Secrets of Staff Retention

ollow the journey of an agency reducing turnover from 33% to 18%. Along this journey we will explore the turnover costs, the workforce itself, how well you really Fknow your staff, the needs of different generations of workers, and the reasons employees really leave. Regardless of agency size or budget, you will leave this workshop with practical ideas, tools and resources aimed to reduce turnover, improve employee engagement and increase employee satisfaction.

Table of Contents WORKSHOP SLIDES...... 3 GENERATIONAL DYNAMICS...... 8 57 PITFALLS YOU CAN AVOID...... 13 THE ADVISOR: COST OF EMPLOYEE TURNOVER...... 16 RESOURCES...... 20

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Workshop Slides ______Reducing Turnover

Mary A. Flores ______Vice President of Human Resources BBBS of North Texas ______

Changing How Our Children Grow Up in America. ______

______What is Turnover? ______TURNOVER CALCULATION: ______Total number of terms in 12 months/ Average Number of Employees in same 12 ______month period ______Changing How Our Children Grow Up in America. ______

______Cost of Turnover ______Estimated Cost is 1 x annual salary (some estimates as high as 1.5 x annual salary) ______• Costs due to a person leaving • Recruitment Costs ______• Training Costs • Lost Productivity Costs ______• New Hire Costs ______Changing How Our Children Grow Up in America. ______

______Is there “good” turnover? • Employees with performance issues ______• Employees that can’t grow any further • Employees that are “burned out” ______When can turnover be anticipated? ______• Merger/Acquisition • Relocation • Restructure/Reorganization ______Changing How Our Children Grow Up in America. ______

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______Getting a Grip on TURNOVER ______Where to Start? ______Changing How Our Children Grow Up in America. ______

______1. KNOW YOUR TURNOVER ______• Calculate the turnover rate ______• Add the cost of turnover ______• Evaluate your turnover (length of employment, average age, race, degree level, gender, # of years of prior exp.) ______Changing How Our Children Grow Up in America. ______

______2. KNOW YOUR WORKFORCE ______• Examine the same data points

• Harder look at dob of current workforce ______• Four generations working together: ______Matures or Civics ≤ 1946 62+ yrs. Baby Boomers 1946 – 1964 44-61 yrs. Gen X ers 1965-1980 28-43 yrs. ______Millennials or Gen Y 1981 - ≤ 27 yrs. ______Changing How Our Children Grow Up in America. ______

______Generational Imperatives 1. Identify the generational mix in your ______workplace 2. Empower employees with knowledge about different generations ______3. Encourage managers to develop strategies based on generational ______differences 4. Recruit and retain talent based on generational strengths ______Changing How Our Children Grow Up in America. ______

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3. KNOW WHY EMPLOYEES ______REALLY LEAVE ______Changing How Our Children Grow Up in America. ______

7 Hidden Reasons Employees ______Leave ______1. Job expectations must be accurately communicated 2. Mismatch between job and person ______3. Too little coaching and feedback 4. Too few growth and advancement opportunities ______5. Feeling devalued and unrecognized 6. Stress from overwork and work-life imbalance ______7. Loss of trust and confidence in Sr. Leaders ______Changing How Our Children Grow Up in America. ______

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AN AGENCIES JOURNEY TO ______REDUCING TURNOVER ______Changing How Our Children Grow Up in America. ______

______Recruiting • Ad content should reflect key factors while ______be compelling and different • Create a hiring practice • Pre-determined questions asked of ______EVERY candidate • Behavior-based interviewing ______• Role plays • Internal job posting ______Changing How Our Children Grow Up in America. ______

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______Relationships • Event attendance • Quarterly awards ______• Life Milestones (birthdays, anniversaries, baby births…) • Individualized Goal Setting • 1:1 Meetings (monthly) ______• Agency Newsletter • Large group meetings • Fun events ______• Retreats • Department meetings (with games) • Lunch with the Leadership Team • Friendships at Work ______Changing How Our Children Grow Up in America. ______

