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What Drives Retention Across All Industries? Accountability! Dick Finnegan June 30 th , 2010. Presentation Title Presenter’s Name • Date. Today’s Agenda. A CIA Question Data: Will Good Employees Quit? Principles & Strategies: The Rethinking Retention sm Model

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  1. What Drives Retention Across All Industries? Accountability! • Dick Finnegan June 30th, 2010 Presentation Title Presenter’s Name • Date

  2. Today’s Agenda • A CIA Question • Data: Will Good Employees Quit? • Principles & Strategies: The Rethinking Retentionsm Model 4. Tactics: 3 Case Studies of Accountability & Retention 5. Free Stuff: Parts 1 and 2

  3. Today’s REAL Agenda Provide you with convincing data and clear thinking so you can influence your executives to establish retention accountability across your organization, top to bottom

  4. CIA Story A “milk-toasty” CIA story… Why do CIA employees change departments?

  5. 3 #s The Media Doesn’t Report • 11% • 31% • 3-5 X

  6. High Performers Never Concerned • Jobs were much harder to find in 2008 • Many employees still quit…your chances of losing a good worker in the 2008 recession were 89% as strong as in the booming economy of 2007 • Layoffs lead to losing muscle after fat Therefore, it is likely that your good workers can always find jobs and they are the ones who are leaving

  7. “Resume Tsunami” 3 Studies on Employee’s Post-Recession Intentions • Deloitte warns companies to expect a “resume tsunami” as 49% are looking or plan to look as the economy improves (September, 2009) • Right Management reports 60% plan to look as the economy improves (November, 2009) • Execunet and Finnegan Mackenzie found more than 90% of executives would take a recruiter’s call and more than half are already looking (July, 2009)

  8. The Rethinking Retentionsm Model • Key Phrases are “Research-Based” and “Process- Based” • Research into all published studies, company best- practices, and academic publications…based entirely on retention results • Experience working across top US companies and on 6 continents • Elevator Speech: High-retention companies install business processes for retention as they do for sales, service, quality, and safety • Fills the Void as employee retention has no established, research-based process…until now

  9. Process or Program-Driven? Retention Processes driven by executives from the top like sales, service, quality, and safety Retention Programsdriven by HR from the side like hiring, performance management, others

  10. Process-Driven? Probably Not

  11. Research-Driven, Process-Based

  12. 10 Points for Rethinking Retention 3 Principles… Point #1. Employees quit jobs because they can Point #2. Employees stay for things they get uniquely from you

  13. 10 Points for Rethinking Retention 3 Principles… Point #1. Employees quit jobs because they can Point #2. Employees stay for things they get uniquely from you Point #3. Supervisors build unique relationships that drive retention…or turnover

  14. 7 Retention Strategies Strategies for Supervisors… Point #4. Hold supervisors accountable for achieving retention goals Point #5. Develop supervisors to build trust with their teams

  15. 7 Retention Strategies Strategies for People Management Processes… Point #6. Narrow the front door to close the back door Point #7. Script employees’ first 90 days Point #8. Challenge policies to ensure they drive retention

  16. 7 Retention Strategies Strategies for Top Management… Point #9. Calculate turnover’s cost to galvanize retention as a business issue Point #10. Drive retention from the top, as executives have the greatest impact on achieving retention goals  

  17. Who Owns the Strategies? HR or OPS? For Supervisors… • Point #4. Hold supervisors accountable for achieving retention goals MORE OPS • Point #5. Develop supervisors to build trust with their teams MORE HR For People Management Processes… • Point #6. Narrow the front door to close the back door MORE HR • Point #7. Script employees’ first 90 days MORE HR • Point #8. Challenge policies to ensure they drive retention MORE HR For Top Management… • Point #9. Calculate turnover’s cost to galvanize retention as a business issue MORE OPS • Point #10. Drive retention from the top, as executives have the greatest impact on achieving retention goals  MORE OPS

  18. Accountability Secret Sauce Point #3. Supervisors build unique relationships that drive retention…or turnover Point #4.Hold supervisors accountable for achieving retention goals Point #6. Narrow the front door to close the back door Point #9. Calculate turnover’s cost to galvanize retention as a business issue Many of these ideas used to cut call center turnover 50% and nurse turnover 54%

  19. Executives Managers Supervisors Experience tells us that the best way to make things happen in organizations is to drive them from top to bottom…think sales, service, quality, safety Intuitively, the same should be true for retention but is there data from respected research that tells us this is true?

  20. Supervisors’ Impact on Turnover “If you have a turnover problem, look first to your managers”…Gallup Primary reason for seeking a new job is disliking boss’s performance…Yahoo Employees stay for managers first and co-workers second…salary.com Poor leadership causes over 60% of all employee turnover… Saratoga Institute “When employees stay, it is because of their immediate managers”…National Education Association Employees who stay primarily for their supervisors stay longer, perform better, and are more satisfied with their pay…TalentKeepers Given the high cost of turnover, it is clear that poor managers…dramatically increase the cost of operations…Kenexa

  21. The Real Power of Supervision More importantly, a study by Kenexa confirms that employees’ satisfaction with pay, benefits, learning, development, and advancement is “mediated” by their relationships with their supervisors and concludes: “Offering a higher salary or developmental/advancement opportunities may not be enough to retain employees” So it appears that poor supervision overcomes the benefits of pay and development…and leads to higher turnover

  22. 4 Thoughts to Ponder 4 Thoughts on Supervisors and Retention • Poor supervisors will trump good employee programs • good programs + good supervisors = retention • good programs + poor supervisors = turnover • 2. Poor supervisors also trump good pay and development, and drive higher turnover • 3. “Supervisors” refers to anyone who supervises people including executives and senior managers so all must have retention skills • 4. If one or more of your supervisors fails to build effective retention relationships, what other legitimateadvantages do you offer your employees that your competition for talent does not?

