LIP SERVICE: Are Your Employees Really As Important As Your Customers?

Transcription

1 LIP SERVICE: Are Your Employees Really As Important As Your Customers? Dick Finnegan June 24 th, 2014 WELCOME To Orlando, My Hometown! Copyright C-Suite Analytics, 2014 All Rights Reserved

2 Finnegan Background Recovering HR director solved turnover for Siberian banks, African gold mines, Chinese muls- nasonal corporasons and the CIA Author, Rethinking Reten*on in Good Times and Bad, endorsed by BusinessWeek as offers fresh thinking for solving the turnover problem in any economy Author, The Power of Stay Interviews for Engagement & Reten*on, top- selling SHRM- published book 2012 & 2013 Noted expert by BusinessWeek, Chief Execu*ve Magazine, & Consul*ng Magazine suiteanaly/cs.com 2

3 Please Your Employees and You Please Your Customers My high- vision, first CEO 3

4 Today s AMBITIOUS Agenda 6 Chunks 1. Report Dollars for E & R 2. How to Report Survey scores 3. Survey frequency 4. Power of Stay Interviews 5. ForecasSng 6. New exit interview idea What makes us happy? Free how- to- do- this tools suiteanaly/cs.com 4 4

5 Bad News or Good News? The Economist Intelligence Unit survey of C- Suite ExecuSves: What is most likely to harm your organizason financially over the next 12 months? 53% say insufficient talent n What are the obstacles to HR taking a greater role in strategic planning? 41% say Is too focused on processes and rules not a big picture person n HR survey: Which top priority do you solve least effecsvely? Engagement & Reten*on suiteanaly/cs.com 5

6 Employees As Important As Customers? 1. How ogen do you survey? Customer vs Employee Surveys 2. For major issues, how many days for your company to implement changes? 3. When major issues, how many days Sll you re- survey? 4. Do real consequences happen for managers that directly impact rasngs, pay, promoson opportunises? 5. How many managers have you terminated in the past year due to survey results? 6

7 Sales vs Engagement/RetenSon CEO AcSon Sales Engagement RetenSon Sets monthly & annual goals? Yes Beat last Sme or beat benchmark ; few set goals SomeSmes Report goals, progress to Board? Yes Rarely Rarely Hold managers accountable in meaningful ways? Usually Hardly ever Rarely 7

8 Poll QuesSon # 1 By words AND acsons, who does your CEO think is more important? q Customers? q Employees? q Both the same? 8

9 Line of Sight Revenue$ Expense$ = Profit$ 9

10 Line of Sight Revenue$ Expense$ = Profit$ Engagement Scores + Turnover %s =? 10

11 Line of Sight Revenue$ Expense$ = Profit$ Engagement Scores + Turnover %s =? 11

12 Poll QuesSon #2 Do you report either your survey scores or turnover percentages with dollar costs? q YES? q NO? 12

13 U.S. Voluntary Quit Percentages, Post- Recession U.S. Bureau of Labor Sta*s*cs

14 Chunk #1: Report Dollars/Turnover Actual client turnover costs by job: ü Physician $225,808 ü Sogware engineer.$131,000 ü Call center representasve $29,447 ü Truck loader/unloader $4,955 Cost Per Hire + LOST PRODUCTIVITY, Not % of Annual Pay 14

15 Placing $ Values on Turnover $ Turnover = Cost to Replace + Lost ProducSvity Lost ProducSvity = Employee s Daily $ ContribuSon X Days Job Open + Ramp- Up Days 15

16 Hospital Example/12 Months Costs, 5 Job Bands Job Group Example Jobs Cost/exit Cost/12 months Non-skilled EVS, food svs, admit rep $8,503 $255,090 Skilled Hourly patient care tech, phleb., sec 12, ,215 Licensed Hourly Nurses rehab ther., radio. tech, resp. therapists inpat. nurses, emerg. nurses, surg. nurses 20, ,128 46,250 2,350,000 Exempt mgrs, directors, case mgrs 57, ,284 TOTAL $4,295,717 suiteanaly/cs.com 16

