The 9 th Annual Engagement and Retention Research Study Christopher Mulligan Chief Executive Officer Commit. Engage. Excel. Chief Executive Officer.

The 9th Annual Engagement and Retention Research

Study

Christopher Mulligan

Chief Executive Officer

Commit. Engage. Excel.

Today’s Briefing

• National Business, Engagement and Retention Trends• What are Organizations Doing

to Drive Engagement and Retention• Discover What “Best in Class”

Organizations are Doing Differently• Strategies and Tactics for 2013

© TalentKeepers

• We are a leader in:- Award-winning engagement and retention solutions- Proven results in boosting performance, retention, service and business results

• We help our clients address business issues with a range of talent management strategies, tactics and tools- Employee Engagement - Employee

Retention- Standard & Customized Surveys - On-boarding - Leadership Development - Research &

Benchmarking- Co-worker Collaboration

3

What We Do

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Select Clients we have helped to enable their employees to Commit, Engage and Excel

Results are clear…Engaged Employees Deliver Better Performance

5

Happy and Engaged Employees:

31% Higher Productivity 37% Higher Sales 3x Greater Creativity

Harvard Business Review, January 2012

People & Strategy, April 2012

Aberdeen Group, August 2012

Talent Management Magazine, December 2012 © TalentKeepers

6

TalentKeepers 2013 Engagement and Retention Trends Survey (TERTS) Participation

© TalentKeepers

• 618 U.S. based organizations

• Company Size (Employees): 5000+ 26%

500 – 5000 36% < 500 38%

• 22 Industries Represented; top 5 are: Financial Services/Insurance Healthcare/Pharmaceutical

Business ServicesRetail Sales Educational Services

Employment and Workplace Trends

REMOVED SLIDES

Human Resources

Operations

Other

Sales

Marketing

Finance

Customer Service

Legal

69%

31%

Job Function of Survey Respondents

© TalentKeepers

Individual contrib-utor

Supervisor

Manager

Director

Vice President or higher

15%

4%

30%

28%

23%

12%

3%

24%

31%

29%

Job Roles of Survey Respondents

20132012

14%

14%

12%

9%7%

6%

5%

5%

4%

4%4%

3% 3%Participating Industries

Finance/Insurance/Real Es-tate

Healthcare/Pharmaceutical

Business Services

Retail

Educational Services

Automotive-Mfg.

Government

Transportation

Oil/Gas/Petrochemical

Computer/Electronics/IT

Hospitality

Aerospace

Telecommunications

National Business, Engagement

and Retention Trends

Significant changes to Compensation & Benefits

The addition or removal of major business practices

No significant changes have occurred

Significant layoffs, downsizing, or rightsizing

Changes in business strategies

31%

27%

11%

43%

59%

29%

22%

16%

33%

58%

19%

22%

17%

23%

54%

18%

18%

21%

21%

50%

Organizations are Stabilizing as the Economy Improves

2013

2012

2011

2010

Decrease more than 26%

Decrease 21% to 25%

Decrease 11% to 20%

Decrease 1% to 10%

No Change

Grow 1% to 10%

Grow 11% to 20%

Grow 21% to 25%

Grow more than 26%

1%

1%

4%

13%

31%

39%

7%

2%

2%

2013 Forecast for Labor Growth

Strongly Disagree

Disagree Slightly Disagree

Slightly Agree

Agree Strongly Agree

4% 4%

9% 10%

34%

38%

7%8%

5%

18%

30%

33%

Employee Engagement is a Strategic Priority for My Organi-

zation

2013 2012

Strongly Disagree

Disagree Slightly Disagree

Slightly Agree

Agree Strongly Agree

10%

4% 4%

11%

34% 35%32%

68%For Best in Class, the

Strategic Priority is Clear

Best in Class

Others

Training costs

Stress

Service quality

Recruiting costs

Lost organizational knowledge

Productivity

Employee morale

26%

67%

39%

35%

54%

66%

76%

41%

42%

44%

48%

54%

67%

74%

Top 7 Areas Impacted by Employee Turnover

and Lack of Engagement

2013

2012

© TalentKeepers

Engagement vs. Disengagement

Higher productivity

Increased morale

Increased commitment

Higher service quality

Stronger co-worker relationships

Higher performance evaluations

Better attendance

Decreased turnover

Better safety records

Decreased job burnout

No difference

87%

84%

82%

71%

70%

69%

65%

56%

38%

36%

2%

Engaged Employees in Our Orga-nization, When Compared to Dis-

engaged Employees, Have:

Employee Engagement Strategies

65%

18%

17%

Yes No, but under consideration No budget for 2013

A Majority Now Budget Funds and Resources to Support Engagement Initiatives in 2013

18Yes No

100%

56%

44%

Which Organizations Budgeted Funds to Support Employee Engagement Strate-

gies in 2013?