______Infrastructure • Hiring ______• Training • Marketing/Communications ______• Coaching and Mentoring • Finance/Accounting ______• Human Resources • Legal Support • Functional Work Space ______Changing How Our Children Grow Up in America. ______

______Compensation • Competitive Pay ______• Incentive Plan • Wellness Program • Full Benefits: Medical, Dental, Vision, Life, Std, ______Ltd, 403(b), “opt out” options • Flexible Schedules ______• Paid Memberships • Total Compensation Statements • Agency “junk” ______Changing How Our Children Grow Up in America. ______

______Leadership • Management Mess-Ups 57 Pitfalls You Can Avoid ______1. Leadership 2. Communication 3. Motivation 4. Managing Change ______5. Personal Development 6. Problem Solving 7. Customer Service 8. Getting Results ______9. General Management 10. Planning 11. Company Culture 12. The Basics 13. The Big One ______Changing How Our Children Grow Up in America. ______

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______Retention Best Practices • 360 degree feedback sessions ______• Retreats, team building programs • Retention interview • Start off right – employees first day, performance ______plan • Fair annual performance reviews • Frequent recognition ______• Buddy Program • Exit interviews ______Changing How Our Children Grow Up in America. ______

______Thank you! ______• Concluding thoughts ______Changing How Our Children Grow Up in America. ______

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Generational Dynamics

Identifying the Generations

Generations Age Date of Birth Population

Civics 62 and over Before 1946 59 million

Baby Boomers 44 – 61 1946 – 1964 78 million

* Tweener – the generation between the Boomers and the X’ers

Gen X’ers 28 – 43 1965 – 1980 48 million

* XY Cusp (aka MTV Generation, Boomerang Generation)

Millennials 7 – 27 1981 – 2001 73 million (aka Eho Boomers, Gen Y’ers)

Generation Z ≤ 6 2002 - tbd * There is a 4 year differential based on the researcher.

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Civics

Seminal Events Heroes Core Values  Stock Market Crash  Superman  Dedication and sacrifice  Depression/Bread lines  FD Roosevelt  Hard work  Atomic Bomb  Babe Ruth  Conformity  Pearl Harbor  Respect for authority  Lindbergh Transatlantic Flight  Delayed gratification  Hindenburg Disaster

What They Value in the Workplace Company stability Large scale efforts Strong reputation Ability to contribute flexibly Being stable and secure Recruiting and Retaining  Be open to flexible working arrangements  Speak of family, home, traditional values and patriotism  Tell them they are wanted for their age and experience  Be open to traditional communications Orientation  Take your time  Consider they are less comfortable than younger generations about “just jumping in” and “learning on the fly”  They prefer to know what to expect, what your policies are, and “who’s who”  Tell them about your company and it’s history  Emphasize long term department and organizational goals Training  Some may have a difficult time accepting coaching from younger colleagues  Willing to learn new skills when they understand it will help the organization  Will respond to respected leaders, “coaches”  Establish rapport by acknowledging their background and experience Motivating  Use a personal touch, e.g. hand written note v. an email praise  Consider visual symbols of status – up front parking spaces, plus real benefits  Repeat “It’s valuable to the rest of us to hear what has and hasn’t worked in the past.”

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Baby Boomers

Seminal Events Heroes Core Values  Birth control pill  Kennedy  Work  Cuban Missile Crisis  Martin Luther King, Jr.  Self  Vietnam War  John Glenn  Involvement  Lunar Landing  Personal Gratification  Kennedy Slain  Community  Television  Russians put Sputnik in Space  John Glenn First American to Circle the Earth  MLK March on Washington