17 Dollars Drive RetenSon Accountability Manager RetenSon Goals Results Cost of Turnover Merbach All T/O 15% 13% $105,378 1 st Yr T/O 5% 3% 31,254 Finnegan All T/O 15% 10% $71,598 1 st Yr T/O 5% 5% 49,560 Murphy All T/O 15% 22% $221,369 1 st Yr T/O 5% 11% 88,321 suiteanaly/cs.com 17

18 Chunk #1: Report Dollars/Engagement Either A. Distribute correlasve studies B. Conduct correlasve studies with your company s data C. Apply C- Suite AnalyScs engagement cost calculator 18

19 How Much More Do Engaged Employees Produce? q Gallup: 22% more profitability/ lower turnover (TO)/higher earnings per share (EPS) q GPTW InsStute: 20% more producsvity/lower TO/higher EPS q Hewix: % engaged correlates with higher shareholder returns (S/H) q Kenexa: double S/H returns q WorkUSA/Watson Wyax: 26% more revenue per employee 19

20 Introducing The very best and only Engagement calculator I know 20

21 The Research Source Watson WyaO analyses show that a significant improvement (one standard devia*on) in employee engagement is associated with a 1.9 percent increase in revenue per employee. Debunking the Myths of Employee Engagement, Watson Wyax now Towers Watson

22 Engagement Calculator Example Ø OrganizaSon earns $100 MM in annual revenue Ø Conducted engagement survey that reported scores on a scale of 1-10 Ø Targeted score was 8 Ø Actual organizason score was 7 Ø DistribuSon of scores indicates 1 SD = 1 suiteanaly/cs.com 22

23 Engagement Calculator Example If organizason score is 1 SD below target score SD = 1 Actual Score Target Score OrganizaSon is losing 1.9% of revenue.019 x $100 MM = $1.9 MM 23

24 Engagement Calculator Example Technology Department Ø Ø Ø Ø OrganizaSon earns $100 MM in annual revenue Conducted engagement survey that reported scores on a scale of 1-10 Targeted score was 8, actual technology Ø department score was 9 Ø DistribuSon of scores indicates 1 SD = 1 Ø Technology department salaries & benefits = 10% of organizason s total salaries & benefits 24

25 Technology Department Example If technology dept. score is 1 SD above target score SD = 1 Target Score Technology Dept. Score Technology dept is achieving 1.9% of addisonal revenue.019 x $100 MM = $1.9 MM x.10 = $190,000 when technology department salaries & benefits comprise 10% of organizason s total salaries & benefits 25

26 This Engagement Calculator Works! The C- Suite Analy*cs Engagement Calculator is a welcomed, one- of- a kind tool to help organiza*ons fully grasp the value of engaged employees as well as the huge number of dollars lex on the table when employees don t give their best. Perhaps its greatest value is that it dis*nguishes managers who influence engagement from those who do not, in specific dollar values. This calculator is based on broad- based research and its algorithms have a solid sta*s*cal founda*on. It can work with any engagement survey and assumes that survey measures engagement in a valid way. Dr. Gary Borich, Ph.D Endowed Fellow, QuanStaSve Methods Program The University of Texas at AusSn suiteanaly/cs.com 26

27 Chunk #1: Report Dollars/Engagement Either A. Distribute correlasve studies B. Conduct correlasve studies with your company s data C. Apply C- Suite AnalyScs engagement cost calculator 27

28 Chunk #2: Survey Scores Gallup/Bersin U.S. Companies on Track to Spend $1.53 Billion Each Year to Improve Engagement on Surveys & Programs suiteanaly/cs.com 28

