Driving Engagement & Wellbeing through Powerful Strategic Planning. Data Driven Decisions & Assessing Employee Engagement

Transcription

1 Driving Engagement & Wellbeing through Powerful Strategic Planning Data Driven Decisions & Assessing Employee Engagement 2016 GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 0 Who We Are Arthur J. Gallagher key facts 680+ Sales/Service Offices 30 Countries** $4.6B Total Revenues 21,500+ Employees Commercial Insurance & Risk Mgmt Benefits & HR Consulting Claims Management Primary Businesses 1 1

2 A BRIEF INTRODUCTION 2 Today s workforce challenge Unique Needs & Wants! 3 2

3 Top Five Human Resources Challenges Controlling healthcare expenses Recruiting qualified employees Staying current on healthcare reform and other regulations Retaining talented employees Increasing employee satisfaction/engagement While healthcare costs remain the #1 challenge, gaining an edge in the competition for talent ranks is a key priority for high-performing organizations striving to create an employer of choice environment. 4 How do we put it all together? 5 3

4 WHY DO WE CARE ABOUT WORKFORCE PLANNING/PROJECTIONS? WHY DO WE CARE ABOUT WELLNESS & EMPLOYEE ENGAGEMENT? 6 The Evolution of Wellbeing Then Physical health emphasis Benefits strategies for cost management Now Multi-dimensional (employee and family) wellbeing with strong social networks Employee value proposition, become an employer of choice Right program and vendor Right culture and environment Participation incentives Inspire change, support, sense of purpose Inconsistent alignment with mission/vision/values, desired culture, key business objectives Wellbeing as a cultural imperative that drives engagement and enables high performance 7 4

5 The Multiple Dimensions of Wellbeing Physical Health Social/ Emotional Health Financial Health Career Health Community Health The WHOLE person comes to work every day... & each employee s wellbeing influences individual and organizational performance 8 It s All About Culture Behavior is highly influenced by culture, environment and social norms Culture Behavior Risk Cost 65 to 70% of an individual s overall health status is determined by individual lifestyle behaviors ~US Centers for Disease Control~ 9 5

6 Organizational Wellbeing: Drives Engagement An organization is healthy when its whole, consistent, and complete, that is, when its management, operations, strategy and culture fit together and make sense. Minimal Politics Minimal Confusion High Morale High Productivity Low Turnover Build a cohesive leadership Team Create Clarity Organizational Health Reinforce Clarity Over- Communicate Clarity Source: Patrick Lencioni, The Advantage (2012) 10 Global Stress Epidemic KEY SOURCES OF STRESS: 71% Financial 69% Work 55% Family 51% Relationships The health epidemic of the 21 st century -World Health Organization Source: The Cost of Stress in Your Organization & What You Should Do About it, mequilibrium 11 6

7 Achieving Financial Wellness HOW? Inventory Evaluate Deploy Page Paternalistic Basic Protection Participant as Priority Plan as Voluntary Benefit Plan as Differentiator Plan Governance as Priority Plan Health Basic Tools 13 7

8 Step 1: Inventory How much money are you investing in your employees? What programs do you offer your employees? What current vendors provide tools & education under the heading of financial wellness? Page Step 2: Evaluate Is your budget allocation efficiently deployed? Do you communicate with your employees in the same way regardless of career stage? Where are your employees located and does that matter in some material way? Page

9 Workforce Evaluation & Plan Analytics Page Generational Readiness Page

10 Workforce Projection Analytics Workforce Projections with Customized Assumptions Budget and Cost Projections by Group Anticipate Staffing Needs Holistic Cause and Effect of Benefit Changes 18 Step 3: Deploy Annual evaluation Measure Appropriate vendor & GRS tools Deploy Strategic Evaluate Workforce Evaluation, Vendor Inventory Why, Who, What 19 10

11 WHAT IS (AND ISN'T) ENGAGEMENT? 20 The Engagement Impact Employee engagement predicts outcomes market penetration revenue & profit margin employee turnover customer satisfaction employee safety customer safety on-time delivery employee wellbeing productivity & efficiency decreased on-the-job injuries shrinkage control reduced legal cases positive social media impact brand awareness! ONLY if it is measured properly 21 11

12 The Service Profit Chain Sequence Highly Engaged Employees Highly Engaged Customers Enhanced Enhanced Business Clinical and and Operational Outcomes Source: Adapted from Heskett, Sasser and Schlesinger (1997); Heskett, Jones, Loveman, Sasser and Schelsinger (1994); 22 The Evolution of Engagement Pre-1990 s 1990 s Employee Satisfaction Employee Commitment Late 1990 s - Early 2000 s Employee Engagement Satisfaction measures happiness and contentment. Commitment includes satisfaction and also attachment to the organization. Engagement includes satisfaction, commitment plus energy and enthusiasm

13 NOT ALL ENGAGEMENT METRICS ARE EQUAL 24 Defining Engagement We define Employee Engagement as A pronounced state of enthusiasm characterized by effort, pride, and passion which fosters a mutually committed relationship between employees and organizations resulting in the enduring pursuit of organizational and personal goals

14 Defining Disengagement 26 Measuring Engagement We measure employee engagement using the items. A willingness to put in more effort than expected Being proud to work for the organization A willingness to promote the organization as a great workplace Not recently considering other job opportunities Feeling a strong sense of job satisfaction Feeling your work strongly contributes to the organization s success Feeling compelled by the organization s mission Recently added Job Passion items 27 14

