1. Becoming an Employer of Choice Sandra Hofmann SVP & COO Turknett Leadership Group Atlanta Practical Insights into Building a Culture of Retention

2. What keeps you around? 1. Continuous employment 2. Feeling that my real skills and capabilities are being put to use 3. Real esprit de corps in the group 4. Strong program of employee benefits 5. Real rewards that are inherent in the work 6. Pay, better than average 7. Able to explore new areas and to grow as much as I can 8. Fairness in promotion, based on performance with promotion from within 9. Good working conditions, accommodations consistent with level of position 10. Knowing what is going on in the organization 11. Strong pressure to accomplish task, a challenge 12. Mistakes are permitted and there is little chance of being released 13. Feeling my job is important 14. Company policies that are known and fair 15. Knowing what is expected of me 16. Being told how well I am doing 17. Sufficient responsibility and authority 18. High standards of accomplishment that I must "reach " 19. Opportunity to use initiative, no direct or close supervision 20. Having a manager whom I respect

3. When you are an employer of choice, then everybody knows your name! "Best lists" appearances.  Positive name recognition  Often cited in key publications CEO has wide name recognition.  Your current CEO has a positive name recognition when professionals in your industry are asked in surveys or focus groups 75% of the time. There is a published book written about your firm or CEO within the last five years. Giveaway/takeaway ratio. Talent competitors talk positively about you 25% of the time. Recruiters list you in top employers. In top three choices of top performers over 50% of the time.

4. When you are an employer of choice, then everyone wants to be with you! Employee Referral rate >50%. Former employees do/would return.  Over 10% of employees that voluntarily quit in the past three years have returned. Over 50% express an interest in returning when surveyed. Employees send the "same" message.  When your employees are asked what they tell strangers about "why the firm is a great place to work" over 50% of their answers include your top selling point. Turnover rate of top performers.  The turnover rate of your top 25% rated employees is below 5%. CEO mentions people practices.  Your current CEO mentions specific HR or people practices by name in 25% of their external and 50% of their internal speeches.

5. Are you writing your story?

6. Make it real or you’ll be left hanging!

7. Why does retention matter? Loss of key players affects corporate productivity Replacement cost high Cost of vacancy can impact shareholder value Losing talent to competitors erodes competitive advantage High attrition affects the morale Inexperienced employees decrease customer satisfaction Retention is a strategic imperative for the enterprise! Source: Retaining talent: Retention & Succession in the Corporate workforce, Aberdeen Group, 2005

8. Why is retention is a hot topic now? 70% of HR managers believe retention is primary concern 55% of HR managers expect retention to be significant challenge within next 5 years 40% of HR managers have seen increase in turnover Demographics are changing – generational diversity drivers Source: Atlanta Business Chronicle February 2006 Headhunter.net: “where employees with good jobs go when they are having a bad day”

9. How battle ready are you? 1. Do I understand the difference between voluntary & involuntary turnover in my company? 2. What level of voluntary turnover is acceptable? 3. How much does attrition cost my company? 4. What themes are at the root cause for turnover? 5. What is being done to solve the root cause?

10. Battle for talent heating up 80% of employees hunting or open Global struggle to hire talent: 40% worldwide  44% US  78% Mexico  66% Canada  58% Japan  13% India Source: Manpower survey February 2006 1. Sales Rep 2. Engineers 3. Nurses 4. Technicians  production /operations  engineering  maintenance Accountants 5. Accountants 6. Administrative Assistants 7. Drivers 8. Call Center Operators 9. Machinists 10. Management /Executives Top 10 jobs most difficult to fill

11. Why employee retention fails Too much emphasis on pay, benefits, perks  88% leave for reasons other than pay  but – work IS about the money! The best do typically offer better than competition Blindly following other companies’ best practices  Match culture, benefits, practices to needs & desires of employees  Worthless if paper based & haphazard Failure to train managers & hold them accountable  Monitor voluntary turnover, new-hire retention rates, employee-engagement survey scores & reward the best  No one can afford the luxury of another bad manager Retention is a process – not a program