29 Only Top Box Counts! Engaged employees work with passion and feel a profound connecson to their company. They drive innovason and move the organizason forward Not engaged employees are essensally checked out. They're sleepwalking through their workday pu{ng Sme but not energy or passion into their work AcSvely disengaged employees aren't just unhappy at work; they're busy acsng out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish 29

30 Poll QuesSon #3 Does your survey company give you an engaged score of 50 or above? q YES? q NO? 30

31 Poll QuesSon #3 Does your survey company give you an engaged score of 50 or above? q YES? q NO? If YES, you are likely ge{ng high and middle scores combined and only high scores drive producsvity 31

32 Benchmark means standard, average, mediocre so which statement drives more acson? CEO, our turnover is 19% and the benchmark is 20% OR 32 CEO, our turnover is 19% and it s cossng us $7.9 MM each year

33 Chunk #3: Survey Frequency Problem: Would you wait a year to re- survey your dissassfied customers or pasents? SoluSon: Track each managers improvements by quarter vs by year Because managers drive your producsvity and revenue metrics! suiteanaly/cs.com 33

34 Poll QuesSon #4 How ogen do you survey your employees? q Once per year q Less frequently q More frequently q We don t survey 34

35 Are Your RetenSon Efforts Driven By AccountabiliSes or Programs? Business AccountabiliSes driven by execusves from the top like sales, service, quality, & safety suiteanaly/cs.com 35

36 Are Your RetenSon Efforts Driven By AccountabiliSes or Programs? Business AccountabiliSes driven by execusves from the top like sales, service, quality, & safety RetenSon Programs driven from the side like town hall meesngs, employee appreciason week, newslexers suiteanaly/cs.com 36

37 Are Your RetenSon Efforts Driven By AccountabiliSes or Programs? Business AccountabiliSes driven by execusves from the top like sales, service, quality, & safety RetenSon Programs driven from the side like town hall meesngs, employee appreciason week, newslexers 86% of the Sme suiteanaly/cs.com 37

38 Poll QuesSon #5 How does your company survey solve engagement & retenson? q Employee programs? q Manager accountabilises? 38

39 Supervisors Impact on Engagement & RetenSon If you have a turnover problem, look first to your managers Gallup Employees stay for managers first and co- workers second salary.com Employees levels of engagement higher when their supervisors had higher levels of engagement DDI When employees stay, it is because of their immediate managers NaSonal EducaSon AssociaSon Employees who stay primarily for their supervisors stay longer, perform bexer, and are more sassfied with their pay TalentKeepers suiteanaly/cs.com 39

40 The Real Power of Supervision Kenexa interviewed 1,000 recently- quit employees and asked about pay, benefits, development, advancement and relasonships with supervisors and found supervisor rela*onships influenced all other opinions, concluding Offering a higher salary or developmental/advancement opportunity may not be enough to retain employees suiteanaly/cs.com 40

41 Do Clinical Directors Really Drive RetenSon? Compared one hospital that held nurse managers accountable for reten*on versus others that implemented various programs & found Accountable hospital nurse turnover down 41% vs. others stayed the same. RecommendaSon: Hold clinical directors accountable for achieving retenson goals - Hardwiring Right Reten*on, the Advisory Board Company s Health Care Advisory Board suiteanaly/cs.com 41

42 One Big Lesson Learned It s not what you give them it s how you treat them Survey 25% sample quarterly & remove supervisors who do not improve Insanity: Doing the same thing over and over again and expecsng different results suiteanaly/cs.com 42

43 Chunk #4: Leaders Conduct Stay Interviews Structured discussion a leader conducts with each individual employee to learn the specific acsons she must take to strengthen that employee s engagement and retenson with the organizason Bring informason that can be used today Focus on individual employees including top performers Put managers in the soluson seat suiteanaly/cs.com 43

44 Stay Interview Key Ingredients Cascade Tops Down Conducted by supervisors vs. HR Separate from Performance Have managers forecast retenson Gather stay & leave reasons at the top Top- Selling SHRM- Published Book 2012 & 2013 Once/year consnuing employees and twice for new hires suiteanaly/cs.com 44 44

