taking hr to the bottom line presented by al lucia

TAKING HR TO THE

BOTTOM LINE

Presented by

AL LUCIA

www.adlassociates.com

People>>>>>>>>>

>>>>>>>>>>>>>>>>>>>

>>>>>>>>>>>>>>>$$$

THE PEOPLE BUSINESS

Selection; Development; Assessment; Compensation; Recognition>>>>>>>>>>>>>>>> >>>Engagement; Commitment; Performance;>>>>>>>>>>> $$$

Important Studies aboutThe People Side of Business

…what the experts are saying!

“The more highly engaged employees are, the more likely they are to put

customers at the heart of what they do and how they think about their jobs,

and the less likely they are to leave their company.”

Towers Perrin Talent Study

“Highly satisfied groups of employees often exhibit above-average levels of

customer loyalty, productivity, employee retention, safety, and

profitability.”

Gallup, 2004 Survey of 1.5 million employees

“Employee engagement levels at high-growth companies exceed those of

lower-growth companies by more than 20%.”

Hewitt Associates Survey of 4 million employees

“There is a direct correlation between the quality of the boss/worker relationship

and various elements of the workers job like career advancement and high

stress levels.”

Career Builder Survey May 2004

“Disengaged workforce is costing the US $350 billion annually. This equates to

11% of an organization’s payroll begin paid out for unproductive time from

disengaged employees.”

Gallup, 2004

“The front-line manager is the key to attracting and retaining talented

employees.”

First Break All The RulesBuckingham and Coffman

400 companies surveyed

“A safe, pleasant workplace is high on good workers’ list of expectations.”

Kiplinger Letter Spring 2004

“An organization that makes work as fulfilling as possible will develop and

retain the most productive workers and enjoy the most loyal customers.”

The ROI of Human Capital Jac Fitz-enz

“Share performance (stock price) of companies with high employee trust

levels outperform companies with low trust levels by 186 percent.”

Watson Wyatt, 2003

“GTE metrics show that every 1% improvement in employee engagement boosts customer satisfaction by 0.5%.”

Harvard Business School The New ROI: Return on Individual

Employee Engagement Survey Results

2005

Conducted by

&

87 Organizations

30 Different Industries

Over 850,000 Employees

Overall Survey Conclusion…

“You will not get sustained employee engagementwithout the human touch!”

Lowest Scoring Item…Effectively handling the emotional side of change

42% rated their company’s effectiveness below average

Second Lowest Scoring Item…Actively reinforcing application of learning and development activities

Averaging just 2.78 on a 5 point scale

Leadership Caring Makes A HUGE Difference in Engagement!

14% 14%12%

28% 27% 26%

51% 51% 50%

81% 80%78%

93% 92% 91%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004

Em

plo

yee E

ng

ag

em

en

t fo

r Q

22 R

esp

on

se

Strongly DisagreeDisagreeNeutralAgreeStrongly Agree

If I scored (Q22) “1” … engagement 12% favorable.If I scored (Q22) “2” … engagement 26% favorable.

If I scored (Q22) “3” … engagement 50% favorable.If I scored (Q22) “4” … engagement 78% favorable.If I scored (Q22) “5” … engagement 91% favorable.

Correlation between

EOS survey question on

“management cares

about employee’s well-being”

and favorable Engagement Index

Talent Management

“The best opportunity for connecting to your organization’s

bottom line”

Deloitte November 2005

FOCUS ON CAPTURINGTHE

HEARTOF YOUR EMPLOYEES

Deloitte Nov 2005

TALENT CRISIS “HIGHLIGHTS”

• Decreasing Loyalty and Tenure

• Growing Discontent

• Information Fatigue

THE40-20-40

RULEFor Making Things

Happen!

THE 40-20-40 RULEFor Making Things Happen !

• 40 % The Need to do it

• 20 % The Skills to do it

• 40 % The Accountability for doing it

HR TRENDS

HR TRENDS

• Recruiting and Retaining Talent

“The front-line manager is the key to attracting and retaining talented

employees.”

First Break All The RulesBuckingham and Coffman

400 companies surveyed

Hire Easy - Manage Tough

Hire Tough -Manage Easy

HR TRENDS

• Recruiting and Retaining Talent

• Disease Management

“There is a direct correlation between the quality of the boss/worker relationship

and various elements of the workers job like career advancement and high

stress levels.”

Career Builder Survey May 2004

• Rising health care cost • Absenteeism• Turnover• Stress• Psychological health• Work/Life Balance

There are leaks in your bottom line….

…Adds up to lost productivity

Need Proof?

Did you know that for every 100 employees:

• 78 consider their jobs as stressful• 64 are overweight, 49 have high cholesterol• 10 suffer from alcohol or drug problems• 25 smoke• 20 have cardiovascular disease• 25 have high blood pressure• 50 don’t wear their safety belts regularly• 10 have diabetes

Source: US Department of Health and Human Services

This all adds up to…..

• Stressful work environment

• Higher turnover rate

• Lowered morale

• Higher healthcare costs for employees/employers

….. Lots of Money!

S0…What can you do?

Preventive and Informative Investments

ROI

• $1.70 –to- 1 First Year• $2.00 –to- 1 Second Year• $2.46 –to- 1 Third Year

Source: Workforce Management, 3-05

HR TRENDS

• Recruiting and Retaining Talent

• Disease Management

• Measurement of Results

PRACTICALMETRICS

Gain leadership alignment on value that will be produced for the business

KEY METRIC AREAS

> Customer Satisfaction

Internal and External

> Turnover Cost

Overall…not line items

Turnover CalculationsHard Costs At $10.00/Hr

Predeparture

Exit Interview $37

Separation Processing $12

Vacancy Costs

Temporary Fill $1288

Overtime $690

Advertising $110

Recruiting Admin. $121

Selection

Interviewing $138

Testing $100

Reference Ck. $34

Info. Literature $50

On-The-Job Training $1150

Total Hard Costs $3730

SOFT COSTS At $10/HREmployee’s Lost Productivity $80

Co-Workers Lost Productivity $97

Supv. Lost Production $207

Supv. Interim Lost Productivity $138

New Employee’s Learning Curve

$482

Supv. “Teaching” Time $483

Current Business Lost $350

New Business Not Acquired $350

Domino Effect $350

Total Soft Costs $2,537

Turnover Calculations

Soft Costs 2537.00

Hard Costs 3,730.00

Total Hard & Soft Cost

$6,267.00

Turnover Calculations

BALANCED SCORECARD

Customer

People

Sales

Profits

HR TRENDS

• Recruiting and Retaining Talent

• Disease Management

• Measurement of Results

• Diversity/Inclusion

HR TRENDS

• Recruiting and Retaining Talent

• Disease Management

• Measurement of Results

• Diversity/Inclusion

• Branding

“Highly satisfied groups of employees often exhibit above-average levels of

customer loyalty, productivity, employee retention, safety, and

profitability.”

Gallup, 2004 Survey of 1.5 million employees

We fulfill dreams through theExperience of Motorcycling

Proven ManagementTeam

Steady, ManageableGrowth

Trust

EmpoweredEmployees

StakeholderRelationships

Respect

People>>>>>>>>>

>>>>>>>>>>>>>>>>>>>

>>>>>>>>>>>>>>>$$$

TAKING HR TO THE……………………………………………………………………………………………………………

BOTTOM LINE

With Al Lucia