12. Who has the edge? (when it comes to recruiting & developing talent) Procter & Gamble General Electric Google UnitedHealth Group UPS Exelon Starbucks FedEx Anheuser-Busch Nordstrom FMC Technologies Walgreen PepsiCo Nestle BP Source: Fortune February 2006: America’s Most Admired Companies

13. How do the best companies retain? Provide open & frequent communication  Top management more accessible  Employees engaged at all levels Expect excellence from everyone  Challenge employees often  Move employees to new jobs Offer broad based & on-going development  Not focused just on high potentials  Promote from within Source: Fortune February 2006: America’s Most Admired Companies

14. A framework for retention

15. Training Recognition & Feedback Orientation Career Development Advance- ment Work/Life Balance Team Cohesion Open Communication Lack of Stress Emphasis on Quality Benefits Autonomy | Challenge Resources | Pay Satisfaction Job Satisfaction Role Ambiguity Inter-group Cooperation Participation Employee Relations Customer Focus Leadership Capability Lack of Bureaucracy Innovation Equity/Fair Treatment Strength of Culture Meaningful Work Department Manager Organization Structure Immediate Manager

16. Participation Employee Relations Customer Focus Leadership Capability Lack of Bureaucracy Innovation Equity/Fair Treatment Strength of Culture Meaningful Work Department Manager Organization Structure Immediate Manager

17. Retention & Leadership Job Level Participation in Decision Making  Desire decision latitude to help influence direction of their team  Biggest Influence: employee’s immediate manager  Especially important for younger employees  Identified by Gallup to retain top talent: do my opinions seem to count? Meaningful Work  Core dimension of job satisfaction  Want to feel that their work is making contribution toward the good of the company  Foster a sense of purpose: working for a cause as well as a company  Engaging company vision that shows clear connection to employee’s effort

18. Retention & Leadership: Team Level Employee Relations: Defined as the process of maintaining a positive and cooperative workforce via fair & considerate treatment  Identified by Gallup to retain top talent: Does my supervisor seem to care about me as a person?  Direct relationship with boss more important than pay/perks  Important for both young & older employees  Positive supervisor/employee relations inspire commitment  One of the top 5 reasons employees stay in a firm

19. Retention & Leadership: Organization Level Quality of Management  Direction of organization key driver of commitment  Trust in senior leadership key driver of commitment & 3 year return to shareholders Bureaucracy  One of the hallmarks of “average” companies  Minimize the management burden by keeping hierarchies in check Innovation  Companies viewed as innovative create energy & pride throughout organization

20. Retention & Leadership: Organization Level Equity/Fair Treatment  Doesn’t mean overpay, just pay fairly according to internal & external market  Must embrace diversity & treat all employees fairly Strength of Culture  Reputation or branding as an “exclusive” organization & market leader creates pride in organization  Helps people feel they are a part of something important Customer Focus  One of the five most powerful drivers of workforce commitment  One of the key priorities of most admired companies

21. Work/Life Balance Team Cohesion Open Communication Lack of Stress Emphasis on Quality Benefits Autonomy | Challenge Resources | Pay Satisfaction Job Satisfaction Role Ambiguity Inter-group Cooperation

22. Retention & Work Design: Job Level Autonomy  Talented employees want independence & ability to make decisions without going through bureaucratic channels  Creates sense of control over environment & increased responsibility Challenging work  Talented employees want a job that is challenging & has a large scope of responsibility  One of top 5 reasons employees stay  Create great jobs by letting people stretch their skills Adequate Resources  Identified by Gallup to retain top talent: Do I have the materials & equipment I need to do my work right?