45 3 Stay Interview Success Stories Florida Hospital Zephyrhills All turnover 37%; nurse turnover 70% Burcham Hills ReSrement Community Nurse turnover 70%; 100% retenson first 180 days Novo 1 Call Centers Agent turnover 20% suiteanaly/cs.com 45

46 Poll QuesSon #6 Do your managers conduct stay interviews? q Yes? q No? 46

47 Chunk #5: ForecasSng Secret: ForecasSng is a sales SOLUTION because it drives salespeople to close sales So why not ask managers to forecast engagement & retenson? 47

48 RetenSon Forecast HeatMap Leader: Rodriguez Perf RaSng/ 5 Hi, 1 Lo Green 1+ yrs Yellow 6-12 Months Red 0-6 Months RetenSon Plan Kim Johnson 4 Provide mentor for Burt Brown 5 Develop skills for possible promoson to Cindy Stone 3 Pleased with current role & circumstance Ralph Jimenez 2 Coaching for performance suiteanaly/cs.com 48 48

49 Which Engagement ForecasSng QuesSon is Best? 1. Will your survey results increase this Sme? 2. What will be your survey score this Sme? 3. Will this employee score in the top box? suiteanaly/cs.com 49

50 Only Top Box Counts! Engaged employees work with passion and feel a profound connecson to their company. They drive innovason and move the organizason forward Not engaged employees are essensally checked out. They're sleepwalking through their workday pu{ng Sme but not energy or passion into their work AcSvely disengaged employees aren't just unhappy at work; they're busy acsng out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish 50

51 Which Engagement ForecasSng QuesSon is Best? 1. Will your survey results increase this Sme? 2. What will be your survey score this Sme? 3. Will this employee score in the top box? suiteanaly/cs.com 51

52 Poll QuesSon #7 Does your company conduct exit surveys in any form? q YES? q NO? 52

53 Poll QuesSon #8 Please raise your hand if you have significantly improved your company by conducsng exit surveys 53

54 Chunk #6: Managers Conduct Exit Interviews Managers ask supervisors 1. Did you see this exit coming? 2. What was your forecast for this employee? 3. What holes were in your stay interview stay plan? 4. Who else on your team do you need to address? 5. What lessons have you learned?

55 Fresh- thinking for solving the turnover problem in any economy BusinessWeek Dollars Goals Stay Interviews Forecasts Account- ability Accountability- Driven like Sales & Service to ü Reduce Cost of Turnover ü Improve Employee Engagement ü Improve Revenue & Profitability suiteanaly/cs.com 55

56 6 Chunks 1. Report Dollars 2. How to Report Survey scores 3. Survey frequency 4. Power of Stay Interviews 5. ForecasSng 6. New exit interview idea Which has greatest impact for your organizason? Versus which is easiest to do? suiteanaly/cs.com 56 56

57 Poll #9 Gallup s 100- Year Commitment Surveying ciszens of the world to learn what brings most happiness over 100 years. So far the answer is a. Good health? b. A good job? c. Love and respect from others? d. Money for needs and more? e. Bexer life for your children? suiteanaly/cs.com 57

58 Gallup s 100- Year Commitment a. Good health b. A good job c. Love and respect from others d. Money for needs and more e. Bexer life for your children suiteanaly/cs.com 58

59 Please Complete EvaluaSon Form! Signing in SHRM Bookstore 12:15 12:45 suiteanaly/cs.com Copyright C-Suite Analytics, 2014 All Rights Reserved 59

60 To Obtain ü How to Cost Turnover & Engagement ü Engagement CorrelaSons to ProducSvity ü The Stay Interview Manager Training Game Please Leave Your Business Card Include # of Employees DFinnegan@C- SuiteAnalyScs.com suiteanaly/cs.com 60