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MANAGEMENT & LEADERSHIP TRENDS – Second Half of 2009 Eric Swenson BUSINESS FORUMS INTERNATIONAL LAS VEGAS JUNE 19, 2009

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<ul><li>It’s All About People </li></ul><ul><li>Entitlement To Privilege </li></ul><ul><li>Adapting To Change </li></ul><ul><li>Employee Lawsuits Even More Prevalent </li></ul><ul><li>Solutions? </li></ul><ul><ul><li>The Need To Do More With Less </li></ul></ul><ul><ul><li>Communication Is Key </li></ul></ul>Trends for the Second Half of 2009

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IT’S ALL ABOUT PEOPLE IN 2009-10 <ul><li>CAPITAL EVERY BUSINESS HAS: </li></ul><ul><li>Intellectual Capital </li></ul><ul><li>Social Capital </li></ul><ul><li>Financial Capital </li></ul><ul><li>Human Capital </li></ul><ul><li>BUSINESS OWNER SURVEY RESULTS – THE BIGGEST </li></ul><ul><li>CONCERNS FOR 2009: </li></ul><ul><li>1. The economy (81%, the same number reported in Nov. 2008) </li></ul><ul><li>2. Controlling Operating Costs (53%, down from 60%) </li></ul><ul><li>3. Rising health care costs (37%, down from 43%) </li></ul><ul><li>4. Retaining their most valued employees (36%) </li></ul><ul><li>5. Hiring the right people (30%) </li></ul><ul><li>--Administaff Survey of Business Owners, May 2009 </li></ul>

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<ul><li>Large Companies (500+ employees) have lost 11.4% of their workforce </li></ul><ul><li>Medium Companies (50-499 employees) - 9.8% </li></ul><ul><li>Small Companies (under 50 employees) – 4.4% </li></ul><ul><li>--Nevada Department of Employment, Training and Rehabilitation Report, 6/17/2009 </li></ul><ul><li>Why the impact on bigger companies? </li></ul><ul><li>Bottom lines of gaming operators, which tend to be the state's biggest employers; </li></ul><ul><li>Construction has stopped </li></ul><ul><ul><li>Fontainebleau – 3,300 employees </li></ul></ul><ul><ul><li>Cosmopolitan – 350 employees </li></ul></ul><ul><li>Easier to lay off workers at bigger businesses because employees at smaller companies typically perform multiple tasks. </li></ul><ul><li>--LVRJ, 6/18/200 </li></ul><ul><li>--Brian Gordon, Applied Analysis </li></ul><ul><li>--Keith Schwer, Director of the Center </li></ul><ul><li>for Business and Economic Research UNLV </li></ul>NEVADA UNEMPLOYMENT STATISTICS

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EMPLOYEES HAVE TRANSFORMED THEIR MENTALITY <ul><li>It’s Gone From “Entitlement” To “Privilege” </li></ul><ul><li>Entitlement: </li></ul><ul><ul><li>Attitude is when an employee feels they are owed by their employers. </li></ul></ul><ul><ul><li>Employee can pick up and leave for a better opportunity at the first sign of disappointment. </li></ul></ul><ul><ul><li>Attitude is generally not that of a team player – but as an individual who is owed a promotion, salary increases and more attention. </li></ul></ul><ul><li>Privilege: </li></ul><ul><ul><li>Everyone knows that layoffs have been pervasive, and they could be the next to go. </li></ul></ul><ul><ul><li>This will result – if managed properly – in employees who will complain less, work harder, and become more appreciative of the job they have. </li></ul></ul>

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ADAPTING TO CHANGE IS KEY TO SUCCESS <ul><li>Change </li></ul><ul><ul><li>One of the most misunderstood and feared actions in business. </li></ul></ul><ul><ul><li>No one knows how to deal with it well. </li></ul></ul><ul><ul><li>When things go well, you don't need change. </li></ul></ul><ul><ul><li>When things are going badly, change can't happen fast enough. </li></ul></ul><ul><ul><li>Fear relating to change is simply the fear of the unknown. </li></ul></ul><ul><li>Managing Change </li></ul><ul><ul><li>You're a leader. You are on stage. </li></ul></ul><ul><ul><li>You're not allowed to show frustration or weakness. </li></ul></ul><ul><ul><li>Leaders lead - they say &quot;here is the way I believe we need to go,&quot; and then go. </li></ul></ul><ul><ul><li>This is the attitude you must take when managing change. </li></ul></ul><ul><li>Virtually Any Change Breeds Opportunity - The Key Is Finding The Opportunity And Acting On It. </li></ul>

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EMPLOYEE LAWSUITS ARE EVEN MORE PREVALENT <ul><li>EEOC Complaints increased 15.3% in 2008 and will dramatically increase in 2009 </li></ul><ul><li>If you terminate or reduce an employee, they’re going to look for a way to get money – especially in a dismal job marketplace. </li></ul><ul><ul><li>They have more time and more incentive to file. </li></ul></ul><ul><li>Wage & hour lawsuits will become even more prevalent </li></ul><ul><li>Labor lawyers are changing their practices to focus solely on wage and hour lawsuits, which are easy to prove. </li></ul><ul><li>Violations are myriad in businesses throughout the United States. </li></ul><ul><li>Employees Everywhere Are Reading About The Huge Sums Of Money ‘Won’ By Disgruntled Ex-employees Filing Lawsuits Against Their Employers. </li></ul><ul><ul><li>The major focus will be on: </li></ul></ul><ul><ul><ul><li>Exempt or non-exempt status </li></ul></ul></ul><ul><ul><ul><li>Meal and break periods </li></ul></ul></ul><ul><ul><ul><li>‘ Independent contractor’ should properly have been classified as an employee. </li></ul></ul></ul>