What They Value in the Workplace Performance opportunities Education and learning Opportunities to become a better person Getting ahead and a more balanced life They live to work (v. work to live) Recruiting and Retaining  Show them how they can be a star: “You can make a difference here, if you work at it”  They leave because of burnout, a feeling of not being able to make a difference  They stay if you show then where and how they can make a difference  Solicit their power to “help change the world”  Community - 6 in 10 boomers are especially interested in a job that improves the quality of the communities. 70% of women boomers say it is very important that a job give them a sense of purpose Orientation  Discuss the future: boomers are future oriented  Focus on challenges; show them problems they can solve Training  Don’t blame – they will tune out  Teach with equality  Remember this is the original coddled generation, the “Me” Generation Motivating  Public recognition is important  Perks are valuable  Reward their ethic and long hours  Repeat: “You are important to our success”  Remember, they live to work

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Generation X

Seminal Events Heroes Core Values  Computers  None  Fierce independence  Exxon Valdez  Change  Reagan Attempted Assassination  Technoliteracy  Tylenol tampering  Skepticism  Challenger Disaster  Iran Hostage Crisis  Berlin Wall Comes Down  Three Mile Island “near meltdown”  Pan Am Flight 103 (terrorism)  Divorce rate went from 2.5% to 5.0%

What They Value in the Workplace To improve themselves (in case of disaster) To make something of themselves To realistically make a difference To experience the cutting edge, including technology Recruiting and Retaining  Repeat “We want you to have a life”  Repeat “hands off”  They come and stay for fun  Communicate electronically  This is “a place to learn”/training is key Orientation  X’ers loathe corporate politics – let them know that they will not need to “take point” in organizational maneuvering  Show them to your organization’s intranet and website Training  Training is really valuable to x’ers  Attentive training is annoying (online is best)  Are virtually self-developing; they learn quickly and develop skills on their own  Desire lots of resources (preferably multi-media) so they can learn how to do their job Motivation  Feedback is more imp. than other generations (x’er yearning for parent attention)  Empower them to work offsite  Give them leading edge technology to work with  Don’t exclude them from perks; they don’t desire them, but will resent you for playing politics if you exclude them  Repeat “do it your way”

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Millennials aka Echo Boomers, Gen Y’ers

Seminal Events Heroes Core Values  Waco Standoff  Michael Jordan  Confident  Oklahoma Bombing  Tiger Woods  Optimistic  OJ Simpson Trial  Bill Gates  Technoliterate  Princess Diana‘s Death  Moral  Clinton-Lewinsky Scandal  Civic minded  Gulf War  Columbine School Shooting

What They Value in the Workplace The opportunity to be part of something meaningful The opportunity to make a difference The opportunity to work with energized teams of creative people The opportunity to be rewarded Recruiting and Retaining  Offer and deliver the opportunity to be a part of something meaningful  Repeat “We care about your goals and achievements”  Technology is king  Millenials leave because their job is repetitive/boring  Remember, this is the awards generation Orientation  Prepare for and accept their confidence  Offer techno-orienting  Get them to your website  Embrace and nurture their optimism Training  Millenials enjoy training that incorporates interaction with their colleagues (unlike X’ers)  Be sensitive to conflict when Xers and Millenials work side-by-side  Establish mentor programs Motivating  Repeat “You and your coworkers can help drive this company into the future”  Develop, foster and promote an environment where everyone is important  Match them into creative energized teams  Repeat “You are special”

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57 Pitfalls You Can Avoid Taken from: Management Mess-Ups

Leadership # 1 Failure to understand that the true objective of a manager is to create stars not is one. # 2 Failure to “keep the flame” by championing the company’s beliefs and values. # 3 Failure to understand that the key ingredient in leadership is not power, but influence. # 4 Failure to occupy that land with character.

Communication # 5 Failure to understand that the most powerful and persuasive thing a manager can do is listen. # 6 Failure to recognize the silent communication of management. # 7 Failure to bridge the “great divide”. # 8 Failure to understand that the “GrapeNet” is still the most powerful means of communication in business.