  23. Accountability Drives Retention! Additional Landmark Studies… • Supervisory accountability is the first recommended solution for retention of nurses and teachers • How many organizations hold supervisors accountable for retention? 14% in one study, 11% in another • Retention accountability is a “butterfly effect” initiative • Moves retention discussions from “co-dependency” to accountability

  24. An Accountability Clue 2-ball off the 6-ball: The secret to influencing the CEO to set retention goals is to ask the CFO to put a $ cost on turnover first…then both the CEO and CFO become advocates for what you’ve always known, that retention must be managed on the operations side of your company as well as in HR

  25. Why Finance? • Because Finance is the keeper of all things about measuring $...essential for moving retention from an HR-only issue to a company-wide initiative? • Because the CEO and other operations executives listen to Finance and the CFO? • Because Finance has more credibility on financial matters than HR? • Because Finance is more likely to support their own findings than yours? • Because Finance might under-estimate the cost of turnover until they study it, and then will become your strongest ally for establishing retention goals? • Answer: All of the above

  26. Cost Per Exit • Direct costs…exit processes, temporary help, recruiting and hiring costs, training and onboarding + • Indirect costs…Revenues per FTE divided by 240, weighted for contribution; multiply times # days to fill vacancies and half # days to ramp up = • Starter cost of turnover…does not include lost morale, turnover due to turnover, other immeasurables • Full cost model www.TheRetentionFirm.com

  27. Setting Retention Goals Base metric on history and think short-term • Monthly might be better than annual, and first-90-days might be best based on your tipping point Drive goals top to bottom, from CEO to firstline supervisors Reinforce with reports, performance appraisals, bonus, incentive, pay • How do you reinforce sales, service, quality, and safety?

  28. Reporting Retention Results Who reports? Finance…because Finance reports the important #s How? $s saved/lost compared to goal • “In May our retention goal was ___% and achieving it would save us $___ . We achieved that goal and we did indeed save $___” • “The leading departments/managers who achieved their goals were ___ and the ones who missed their goals were ___.”

  29. 3 Paths to Accountability & RetentionFor High-Turnover Industries #1: SunTrust Banks: Driving accountability through turnover’s cost #2: Florida Hospital Flagler: Using cost and LOS data to define specific accountability #3: Hilton’s Call Centers: Specifying accountabilities for HR, Training, and Operations

  30. #1: SunTrust Banks Situation: My career launcher…CEO said cut turnover, I said “You don’t understand…” Finance conducted cost study for 6 cascading job groups, CFO announced results Top operations executive set goal for all branches to cut turnover 10% over previous year/tied to bonus Bob from back of the room, “Now let me get this straight…”

  31. #1: SunTrust Banks • Turnover fell 19%, saved $4 MM • Primary retention tool was monthly accountability report with managers’ names, employees lost, progress toward goal • No pay increases, no new benefits, no additional manager training…just accountability connected to annual bonus

  32. #2: Florida Hospital Flagler Situation: 99 bed hospital, part of a Adventist hospital corporation whose executives directed us to their most troubling retention hospital Overall turnover 21% Completely decentralized hiring with few common processes Top management concerned, open to change

  33. Job Group Results

  34. Leavers by LOS

  35. Hospital Retention Plan Reduced nurse turnover 56% by… • Establishing nurse retention goals for the organization, departments, and managers for 90-, 180-, and 360-day retention • Implementing other tools to support goal achievement including new hiring and onboarding processes, specific leadership training with post-training assignments, and other initiatives

  36. #3: Hilton’s Call Centers Situation • 5 centers averaged 55% annual turnover and company reported annualized turnover and monthly turnover • Missing was knowledge that 50% of new agents failed to reach 90 days • Challenge included what to measure and what goals to set • Accountability was perplexing as many touched new hires in the first 90 days

  37. Hilton’s Call Centers • Reduced turnover in half in 4 months… • Structuring retention accountability for HR, training, and operations via 91-day meetings • Requiring managers send a 90-day retention report to the CEO • Implementing new standards for 90-day retention, app/hire ratio, and employee referrals • Assigning new hires to best supervisor • Tracking new hires “retention likelihood” weekly with coaching • Implementing a facilitated realistic job preview • Designing structured interview to measure intent to stay

  38. 3 Paths to Accountability

  39. Research-Driven, Process-Based

  40. Free Stuff, Slide 1 For Information On… • Retention accountability for nurses and teachers • Exit interviews managers conduct with supervisors • Realistic Job Previews • Employee Referrals to obtain 50% of new hires • New Hire Interview Questions • Stay Interviews Please write your “order” on the back of your business card

  41. Free Stuff, Slide 2 Module #1 of the online Certified Employee Retention Professional Program (CERP) • Earn 1 HRCI credit for completing Module #1 • Earn up to 26 HRCI credits for completing the CERP program Please write “Module #1” on your business card Contact: DFinnegan@RetentionInstitute.com 407.694.3390

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