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<ul><li>All it takes is one employee to talk to an attorney. </li></ul><ul><ul><li>Ask Wal-Mart, Starbucks, Electronic Arts, and the thousands of small businesses that have paid hundreds of millions of dollars in the past year </li></ul></ul><ul><li>Other Focus Areas in 2009-10 </li></ul><ul><li>Failure to hire </li></ul><ul><li>Screening applicants on arrest and conviction records </li></ul><ul><li>Pay discrimination and the Lilly Ledbetter Fair Pay Act </li></ul><ul><li>ADAAA including </li></ul><ul><ul><li>Issues related to pre-employment testing </li></ul></ul><ul><ul><li>Policies that require employees to be </li></ul></ul><ul><ul><li>&quot;100% cured&quot; to return to work </li></ul></ul><ul><li>Immigration </li></ul><ul><ul><li>--- Peggy Mastroianni, EEOC Associate Legal Counsel, 3/12/2009 </li></ul></ul>Think It Can’t Happen To You? Or Is Your Excuse That You’ve Never Had It Happen To You Before?

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THE OPPORTUNITY IS NOW TO DO MORE WITH LESS <ul><li>Performance Management </li></ul><ul><ul><li>If you're maximizing the people you have, you won't need so many people. </li></ul></ul><ul><ul><li>You can get more done with fewer people by knowing what your people do best. </li></ul></ul><ul><ul><li>Evaluate your talent. Carefully consider your need for every one of your employees. </li></ul></ul><ul><ul><li>Most businesses are not maximizing each and every employee they have. </li></ul></ul><ul><ul><li>There are techniques available to ensure talent maximization. </li></ul></ul><ul><ul><li>Find and replicate your best performers. </li></ul></ul>

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<ul><li>It Is Imperative That Frequent And Clear Communication Lead The Way To Your Success. </li></ul><ul><ul><li>There Is Fear In The Marketplace. </li></ul></ul><ul><ul><li>Employees are wondering if you’re going to cut staff, perquisites, and their free coffee. </li></ul></ul><ul><ul><li>Employees are heavily invested in the success of the business, and they have a right to know what you’re doing. </li></ul></ul><ul><ul><ul><li>Even saying, “I don’t know” is preferable to not communicating. </li></ul></ul></ul><ul><ul><ul><li>It’s more than a memo or company-wide e-mail. </li></ul></ul></ul><ul><ul><ul><li>Managers and supervisors must be empowered to candidly talk with their staffs as well. </li></ul></ul></ul><ul><ul><li>Before You Consider Cuts, Survey Your Employees: </li></ul></ul><ul><ul><ul><li>What benefits would you cut if we needed to? </li></ul></ul></ul><ul><ul><ul><li>You will be surprised that the suggestions you get. </li></ul></ul></ul>Businesses that communicate effectively are those who will succeed

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Get Your “Human Capital” House In Order <ul><li>Audit all policies/procedures, especially wage & hour </li></ul><ul><li>Re-evaluate hiring procedures, and consider new methods to hire and retain quality employees – it matters even more in a downturn </li></ul><ul><li>Survey your employees – find out what they’re looking for or why they leave </li></ul>

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OTHER WAYS TO IMPROVE PERFORMANCE <ul><li>Recognize that adversity breeds innovation </li></ul><ul><li>Complacency </li></ul><ul><ul><li>Too many businesses have become complacent. </li></ul></ul><ul><ul><li>That complacency (“we’ve always done it this way”) has failed both businesses and employees. </li></ul></ul><ul><li>When Times Become Difficult Is The Exact Moment TO Innovate. </li></ul><ul><ul><li>Successful leaders and managers: </li></ul></ul><ul><ul><ul><li>Take a calculated risk now and again. </li></ul></ul></ul><ul><ul><ul><li>Are Innovators, or who was not considered an innovator. </li></ul></ul></ul><ul><ul><ul><li>Great leaders do not avoid or fear trouble: they embrace it. </li></ul></ul></ul><ul><ul><ul><li>This presentation, like all materials, training, and services offered by RSJ/Swenson LLC are offered and sold with the understanding that it is not engaged in rendering legal counseling or other professional service. If legal counseling or other professional assistance is required, the services of a competent practitioner in the relevant area should be sought. </li></ul></ul></ul><ul><ul><ul><li>RSJ/SWENSON LLC – MAKING PEOPLE BETTER </li></ul></ul></ul><ul><ul><ul><li>CALIFORNIA </li></ul></ul></ul><ul><ul><ul><li>15821 VENTURA BOULEVARD #490 </li></ul></ul></ul><ul><ul><ul><li>ENCINO, CA 91436 </li></ul></ul></ul><ul><ul><ul><li>818.461.1874 </li></ul></ul></ul><ul><ul><ul><li>NEVADA </li></ul></ul></ul><ul><ul><ul><li>8989 W. FLAMINGO ROAD </li></ul></ul></ul><ul><ul><ul><li>LAS VEGAS, NV 89147 </li></ul></ul></ul><ul><ul><ul><li>702.688.4002 </li></ul></ul></ul>