23. Retention & Work Design: Job Level Role Clarity  Identified by Gallup to retain top talent: Do I know what is expected of me at work?  Unclear expectations & ambiguous demands from boss lead to turnover Compensation & Benefits  Offer a variety of creative benefits  Is not a source of satisfaction, but is a driver of dissatisfaction  Choice of benefits increasingly important  Stock, profit sharing & pension plans top 3 benefits correlated with commitment  One of the key priorities of most admired companies  Communication of benefits one of the five most powerful drivers of workforce commitment  Many employees don’t have a good understanding of their entire benefit package Job Satisfaction  Though not always related to productivity, has always been linked to turnover & intention to quit

24. Retention & Work Design: Team Level Team Cohesion  Coworker relations top reason to stay  Best large companies mimic small companies with smaller autonomous units  Predominant characteristic of “100 best companies to work for in America” Role Harmony  Decreasing conflicting demands increases job satisfaction Open Communication  Information sharing between manager and team important  Clear communication systems used by effective leaders  Openness in team facilitates overall cohesion & satisfaction

25. Retention & Work Design: Organization Level Stress  Free up time for employees to relax & reduce stress with variety of programs (Work-free weekends, thinking/meeting-free days, limitations on business trips, flexible vacation time)  Conflict & overload common work-related factors to stress Emphasis on Quality  Quality products/services create pride in organization, fostering commitment Work/Life Balance  Flexible hours one of top reasons cited  EAPs, medical/dental care, family time-off programs, allowance for personal time  Job sharing & telecommuting  Recognition of personal/family life-powerful factor  Especially important for women who do not value promotion opportunities

26. Training Recognition & Feedback Orientation Career Development Advance- ment

27. Retention & Development: Job Level Orientation  Realistic job preview helps set expectations  Orientation critical in the first 3 days Training  Interpersonal & technical training popular incentive programs  “Train like crazy” one of recommendations to retain staff

28. Retention & Development: Team Level Recognition  Must provide special recognition for top performers  Recognition for good work one of most common reasons for staying  Recognition doesn’t have to be financial! Feedback  Regular dialogue on performance issues  Identified by Gallup as important for positive climate: In the last six months, has someone at work talked to me about my progress?  Ongoing feedback by immediate supervisor critical.  Use of 360’s very effective tool for giving insight and focusing development

29. Retention & Development: Organization Level Career Development  Put people in jobs that challenge them  One of top 3 reasons for staying  Educational incentives more effective than dollar compensation  One of five most powerful drivers of workforce commitment  Identified by Gallup as important for positive climate: This last year, have I had opportunities at work to learn and grow? Do I have the opportunity to do what I do best everyday? Opportunities for Advancement  Must be communicated throughout entire organization  One of the factors that inspires commitment

30. Retention through professional excellence Children’s Healthcare of Atlanta  Great Expectations HomeBanc Mortgage Corporation  Associate Emergency Fund Randstad North America  On-boarding process The Home Depot  Veterans Recruiting Doctors Hospital of Columbus  Combined community & workforce programs CARE  Global Gender Equity & Diversity initiative City of Atlanta  Growing service during right sizing

31. Other Important Determinants of Retention Before you hire - Selection  Hiring the right person both in skills & fit will save money in long run & increase retention After they leave - Exit Interviews  Wait 2 weeks to let emotions subside & find out why people are leaving  Don’t just file the information. Do something with it. Create an “Alumni” Network  Stay in touch  Remember your reputation as an “employer of choice”

32. Training Recognition & Feedback Orientation Career Development Advance- ment Work/Life Balance Team Cohesion Open Communication Lack of Stress Emphasis on Quality Benefits Autonomy | Challenge Resources | Pay Satisfaction Job Satisfaction Role Ambiguity Inter-group Cooperation Participation Employee Relations Customer Focus Leadership Capability Lack of Bureaucracy Innovation Equity/Fair Treatment Strength of Culture Meaningful Work Department Manager Organization Structure Immediate Manager

33. Questions?

34. Thank you shofmann@turknett.com 2310 Parklake Drive, Suite 500, Atlanta, GA 30345 www.turknett.com