Motivation # 9 Failure to understand that employment is a marketing transaction monitored daily. # 10 Failure to make the people that we deal with (customers and employees) feel important. # 11 Failure to recognize there is not such thing as “stretch socks” management. # 12 Failure to understand the power of genuine praise and encouragement. # 13 Failure to understand that motivation is an inner drive, not something we can do to one another.

Managing Change # 14 Failure to solicit input from employees before making changes that affect their responsibilities. # 15 Failure to understand why people resist change. # 16 Failure to understand and manage the mechanics of change. # 17 Failure to anticipate change.

Personal Development # 18 Failure to incorporate yourself. # 19 Failure to “scrape the barnacles” by conducting frequent self- appraisals and making the needed adjustments. # 20 Failure to establish a viable business and personal network. # 21 Failure to understand the impact of your personal style as a manager. # 22 Failure to take care of yourself. # 23 Failure to relentlessly prepare for the future.

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Problem Solving # 24 Failure to make innovation a deliverable. # 25 Failure to exhibit the “Wright Stuff” when it comes to problem solving. # 26 Failure to teach employees to contend for their ideas. # 27 Failure to have a professional problem solving strategy. # 28 Failure to take reasoned risks when needed.

Customer Service # 29 Failure to understand that exemplary customer service is no longer an option. # 30 Failure to teach employees that policies are general guides – not dictates to behavior. # 31 Failure to meet routinely with customers – internal and external – to discover what they really want. # 32 Failure to understand that “hustle” is a viable strategy.

Getting Results # 33 Failure to understand that placing blame is unproductive. # 34 Failure to understand the relationship between control, self-esteem, and productivity. # 35 Failure to understand that the ultimate factor in success is not talent or method, but desire and effort. # 36 Failure to celebrate your victories. # 37 Failure to understand that all organizations are political. # 38 Failure to hold the mediocre performer accountable.

General Management # 39 Failure to understand that all managers are growth leaders. # 40 Failure to understand the importance of a performance appraisal. # 41 Failure to recognize the penny-wise-and-pound-foolish nature of micromanagement. # 42 Failure to understand that part of a manager’s responsibility is to make the job fun. # 43 Failure to “prime the pump” (train employees).

Planning # 44 Failure to set challenging and meaningful goals. # 45 Failure to understand the emotions of delegation. # 46 Failure to ask the question, “Is this the best use of my time right now?” # 47 Failure to anticipate the future (plan ahead).

Company Culture # 48 Failure to use symbols of your company’s culture. # 49 Failure to recognize the dangers of cynicism. # 50 Failure to tidy up the physical environment. # 51 Failure to cultivate pride of workmanship. # 52 Failure to understand that when graciousness declines, the end is near.

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The Basics # 53 Failure to understand that the real winning edge comes from creating value, not products. # 54 Failure to understand that nothing happens until everybody sells something. # 55 Failure to grow the business. # 56 Failure to rise to the occasion.

The Big One # 57 Failure to practice in reality what you learn in theory.

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The Advisor: Cost of Employee Turnover By: William G. Bliss

