Workplace America:

Employee Engagement and Retention Trends

2014

Commit. Engage. Excel.

• We are a leader in:

- Award-winning and certified engagement and retention solutions

- Proven results in boosting performance, retention, customer service

• We help our clients :

- Employee Engagement - Employee Retention

- Standard & Customized Surveys - Employee On-boarding

- Leadership Development - Co-worker Collaboration Benchmarking

About TalentKeepers

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- Trust Builder - Climate Builder

- Talent Developer and Coach - Engaging and Retaining Gen Y

- Communicator - High Performance Builder

- Retention Expert - Retention Monitor

- Talent Finder - Flexibility Expert

- Esteem Builder - Numerous Webinars

HRCI Certified Programs by TalentKeepers

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The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program. It means that this program has met the HR Certification Institute's criteria to be pre-approved for recertification credit.

Blended Learning Programs

Representative Organizations We Helped Engage and Retain Valued Talent

What We Will Cover

What’s Changed in 10 Years

Why job and career issues are critical

Leveraging the potential of leaders

Gen Y as a catalyst for workplace evolution

What key initiatives top the list for 2014

Big ideas for the future of engagement

Recommendations

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A Retrospective – 10 Years It is now a given that engagement drives

performance

Senior leaders are now accountable for and directly involved in employee engagement

Operations is much more directly active in engagement and retention

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A Retrospective – continued Gen Y / Millennials are fully expecting to be

engaged

Increased competition demands more engaged employees to improve the customer experience

All of these are reflected in the emergence of willingness to recommend measures; ENPS for example

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Given all of That, Gaps Remain Most organizations do not calculate the cost

of turnover and disengaged employees

Leader development is still lagging behind the demand for engagement leadership

Too few systematic methods are in place to manage engagement and retention strategies, gather relevant metrics and determine ROI

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Macro Snapshots

Forecasted Job Growth in 2014: Increase: 51% No Change: 29% Decrease: 20%

83% Make Employee

Engagement

is a

Strategic

Priority

100% Best-in-Class

Agree

29%

32%

40%

40%

43%

50%

57%

Recruiting costs

Stress

Lost organizational knowledge

Service quality

Team performance

Morale and culture

Productivity

Top 7 Areas Impacted by Employee Turnover and Low Engagement

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Does Employee Engagement Matter?

86% higher customer approval and service quality

68% of their employees recommending their company as a good place to work

Companies with highly engaged employees have:

25% lower turnover

Stronger brands and excellent reputations

44% higher profitability

Source: CLC Survey of 59 Organizations, 50,000 Employees Worldwide Gallup 2012 State of the American Workplace

77% greater impact on customer satisfaction

147% higher earnings per share compared with their competition

2.5 times the revenue growth than companies in the bottom quartile of engagement

Engaged employees that are 87% less likely to voluntarily leave the organization

Sources: Harvard Business Review Report of 550 Executives, 2013 Gartner research 2012 TalentKeepers/AT&T I&E Survey 2014 HayGroup 2012

More Evidence… Companies with highly engaged employees have:

64%

36%

Yes

No

A Majority of Organizations Now Budget Funds and Resources for Engagement Strategies for 2014

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Job and Career Trends

11%

10%

8%

8%

42%

37%

33%

29%

41%

42%

46%

43%

6%

11%

13%

19%

Job/Career

Leadership

Co-Worker

Organization

How effective is your organization at leveraging the following Employee Engagement Factors?

Not at all Effective Slightly Effective Moderately Effective Very Effective

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26% 25%

35%

41%

58% 59%

48%

37%

11% 10% 12%

15%

5% 6% 5% 7%

2014201320122011

Excluding pay, what factors are driving unwanted turnover? Leadership Factors

Job/Career Factors

Organizational Factors

Co-Worker Factors

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2%

13% 11%

26%

40%

8%

During initialtraining

Within first 90days

Around 6months

Around 1 year Around 3years

More than 5years

When does the highest turnover occur?

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52% occurs in first 12 months!

