taking hr to the bottom line presented by al lucia
TRANSCRIPT
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