The following is a comprehensive checklist of items to include when calculating the cost of turnover in any organization. To determine the costs, have the hourly and weekly cost fully loaded payroll costs (i.e. salary plus benefits) of the vacant position, the management staff; the recruitment staff and others as outlined below. It should be noted that the costs of time and, lost productivity are no less important or real than the costs associated with paying cash to vendors for services such as advertising or temporary staff. These are all very real costs to the employer. These calculations will easily reach 150% of the employees’ annual compensation figure. The cost will be significantly higher (200% to 250% of annual compensation) for managerial and sales positions. To put this into perspective, let's assume the average salary of employees in a given company is $50,000 per year. Taking the cost of turnover at 150% of salary, the cost of turnover is then $75,000 per employee who leaves the company. For the mid-sized company of 1,000 employees who has a 10% annual rate of turnover, the annual Cost of turn over is $7.5 million! Do you know any CEO who would not want to add $7.5 million to their revenue? And, by the way, most of that figure would be carried over to the profit line as well. What about the company with 10,000 employees? The cost of turnover equals $75 million. Here is the list: Costs Due to a Person Leaving 1. Calculate the cost of the person(s) who fills in while the position is vacant. This can be either the cost of a temporary or the cost of existing employees performing the vacant job as well as their own. Include the cast at overtime rates. 2. Calculate the cost of lost productivity at a minimum of 50% of the person's compensation and benefits cost for each week the position is vacant, even if there are people performing the work. Calculate the lost productivity at 100% if the position is completely vacant for any period of time. 3. Calculate the cost of conducting an exit interview to include the time of the person conducting the interview, the time of the person leaving, the administrative costs of stopping payroll, benefit deductions, benefit enrollments, COBRA notification and administration, and the cost of the various forms needed to process a resigning employee. 4. Calculate the cost of the manager who has to understand what work remains, and how to cover that work until a replacement is found. Calculate the cost of the manager who conducts their own version of the employee exit interview. 5. Calculate the cost of training your company has invested in this employee who is leaving. Include internal training, external programs and external academic education. Include licenses or certifications the company has helped the employee obtain to do their job effectively.

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6. Calculate the impact on departmental productivity because the person is leaving. Who will pick up the work, whose work will suffer, what departmental deadlines will not be met or delivered late. Calculate the cost of department staff discussing their reactions to the vacancy. 7. Calculate the cost of severance and benefits continuation provided to employees who are leaving that are eligible for' coverage under these programs. 8. Calculate the cost of lost knowledge, skills and contacts that the person who is leaving is taking with them out of your door. Use a formula of 50% of the person's annual salary for one year of service, increasing each year of service by 10%. 9. Calculate the cost impact of unemployment insurance premiums as well as the time spent to prepare for an unemployment hearing, or the cost paid to a third party to handle the unemployment claim process on your behalf. 10. Calculate the cost of loosing customers that the employee is going to take with them, or the amount it will cost you to retain the customers of the sales person, or customer service representatives who leaves. 11. Subtract the cost of the person who is leaving for the amount of time the position is vacant. Recruitment Costs 1. The cost of advertisements (from a $200.00classified to a $5,000.00 or more display advertisement); agency costs at 20 -30% of annual compensation; employee referral costs of $500.00 -$2,000.00 or more; internet posting costs of $300.00 - $500.00 per listing. 2. The cost of the internal recruiter’s time to understand the position requirements, development and implement a sourcing strategy, review candidates backgrounds, prepare for interviews, conduct interviews, prepare candidate assessments, conduct reference checks, make the employment offer and notify unsuccessful candidates. This can range from a minimum of 30 hours to over 100 hours per position. 3. Calculate the cost of a recruiter's assistant who will spend 20 or more hours in basic level review of resumes, developing candidate interview schedules and making any travel arrangements for out town candidates. 4. The cost of the hiring department (immediate supervisor, next level manager, peers and other people on the selection list) time to review and explain position requirements, review candidates background, conduct interviews, discuss their assessments and select a finalist. Also include their time to do their own sourcing of candidates from networks, contacts and other referrals. This can take upwards of 100 hours of total time. 5. Calculate the administrative cost of handling, processing and responding to the average number of resumes considered for each opening at $1.50 per resume. 6. Calculate the number of hours spend by the internal recruiter interviewing internal candidates along with the cost of those internal candidates to be away from their jobs while interviewing. 7. Calculate the cost of drug screens, educational and .criminal background checks and other reference checks, especially if these tasks are outsourced. Don't forget to calculate the