15 THE BENEFIT OF MEASURING ENGAGEMENT PROPERLY 28 The Benefit of our Engagement Metric Our Employee Engagement Metric WITH Job Passion vs. Engagement Metric WITHOUT Job Passion 2xIncluding Job Passion within our engagement metric has doubled the ability to predict key performance outcomes. On average, the predictive power is twice as great as commonly used engagement metrics

16 Our Engagement Metric By the Numbers The ROI of a modest increase in employee engagement customers would rate their experience a 9 or 10 15%more customers would definitely recommend the 11%more organization to others 66% $3.13(Million) fewer employees will voluntarily exit the organization to pursue other opportunities projected annual savings in turnover-related costs per 1,000 employees 30 Turnover & Economical Impact Voluntary Separation - All By reducing turnover a few percentage points it can lead to a significant cost savings 12.6% 24.1% EXAMPLE SCENARIO Total Employees 500 First Year Turnover 25% Average Compensation $60,000 Cost of Turnover per employee $90,000 (1.5 x average compensation) OVERALL TURNOVER FIRST YEAR TURNOVER Voluntary Separation - All FIRST YEAR TURNOVER SCENARIOS Turnover rate # of employee turnovers Cost of turnover Savings realized from reduced turnover 25% 125 $11,250,000-20% 100 $9,000,000 $2,225,000 15% 75 $6,750,000 $4,500,

17 THE STATE OF ENGAGEMENT 32 The State of Employee Engagement The State of Engagement Recent studies have shown a decline in employee engagement particularly in the United States and many European Union nations. & The Prevailing View Measuring and managing the wrong or incomplete set of engagement drivers is mostly to blame

18 Our Employee Engagement Model 34 Engagement Profiles in Todays Workplace 37% 22% 19% 16% 6% Engaged Seekers Campers Detaching Separated Effort Significantly Above the National Average Significantly Below the National Average Not Significantly Different from the National Average Pride Promote Not Leaving Satisfied Contribute Mission 35 18

19 Generational Impact Today s youth are disrespectful and undisciplined. Plato (428 BC-347 BC) Our youth now love luxury. They have bad manners, contempt for authority; they show disrespect for their elders and love chatter in place of exercise; they no longer rise when elders enter the room; they contradict their parents, chatter before company; gobble up their food and tyrannize their teachers. Socrates (469 BC-399 BC) 36 Generational Impact GENERATION BIRTH YEARS DEFINING EVENTS GENERATIONAL CHARACTERISTICS Traditionalist 1925 to 1945 Great Depression, Dust Bowl, Hitler s Germany, World War II, Communism Overly cautious, less likely to take risks, hierarchical, loyal and patriotic, rule makers/followers Baby Boomer 1946 to 1964 Jet age, national TV, Alaska & Hawaii, Civil Rights Movement, Space Exploration Economically optimistic, individualistic, prefer achievement over relations, competitive Generation X 1965 to 1980 MLK, Jr. Assassination, Working Mothers, Nixon & Watergate, Vietnam Homesick, in need of attention but not used to supervision, prefer nonroutines, anti-institution Millennials 1980 to 2000 Iran Hostage Crisis, Space Shuttle Challenger, Fall of Berlin Wall and Soviet Union, Walkman, Personal Computer, Internet and Technology reliant, image-driven, multi-tasking, open to change, confident, team-oriented, information rich, impatient, adaptable Next Generation: Generation Z 37 19

20 Generational Impact Engagement - Overall Norm Traditionalist Baby Boomer Generation X Millennials Generation Z 38 Generational Impact GENERATION KEY DRIVERS Traditionalist Strong sense of belonging to the organization Senior leadership is responsive to employee recommendations Recommend the organization Baby Boomer Recommend the organization Employees are encouraged to report information concerning safety Value the relationships with employees Generation X The organization has enriched the employee s career Value the relationships with employees Strong sense of belonging to the organization Millennials Excited about the direction and future of the organization Practice the mission in their daily operations Ability to communicate with senior leadership 39 20

21 Workforce Evaluation & Plan Analytics Page IN CONCLUSION 41 21

22 Bringing it all together Wellbeing Engagement Financial Physical Organizational Performance Career Social Emotional 42 Questions and Discussion Thank You For Your Time Today GALLAGHER BENEFIT SERVICES, INC. ARTHUR J. GALLAGHER & CO. BUSINESS WITHOUT BARRIERS 43 22

23 Consulting and insurance brokerage services to be provided by Gallagher Benefit Services, Inc. and/or its affiliate Gallagher Benefit Services (Canada) Group Inc. Gallagher Benefit Services, Inc., a non-investment firm and subsidiary of Arthur J. Gallagher & Co., is a licensed insurance agency that does business in California as Gallagher Benefit Services of California Insurance Services and in Massachusetts as Gallagher Benefit Insurance Services. Securities and Investment Advisory Services may be offered through NFP Advisor Services, LLC, Member FINRA/SIPC. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, a Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Not all individuals of Gallagher and none of Gallagher Fiduciary Advisors, LLC individuals are registered to offer securities or investment advisory services through NFP Advisor Services, LLC. NFP Advisor Services, LLC. is not affiliated with Arthur J. Gallagher & Co., Gallagher Benefit Services, Inc. or Gallagher Fiduciary Advisors, LLC. Neither Arthur J. Gallagher & Co., NFP Advisor Services, LLC, nor their affiliates provide accounting, legal, or tax advice