32%

35%

13%

18%

2%

30%

37%

12%

17%

4%

34%

33%

15%

13%

6%

Missed expectations on jobduties and/or work schedule

Poor fit based on the skillsrequired

Lack of advancementopportunities

Inadequate assimilation andcoaching

Inadequate training

The Biggest Reason Employees Leave Organizations within the First 12 Months

2012

2013

2014

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43%

23%

16%

10%

3%

4%

1%

50%

21%

11%

10%

3%

3%

2%

44%

22%

16%

10%

4%

2%

2%

Lack of upward careeradvancement opportunities

Lack of career growth experiences

Leadership

Job burnout

Lack of skills development

Retirement

Co-worker conflict

The Biggest Reason Employees Leave with More Than One Year Tenure

2012

2013

2014

©TalentKeepers

10%

90%

Indirect Cost

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

23%

77%

Direct Cost

Yes

No

Cost of Losing a Valued Contributor?

In 2014:

Average DIRECT Cost: $16,908

Average INDIRECT Cost: $26,558

TalentKeepers Turnover Cost Calculator

• http://www.talentkeepers.com/turnover.jsp

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11%

33%

44%

11%

3%

20%

55%

21%

Not at all effective Slightly effective Moderately effective Very effective

Budget Matters? Effectiveness at Retaining High Performing Employees

No Budget Budget

Leaders Remain the Greatest Under Leveraged Resource

19%

19%

17%

16%

14%

6% 4% 4%

Who is held accountable for employee engagement and retention?

Human Resources

Senior Leaders

Executives

Mid-Level Leaders

Front-line Leaders

Training Department

Recruiting Department

No one is accountable

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43%

36%

7%

14%

LeadershipStrategies

Job/CareerStrategies

Co-WorkerStrategies

OrganizationStrategies

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

Communication 38%

Training and Development

25%

Relationship and Team Building

18%

Coaching and Feedback

10%

Organizational Alignment

9%

What Should Leaders Do to have the Greatest Impact on Engagement and Retention?

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0% 0% 0%

37%

28%

35%

19%

9%

27%

14% 14%

17%

Never Once, usuallyduring

onboarding

Once a year orlonger

Twice a year Quarterly Weekly orMonthly

Excluding Performance Reviews, How Often do Planned Meetings to Discuss Engagement Occur

Best in class

Other

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0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%December 2013

Benchmark: 85%

Case Study: Fortune 50 National Retail Organization Leader Engagement Index Variation

LEI is the degree to which a group of employees is actively engaged by their leader

n= 1,427, Leaders

Gen Y

Millennials Keep Coming

Gen Y, the “Millennials”

© TalentKeepers

Born between about 1981 and 2000, represent the largest generation in US history

About 95 Million strong, nearly 30% of the US population

Raised with technology

(the Internet turned 25

this year)

Impacting the workplace in myriad ways

“We don’t turn off.”

“Social networks aren’t just social. We are ‘socializing’ with the media.”

2%

11% 11%

25%

39%

12%

3%

10% 11%

28%

35%

14%

StronglyDisagree

Disagree SlightlyDisagree

SlightlyAgree

Agree StronglyAgree

Are Your Leaders Challenged When it Comes to Leading

Employees of Different Generations?

2013 2014

28%

72%

25%

75%

Yes No

Are Leaders Receiving training to Manage Gen Y Employees?

2013 2014

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38 © TalentKeepers

Just another day at the office?

What role does technology play in engaging and retaining Millennials?

83%

83%

80%

53%

58%

53%

53%

48%

47%

32%

48%

47%

40%

34%

20%

20%

15%

14%

13%

8%

Online surveys

Performancemanagement platforms

eLearning

Automated screeningand recruiting systems

Online or virtualmeeting tools

Social networks

Online metricsdashboard

Online action planning

Collaboration platforms

Mobile optimizedsurveys or platforms

Putting Technology to Work

Best in Class

Other

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Data Powers Action

42%

34%

33%

33%

31%

30%

30%

Employee surveys

Job specific training

On-boarding tools

Paid vacation & holiday plan

Succession planning

Competitive benefits

Leader training for engagementand retention

Strategies being used in 2014 to engage and retain talent

©TalentKeepers

100%

0%

39%

61%

Yes No

How Often Does Your Organization Administer an Engagement Survey?

