Presented by Ray Halagera President/COO Career Systems International Building the Business Case: Calculating the Return on Investment of Employee Engagement Initiatives September 12, 1007

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 2 Below the waterline – what I am NOT A slow talker Humorous From training/HR A lecturer

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 3 What We Will Cover This Afternoon Making the business case Calculating the cost of the problem What can be done to reduce the cost The ROI from “Just Doing It” Wrap up

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 4 What We Will NOT Cover This Afternoon

Making the business case for training My familiarity with making a business case for training is: what's a business case? never did it before did it once before with help from others have done it a few times have done it many times I could probably teach you a few lessons Live Meeting Poll Changes directly made to this slide will not be displayed in Live Meeting. Edit this slide by selecting Properties in the Live Meeting Presentation menu.

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 6 Making The Business Case WIFM

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 7 Making The Business Case WIFM What is the PROBLEM? = high turnover of tellers What does the problem COST the business? = costs of losing a teller What’s a SOLUTION? = management training How much does the solution REDUCE the cost of the problem? = the reduced costs associated with reduced voluntary attrition of tellers What’s the solution going to COST? = cost of management training What the solution’s ROI?

Cost of Loss How much does it cost your organization when an employee quits? nothing probably some expenses are going to be incurred somehow, someway, equal to 5% or less of the person's salary some significant expenses, equal to 25% to 75% of a person's salary gigantic expenses, equal to 100% to 200% of the person's salary Live Meeting Poll Changes directly made to this slide will not be displayed in Live Meeting. Edit this slide by selecting Properties in the Live Meeting Presentation menu.

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 9 The Costs of Losing a Teller Time to replace = 30 days Replacement’s salary = $25,000

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 10 Components to the Costs of Loss 1. Costs due to teller leaving 2. Costs to recruit replacement 3. Costs to orient/train replacement 4. Costs of lost productivity 5. Costs of lost sales

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 11 The Costs of Losing a Teller Vacancy costs $2,292 Exit interview and processing time $58 Management time to do status assessment $30 Severance costs $ Costs due to person leaving

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 12 The Costs of Losing a Teller Recruiter $3,750 Hiring department’s time $505 Internal candidates’ interviewing time $144 T & E of candidates $90 Escalated salary $2,500 Escalated benefits $ Costs to recruit replacement

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 13 The Costs of Losing a Teller Bringing replacement “on line” $558 Replacement’s time in orientation $375 Staff time providing orientation $500 Departmental training $527 Management time providing on- boarding $ Cost to orient/train replacement

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 14 The Costs of Losing a Teller Lost productivity of position $1,040 Lost productivity of department $240 Lost knowledge, skills & contacts $6,250 Ramp-up to productivity for replacement $3,600 Coworkers’ lost time in getting replacement up to speed $125 New hire mistakes and rework $360 Delay in completion of project(s) ???? 4. Costs of lost productivity

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 15 The Costs of Losing a Teller 5. Costs of lost sales = ??????

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 16 To Summarize: The Costs of Losing a Teller Costs due to teller leaving $2,981 Costs to recruit replacement $7,614 Costs to orient/train replacement $1,644 Costs of lost productivity $5,962 Costs of lost sales ?????

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 17 The Cost of Losing a Teller in Terms of Salary Total Cost of Loss = $18,200 + ???? As % of salary = 73% + ????

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 18 The Costs of Losing ‘Em Infrastructure Professionals150% of salary IT Professionals176% of salary Engineering Professionals200% of salary Middle Managers241% of salary Critical Skills10x salary (?)  Resource: Corporate Leadership Council

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 19 Questions?

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 20 We have a problem… It cost BIG $$$ to lose talent What can be done to reduce “the cost of loss?”

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 21 What Keeps Talent Engaged and Onboard? What keeps YOU onboard?

What keeps you onboard? What kept you at a job you've loved? The money Your boss Your coworkers The challenge of your job The learning you receive The career path The perks Live Meeting Poll Changes directly made to this slide will not be displayed in Live Meeting. Edit this slide by selecting Properties in the Live Meeting Presentation menu.

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 23 What Keeps Talent Engaged and Onboard? The money? The boss? The team? The work? The learning?

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 24 48% 42% 32% 25% Exciting work & challenge Working with great people & relationships Career growth, learning & development Fair pay Supportive management/great boss Top 5 Stay Factors for 17,000 people  Resource: CSI Retention Driver Study

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 25 So….What Can a Manager Do? It Comes Down to… “ONLY” 26 STRATEGIES

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 26 Management Basics: A-Z

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 27 If You Have Time for Only ONE Strategy: ASK!

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 28 Insist On “Stay” Interviews What about your job makes you jump out of bed in the morning? What makes you press the snooze alarm? If you won the lottery and resigned, what would you miss most? If you went back to a position in the past that you loved, what would it be? Why? What can I do to keep you? What would entice you away?

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 29 The ROI from “Just Do It” ROI = Cost saved by reducing turnover + Value of improved productivity from increasing engagement ÷ Investment in doing something

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 30 The Cost of Loss Consider 200 tellers 30% turnover $25,000 average salary 100% of salary = cost of loss Bottom line impact = $1.5 million!!!  Resource: Turnover ROI Calculator

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 31 The Cost of Loss Consider the ROI for reducing turnover by just 10% annual benefit = 10% of $1.5 Mil = $150K investment = $200/employee = $40 K ROI = 375%!!!  Resource: Turnover ROI Calculator

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 32 The Return on Investment First USA: By enhancing employee satisfaction and improving retention through a career development initiative, delivered $1.5 million cost savings to the bank and 147% return-on-investment. Investment Management Co.: Retention initiatives saved over $5.1 million in intellectual capital and contributed to a 22% decrease in turnover in first year. USA Bank : Engagement and retention initiative increased customer loyalty from 47% to 53% and that each 1% improvement translates into $7 million in additional banking business

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 33 Resources Scary Stats ( Retention Convention White Paper Retention Driver’s Study Turnover ROI Calculator The “Jerk” Survey ( *Unless indicated by a web-address, upon request “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, April, 2003)

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 34 On Bosses “…some cause happiness wherever they go; others, whenever they go” Oscar Wilde

© 2006 Career Systems International, Beverly Kaye and Sharon Jordan-Evans 35 Thank You!!!