Best In ClassAll Organi-zations

Not at all effective

Slightly effective

Moderately Effective

Very Effective

5%

28%

52%

15%

2%

16%

57%

25%

How Effective is Your Organization at Retaining High Performing Em-

ployees?

Budgeted for 2013 engagement strategies

Yes No

70%

30%

53%47%

Best in Class: Strategies are in Place to

Engage and High Performers

Best in Class

All Organizations

© TalentKeepers

Not at all Effec-tive

Slightly Effective Moderately Effective

Very Effective0%

10%

20%

30%

40%

50%

60%

70%

Best in Class are More Effective at Retaining High Performing Employees

Best in ClassAll Organizations

26%

34% 34%

6%9%

21%

62%

8%

Do You Link Engagement Metrics to Performance and Profitability?

Budgeted for 2013 engagement strate-giesDid not budget for 2013 engagement strategies

100%

Best in Class

43%57%

All Organizations 

Yes

No

Do you link employee engagement metrics to organizational performance

and profitability?

17%

83%

Direct Cost

YesNo

9%

91%

Indirect Cost

Do you know the cost of attrition and lack of engagement for your

organization?

Normal Survey RespondentsJob/Career Factors

Leadership Factors

Organizational Factors

Co-Worker Factors

59%

25%

10%

6%

48%

35%

12%

5%

Why are People Leaving? Job and Career are Rising in Im-

portance

2012

2013

Poor fit based on the skills required

Missed expectations on job duties and/or work schedule

Inadequate assimilation and coaching

Lack of advancement opportunities

Inadequate training

Co-worker conflict

37%

30%

17%

12%

4%

1%

34%

31%

18%

13%

1%

2%

The Biggest Reason New Hires Leave Organizations within the

First 12 Months

2012

2013

Around 2 years

Around 3 years

Around 5 years

More than 10 years

23%

54%

18%

5%

Attrition After One Year of Employment:

High Risk at 3 Years

Lack of upward career advancement opportunities

Lack of career growth experiences

Leadership

Job burnout

Retirement

Lack of skills development

Co-worker conflict

50%

21%

11%

10%

3%

3%

2%

43%

23%

16%

10%

4%

3%

1%

The Biggest Reason Employees with More Than One Year of Tenure Leave

2012

Engagement and Retention Trends

What are Organizations doing

to Engage and Retain their Staff?

© TalentKeepers

BEST IN CLASSOn-boarding tools

Career planning and development

Succession planning

Anonymous surveys

Job specific training

Action planning

Competitive benefits

Financial bonuses/incentives

Tuition reimbursement

Engagement goals for leaders

Leader/Employee coaching meetings

Non-financial incentive programs

54%

47%

46%

44%

41%

40%

39%

38%

38%

38%

37%

36%

Strategies being used in 2013 to engage and retain talent

BEST IN CLASSSenior leadership visibility

Vacation & holiday plan

Competitive compensation plans

Customer Satisfaction Training

Flexible work schedules

Multi-rater/360 surveys

Engagement/Retention leader training

Casual dress

Retention goals for leaders

Virtual offices/work from home

Promotion programs

Non-anonymous surveys

35%

35%

34%

30%

29%

26%

25%

22%

21%

19%

12%

6%

Strategies to Retain and Engage for 2013, continued

16%

19%

17%14%

20%

6%4% 4%

Who is held accountable for em-ployee engagement and retention?

ExecutivesSenior LeadersMid-Level LeadersFront-line LeadersHuman ResourcesTraining De-partment Recruiting Department No one is accountable

© TalentKeepers

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Factors Contributing to Employee Engagement and Retention

© TalentKeepers

Job Factors

Leadership Factors

Co-Worker Factors

Organization Factors

13%

11%

5%

8%

43%

34%

32%

24%

39%

44%

48%

50%

5%

11%

15%

18%

How effective is your organization at leveraging the following Employee

Engagement Factors?

