This document discusses the importance of employee retention and engagement for business performance. It provides examples showing that companies with higher employee retention rates experience significantly higher sales and profits. Retention is closely linked to employee engagement. A small number of managers are often responsible for most attrition. The document recommends focusing on high performing "star" employees and solid contributors by providing career growth opportunities, competitive pay, and addressing issues with poor performing managers. It suggests using surveys to measure engagement and tracking attrition data to understand retention issues. Suggested actions include improving communication, compensation, career development programs, and performance management to enhance engagement and retention.

1. Human Capital – Performance & Rewards Ernst & Young Romania

2. Employee Engagement

3. Retaining Employees – Business Impact Taco Bell – Top 20% employee-retention stores had double the sales and were 55% more profitable than bottom 20% employee-retention stores. Marriott -10% reduction in turnover leads to $50-$100 million increase in revenue. 1 % reduction in attrition for IBM global services India resulted in a saving of 1 mil $ per annum.

4. Key Principles of Retention Retention is fundamentally linked to engagement A few leaders/managers drive most of attrition Its important to focus on Stars & Solid Contributors

5. Employee Engagement & Retention are directly related to each other – IT Company Illustration

6. A few Leaders/Managers drive most of Attrition “ People leave managers, not companies . . . If you have a turnover problem, look first to your managers.” First, Break All The Rules, By Marcus Buckingham & Curt Coffman “ When job opportunities are plentiful, people with crummy bosses leave.” From Hidden Value: How Great Companies Achieve Extraordinary Results With Ordinary People by Charles O’Reilly III 80% of employees view their company and their supervisor the same way. University of Michigan

7. Talent Watch Survey Data Indicates: Join companies for: Organization Factors: pay, benefits, reputation Job factors: Schedule, Challenge, Learning Leader factors: Trustworthy, Coach, Flexible Leave Companies for: Leader factors: Trustworthy, Coach, Flexible Job factors: Schedule, Challenge, Learning Organization factors: Pay, Benefits, Reputation

8. Important to focus on Stars & Solid Contributors Invest heavily in the stars (top 20-25 %) Identify the brightest talents over a period of time Give them higher responsibilities and higher variable paybacks Be conscious of not disturbing the solid contributors Grow the solidly contributing players ( 70% of the organization) They are the operational arms of the organization and its conscience in times of change Recognize and consult them Coach them on their development areas. Pay them well for their contributions Act decisively on the “disaffected marginal performers” ( bottom 5-10%) They make bad bosses & poor role models and tend to attract other sub standard performers

9. What can we do about Engagement & Retention Engagement & Retention Diagnostics Action Steps to improve Engagement & Retention

10. Engagement Diagnostics Engaged employees will : Communicate: Consistently speak positively about the organization Consult & Coach: Look at solutions & work with others to tackle it Commit: Make extra effort and have an intense desire to stay Typical Surveys focus on Leadership & People Policies Types of Engagement Analysis based on Employee Satisfaction Survey: Overall Satisfaction & Correlation with past data Analysis by Experience, Level, Education, Age, Sex Analysis by Function/Department; Supervisor/Leader

11. Retention Diagnostics Institutionalizing Attrition Analysis - Tools Used Exit analysis for all associates Attrition Analysis Framework for Organization Data Types of data analysis Voluntary/Managed Attrition Skill Wise Attrition Experience wise, Level wise attrition Band and gender analysis Root cause analysis

12. Actions to improve Engagement & Retention Communicate business direction & leadership expectations to employees regularly & ask for feedback Market driven Compensation revisions targeted at employee groups with high attrition levels (example employees with 2-6 years experience) Innovative long term incentives & retention programs Focus on career programs, job rotations & secondments Transparent, business driven & consistent implementation of perf. appraisal & annual awards linked to the appraisal programme Attrition & employee satisfaction figures indexed to leaders & retention /engagement of employees given 20-30% of weightage in their performance appraisal

13. Actions to improve Engagement & Retention (Contd.) Personnel policies simplified & communicated to all employees specially new employees; Improve induction/orientation programme for new hires Improve flexible working and mobility specially for working mothers Organize and track focus groups, 1-1 meetings and informal get-togethers Restructuring of the HR function to focus and measure responsiveness to resourcing, retention/engagement and transaction needs of the organization

14. Human Capital Services HR Infrastructure for Start-up Companies – Quick & effective start of business (Compensation, Recruitment, Labor compliance, Establishing the HR Function/HR Outsourcing) HR Due Diligence & Merger Integration – Managing Human Capital integration Risks (Due Diligence, Day 1 Readiness, Post Merger Integration) Total Rewards – Designing & Implementing Reward Prog. (Comp. Surveys, Performance Mgmt., Variable Pay Design & Implementation) Talent Management – Attracting, engaging and retaining talent (Diagnostics & Action Plans for Attracting, Engaging & Retaining Talent) Aligning People Strategy to Business – Improving focus & effectiveness of HR (HR Diagnostics & Restructuring/Enablement of HR) HR Outsourcing – Building scale & reducing costs in HR administration

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