be quite complicated," says Rellini. "The goal is to work with them to develop a new system of managing human resources, to diversify and enrich professional roles and to define engagements for union negotiation at a regional level."

Developing Targets
Based on these requirements, Regione Umbria realized that they needed to have a system that would facilitate the development of an efficient employee attendance/absence control system, an accurate and exact organizational chart, and complete and flexible personnel records that could be continuously and easily updated.

The targets that could be attained through having such a system would be the continuous and exact monitoring of personnel costs, benchmarking analysis among departments and companies, simulation of the consequences of expense trends, forecasting the costs resulting from the adjustment of specific contract items, arranging information flow in real time to the federal and regional Controlling Offices to allow them to statistically evaluate the labor cost trends and adoption of a "union relations" system that could allow successful and efficient management of the regional and company contracts.

Confidence in SAS
Regione Umbria began seeking a system that could address these requirements and goals. After comparing a number of different software vendors, they chose SAS. "We made our decision based on SAS' reputation in the market for human resources solutions and the fact that SAS had already developed a portal for health services for another customer, so we were comfortable that they knew what they were talking about," explains Rellini. "Also, we had been using other SAS solutions successfully for some time already, and this gave us confidence that choosing the SAS Human Capital Management solution for this project was a wise choice."

Regione Umbria is using the SAS solution to enable strategic data control, a more systematic organization data analysis for information creation and the creation of an intranet to allow data distribution and communication. "With SAS, we now have full database production, indicators for monitoring personnel management procedures and performance and the facility to report at various levels," Rellini adds. "All this will allow us to make strategic decisions."

A Healthy Result
Regione Umbria now takes data from payroll, attendance records and personal data to put together a strategic view of its human capital. Major results of work so far include: the development of a historical employee dossier, analysis of the staff dimension, management of an organization chart, analysis of absence, payroll, contract, and management data, as well as development of a query environment and reporting facility for the final user.

"We now have access to information that we did not have before, which was the whole point of this project," continues Rellini. "We can now run queries and reports, and the result is more accurate expense monitoring. Expense trends are verified with benchmark analysis, and payroll simulations verify the impact on expenses due to organization structure modifications. There is better management of assigned personnel roles, and a better recruitment system. We can also now make yearly cost calculations. Further, we have the ability to perform analysis of absences/absenteeism by operation unit and pinpoint absence peaks, as well as detail best attendance for use in a reward system."

Future plans for the system are to increase existing information, especially for managerial positions. "In the next few months, we expect to be able to make some important decisions about other key changes," concludes Rellini. "We will further use the SAS system for the extension of payroll items analysis, analysis of training courses carried out by man hours and costs and analysis of the data resulting from the employee evaluation system. But overall we have already realized an improved and more efficient human resources planning environment."

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