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number of times these are done per open position as some companies conduct this process for the final 2 or 3 candidates. 8. Calculate the cost of the various candidate pre-employment tests to help assess a candidates’’ skills, abilities, aptitude, attitude, values, and behaviors. Training Costs 1. Calculate the cost of orientation in terms of the new person's salary and the cost of the person who conducts the orientation. Also include the cost of-orientation materials. 2. Calculate the cost of departmental training as the actual development and delivery cost plus the cost of the salary of the new employee. Note that the cost will be significantly higher for some positions such as sales representatives and call center agents who require 4 -6 weeks or more of classroom training. 3. Calculate the cost of the person(s) who conduct the training. 4. Calculate the cost of various training materials needed including company or product manuals; computer or other technology equipment used in the delivery of training. 5. Calculate the cost of supervisory time spent in assigning, explaining, and reviewing work assignments and output. This represents lost productivity of the supervisor. Consider the amount of time spent at 7 hours per week for at least 8 weeks. Lost Productivity Costs As the new employee is learning the new job, the company polices and practices, etc. they are not fully productive. Use the following guidelines to calculate the cost of this lost productivity: 1. Upon completion of whatever training is provided, the employee is contributing at a 25% productivity level for the first 2 - 4 weeks. The cost therefore is 75% of the new employee’s full salary during that time period. 2. During weeks 5 -12, the employee is contributing at a 50% productivity level. The cost is therefore 50% of full salary during that time period. 3. During weeks 13 -20, the employee is contributing at a 75% productivity level. The cost is therefore 25% of full salary during that time period. 4. Calculate the cost of coworkers and supervisory lost productivity due to their time spent on bringing the new employee "up to speed." 5. Calculate the cost of mistakes the new employee makes during this elongated indoctrination period. 6. Calculate the cost of lost department productivity caused by a departing member of management who is no longer available to guide and direct the remaining staff. 7. Calculate the impact cost on the completion or delivery of a critical project where the departing employee .is a key participant.

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8. Calculate the cost of reduced productivity of a manager or director who looses a key staff member, such as an assistant, who handled a great deal of routine administrative tasks that the manager will now have to handle. New Hire Costs 1. Calculate the cost of bring the new person on board including the cost to put the person on the payroll, establish computer and security passwords and identification cards, business cards, internal and external publicity announcements, telephone hookups, cost of establishing email accounts, costs of establishing credit card accounts, or leasing other equipment such as cell phones, automobiles, pagers. 2. Calculate the cost of a manager's time spent developing trust and bUilding confidence in the new employee's work. Lost Sales Costs 1. For sales staff, divide the budgeted revenue per sales territory into weekly amounts and multiply that amount for each week the territory is vacant, including training time. Also use the lost productivity calculations above to calculate the lost sales until the sales representative is fully productive. Can also be used for telemarketing and inside sales representatives. 2. For non-sales staff, calculate the revenue per employee by dividing total company revenue by the average number of employees in a given year. Whether an employee contributes directly or indirectly to the generation of revenue, their purpose is to provide some defined set of responsibilities that are necessary to the generation of revenue. Calculate the lost revenue by multiplying the number of weeks the position is vacant by the average weekly revenue per employee. Calculating and adding all these costs, given our original example of the $50,000 person can easily reach $75,000 to replace them. As you can see, the costs and impact associated with an employee who leaves the company can be quite significant. This is not to say that all turnover should be eliminated. However, given the high cost and impact on running a business, a well thought-out program designed to retain employees may easily pay for itself in a very short period of time. This article was prepared by William G. Bliss, President of Bliss & Associates Inc., a Wayne, NJ consulting firm providing advisory services to entrepreneurial companies. You can reach him at [email protected] or by calling 973-616-8600.

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Resources 3. Management Mess-Ups Mark Eppler 4. The 7 Hidden Reasons Employees Leave Leigh Branham 5. Vital Friends Tom Rath 6. The Speed of Trust Stephen Covey, Jr. 7. The Carrot Principle and The 24-Carrot Manager Adrian Gostick and Chester Elton 8. Motivating the “What’s in it for Me?” Workforce Cam Marston

Mary A. Flores, SPHR Vice President of Human Resources Big Brothers Big Sisters of North Texas [email protected]

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