Building the Business Case: Calculating ROI of Employee Engagement Initiatives

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

2. Below the waterline – what I am NOT • A slow talker • Humorous • From training/HR • A lecturer

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

4. What We Will NOT Cover This Afternoon

5. Live Meeting Poll 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 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.

6. Making The Business Case WIFM

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?

8. Live Meeting Poll 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 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.

9. The Costs of Losing a Teller • Time to replace = 30 days • Replacement’s salary = $25,000

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

11. The Costs of Losing a Teller 1.Costs due to person leaving

12. The Costs of Losing a Teller 2. Costs to recruit replacement

13. The Costs of Losing a Teller 3. Cost to orient/train replacement

14. The Costs of Losing a Teller 4. Costs of lost productivity

15. The Costs of Losing a Teller 5.Costs of lost sales = ??????

16. To Summarize: The Costs of Losing a Teller

17. The Cost of Losing a Teller in Terms of Salary • Total Cost of Loss = $18,200 + ???? • As % of salary = 73% + ????

18. The Costs of Losing ‘Em  Resource: Corporate Leadership Council

19. Questions?

20. We have a problem… • It cost BIG $$$ to lose talent What can be done to reduce “the cost of loss?”

21. What Keeps Talent Engaged and Onboard? • What keeps YOU onboard?

22. Live Meeting Poll 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 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.

23. What Keeps Talent Engaged and Onboard? • The money? • The boss? • The team? • The work? • The learning?

24. Top 5 Stay Factors for 17,000 people Supportive management/great boss Exciting work & challenge 25% 48% Fair pay 32% 42% Career growth, learning & development 42% Working with great people & relationships  Resource: CSI Retention Driver Study

25. So….What Can a Manager Do? It Comes Down to… “ONLY” 26 STRATEGIES

26. Management Basics: A-Z

27. If You Have Time for Only ONE Strategy: ASK!

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?

29. The ROI from “Just Do It” ROI = Cost saved by reducing turnover + Value of improved productivity from increasing engagement ÷ Investment in doing something

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

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

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

33. Resources “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.” • Scary Stats (www.LoveItDontLeaveIt.com) • Retention Convention White Paper • Retention Driver’s Study • Turnover ROI Calculator • The “Jerk” Survey (www.keepem.com) (Towers Perrin Talent Study, April, 2003) *Unless indicated by a web-address, upon request

34. On Bosses “…some cause happiness wherever they go; others, whenever they go” Oscar Wilde

35. Thank You!!!