Not at all Effective Slightly Effective Moderately Effective

© TalentKeepers

2012

2013

11%

13%

36%

43%

38%

39%

15%

5%

Job/Career Factors are the #1 Reason Employees Leave, yet Organizations are Least Effective at Leveraging and

Getting Worse

Not at all Effective Slightly Effective Moderately Effective

© TalentKeepers

BEST IN CLASS

Career Pathing

52%

Training & De-velop-ment 28%

Sched-ule Flex-ibility 10%

Succession Planning 3%

Other 6%

If Improved, What Can Organizations Do to Positively Impact Job and Career Is-

sues in 2013?

2012

2013

11%

11%

37%

34%

40%

44%

11%

11%

Organizations are Slightly Improving Their Ability to Leverage Leadership

Factors to Drive Engagement and Retention

Not at all Effective Slightly Effective Moderately Effective

© TalentKeepers

Leadership Strategies

Job/Career Strategies

Co-Worker Strategies

Organization Strategies

44%

38%

5%

13%

If improved, Leadership Strategies Would Have the Greatest Impact on Employee

Engagement

Strongly Disagree

Disagree Slightly Disagree

Slightly Agree

Agree Strongly Agree

2%

11% 11%

25%

39%

12%

Are Your Leaders Challenged When it Comes to Leading

Employees of Different Generations?

28%

72%

But, Few Leaders Are Being Trained to

Manage Generation Y Employees

YesNo

© TalentKeepers

Extras / Unedited

Com-munica-

tion 31%

Train-ing & Devel-opment

24%

Organi-zational Align-ment 18%

Relationship Building

13%

Coach-ing & Feed-back 10%

Other 4%

What Should Leaders Do to Have the Greatest Impact on Engagement and

Retention?

What people are saying about “communication”…

“We ask our employees what’s important to them, and then LISTEN.”“Cascade communication, share the goals and information with employees…”“Communicate well, develop managers to use employee feedback to improve the workgroup.”“Communicate, engage, give middle managers more exposure and say in how to manage their staff.”

© TalentKeepers

New for 2013: “Best in Class” Organizations

“Best in Class” are the Top 10% of all organizations that:

1. Prioritize engagement and retention as a key strategy2. Commit budget and resources to drive engagement and

retention3. Drive high engagement and retention of top performing

employees at all levels4. Link engagement and retention measures to business

metrics5. Regularly survey employees to gather data to guide

planning6. Require planned meetings between leaders and

employees to discuss engagement, fulfillment and more © TalentKeepers

Yes No

100%

35%

65%

Employee Engagement Surveys are Administered at Least Once a Year

Best in Class

All Organi-zations 

58%

42%

15%12%

24%

9%

17%

23%

Excluding Performance Reviews, How Often do Planned Meetings to Discuss

Engagement Occur

Best in ClassOthers

Strategies & Tactics to become “Best in Class”

in 2013

© TalentKeepers

Engagement & Retention Challenges for 2013

47

• Growing stability in the economy is raising expectations among key employee groups

• Organizations slow to respond risk being left short of talent in business-critical positions

• Emergence of Gen Y will further shape definitions of organization culture and workplace dynamics

• Leaders at all levels, always important to success, will be faced with greater responsibility for energizing and keeping talent and promoting a stable work environment

7 Strategies and Tactics for 2013

© TalentKeepers

1. “Size the Problem” - Calculate the cost of disengagement and attrition to build the business case for action.

2. Actively engage senior executives to drive accountability for engagement and retention in all levels of leadership.

3. Link engagement and retention metrics to business results to build sustainability and to negotiate for resources.

7 Strategies and Tactics for 2013

© TalentKeepers

4. Educate leaders on the value of engagement, their influence on their teams, and develop their engagement skills.

5. Establish Engagement Metrics. What gets measured, gets done! Hold stakeholders accountable for improving key engagement metrics just as you do sales, service and productivity metrics.

6. Target your best performers. Motivating and keeping your most productive talent strengthens your cultures, fuels team performance and ensures results.

7. Focus on High-Impact Areas. On-Boarding, Job/Career Discussions, Leadership Engagement Skills.

• TAKE: 9th Annual Talent Engagement and Retention Trends Survey• www.TalentKeepers.com-> Research tab->2013 Research Survey• BENEFIT: Benchmark your data compared to “Best in Class,”

total results, or by industry

• REQUEST: Our research report by giving us your business card so we can send a copy once it is released.

• TRIAL: One of the top programs being used in 2013• Onboarding tools, career development, succession planning, and

engagement surveys• BENEFIT: Start performing like a “Best in Class” organization

Our Gift To You

Thank You!

Questions?