Best in Class Other

©TalentKeepers

22%

43%

35%

7%

27%

67%

Yes, formally Yes, informally No

Do You Link Engagement Metrics to Performance and Profitability?

Budget No Budget

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Organizational Culture

as a Driver of Engagement

INTRO into to Culture Say something about comp and benefits

“Culture eats strategy for breakfast.”

Chat time.

Organizational Culture

21%

Compensation, Benefits,

Recognition 18%

Training and Personal

Development 18% Communication

11%

Flexibility 11%

Surveys 8% Coaching

7%

Onboarding 3%

Relationship Building

3%

The Most Successful Engagement and Retention Tactics All Organizations Use:

©TalentKeepers

Communication 8%

Training and Personal

Development 28%

Organizational Culture

32%

Relationship Building

8%

Surveys 8%

Compensation, Benefits,

Recognition 4%

Flexibility 8%

Onboarding 4%

The Most Successful Engagement and Retention Tactics BIC Organizations Use:

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Synergy Strategy?

Job and Career Growth

Gen Y Aspirations

Social Media

Crowdsourcing Employee

Engagement Tactics

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What’s on the Horizon?

Engagement and retention are business strategies, not just “HR” initiatives

As expectations of work and work-life evolve, engagement is becoming more embedded in organizational culture

Job, career and growth issues are being addressed in meaningful and creative ways to keep valued talent

Work flexibility, in both time and location is expanding

Data sources are growing; how to manage and leverage data will improve

Social media’s integration with work and culture, fueled by a new generation of employees, continues to expand

Compensation and benefits continue to evolve to adapt to changes in the workforce and American culture

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Seven Key Strategies

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1. Leverage Leaders: The greatest asset in creating a culture of engagement is leaders. Leader selection, training, goals, metrics, incentives should all be reviewed through an engagement and retention lenses.

2. Communication: Focus on proactively sharing information, keeping people informed, promote frequent dialog with front line employees, ensure upward feedback channels really work.

Seven Key Strategies

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3. Culture: Understand the core elements and values of your culture and design strategies that can executed, reinforced and sustained, with the goal of engagement being woven into the fabric of your culture and is not simply a series of initiatives.

4. Job and Career: Focus on growth and opportunities to learn new skills, a key to energizing employees. Increase the frequency of leader/employee dialog, ensure transparency in job changes and career moves; and communicate a the view beyond the horizon.

Key Strategies for 2014

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5. Work from Data: Quantify the impact of turnover and low engagement and establish and/or review data-gathering tools and methods such as employee surveys, exit surveys, performance reviews; training participation, etc.

6. Coworkers: Supportive teams connect well beyond a workgroup and create relationships that fuel collaboration; build coworker connections. Crowdsource projects and engagement tactics. Leverage digital tools to create supportive connections.

Key Strategies for 2014

© TalentKeepers

7. Action Planning and Accountability: Establish systematic ways to capture action plans, track and report progress and hold accountable leaders and stakeholders through key performance and operations metrics.

Workplace America:

Employee Engagement and Retention Trends

Thank You

Commit. Engage. Excel.

Rank Strategies to Engage and Retain Employees

1 Employee surveys

2 Job specific training

3 On-boarding tools

4 Paid vacation & holiday plan

5 Succession planning

6 Competitive benefits

7 Leader training for engagement and retention

8 Career planning and development

9 Competitive compensation plans

10 Tuition reimbursement

11 Volunteering and community involvement

12 Non-financial recognition / incentive programs

13 Leader / Employee coaching meetings

14 Flexible work schedules

15 Opportunities for social interaction

16 Multi-rater / 360 surveys

17 Retention or engagement goals for leaders

18 Virtual offices / work from home

19 Social media integration