TechAlliance - Finance Peer to Peer HR Presentation

TechAlliance
Finance Group
Peer to Peer Meeting
The Financial Impact of People
January 21, 2016
Anthony Folan
Integral HR Solutions Inc.
www.integralhrsolutions.ca

Session Objectives
 Discuss the importance of Employee Engagement
 Address the importance of employee retention and the
(significant) costs associated with employee turnover
 Presenting a business argument for hiring on a full-time, part-
time, or contract basis
 The rising cost of employee benefits and insurance
programs
 Legislative Updates
 Hiring/Job Creation Strategies
2
WWW.INTEGRALHRSOLUTIONS.CA

A Recent (US) Gallup Survey
Confirmed
Actively
Disengaged
15%
Not Engaged
60%
Engaged
25%

Towers Perrin Global Study of
over 90,000 Employees
Study establishes a definitive link between
levels of engagement and financial
performance.
It also demonstrates that when companies are
searching for competitive advantages, the
workforce itself represents the largest reservoir
of untapped potential……….

The most striking data about the linkage between
employee engagement and financial performance
comes from a study of 40 global companies that
compared financial results against engagement
data.
The study confirmed that firms with the highest
percentage of engaged employees collectively
increased operating income by 19% and earnings
per share by 28% year over year.

Those companies with the lowest percentage of engaged
employees showed year-to-year declines of 33% in operating
income and 11% drop in earnings per share.

The Towers Perrin study also debunks a widely held
view that engagement is an innate trait. Rather, it
is the organization itself and most particularly its
senior leadership that has the greatest impact on
Employee engagement.

Engaged employees also are more likely to see a direct
connection between what they do and company results,
according to the study more than 80% of engaged
employees believe they can and do contribute to the
quality of products and services, and to customer
satisfaction.
Only half as many of the disengaged share this view.

Employee Retention
A number of studies relating to the cost of
turnover have been conducted. Projections
relating to costs associated with replacing a
manager earning an annual salary of $80,000
are as follows.
9

Employee Retention
 Society for Human Resource Management:
 $70,000 or 87.5% of annual salary
 Coca-Cola Retailing Research Council:
 $72,740 or 91% of annual salary
 Hay Group:
 Six Independent Studies (average)
10

Employee Retention
Hay Group Study provides some simple
calculations as follows:
The number cited is 1.5 times the salary for a
manager or professional
Half the salary for an hourly paid worker
When a senior-level person occupying a
crucial role or a high performing sales person
leaves, the costs can be as much as twice
the salary
11

Employee Retention
Costs associated with turnover:
Recruitment, Selection, Training, Onboarding, Lost
Productivity (prior to departure & during transition),
Disengaged Colleagues, Management Commitment
to Process, Customer Retention, etc.
12

Employee Retention
Costs associated with turnover:
 Cost of hiring a new person (advertising, interviewing, screening,
hiring, Search Fees)
 Cost of onboarding a new person (training, management time)
 Lost productivity (a new person may take 1-2 years to reach the
productivity of an existing person)
 Lost engagement (other employees who see high turnover disengage
and lose productivity)
 Customer service and errors (new employees take longer and are
often less adept at solving problems
 Training cost (over 2-3 years you likely invest 10-20% of an employee's
salary or more in training, that is gone)
 Cultural impact (whenever someone leaves others take time to ask
"why?").
13

Full-Time vs. Part-Time vs. Contract
 When deciding whether or not to hire FT, PT or on a Contract basis,
establish as to what makes most sense for the business.
 When deciding whether or not to hire FT, PT or on a Contract basis,
establish as to what makes most sense for the individual you are about
to hire.
 Factor in business forecasts, projections, budgets, business plans. Does
it make sense to hire on a full-time, part-time or contract basis.
14

Full-Time vs. Part-Time vs. Contract
 If considering hiring on a part-time of contract basis be cognizant
of the fact that part-time and contract employees are more likely
to move on for full-time opportunities elsewhere (certainly the
talented ones).
 Give consideration to (longer term) Retention Strategies
15

Pros & Cons – Full-time
 Full-time employees are typically more committed
 Long term return on investment (training & development)
 Generates more cohesion & teamwork
 Retention of knowledge, systems
 Full-time employee are more costly (benefit & insurance programs)
 Lose flexibility (set 40 hour schedules/work week)
 Full-time employees can become comfortable, resistant to change
 Lengthy working notice, termination provisions at time of restructuring.
16

Employee Benefits
Here are four big changes that have already affected group benefits in a big
way—and will have an even greater impact in the future.
1) Personalized Perks
At one end of the continuum boomers still value prescription drug coverage,
disability and long-term care. At the other end, their children are young and not
so focused on ailments. Perks that assist a healthy and active lifestyle—alternative
therapies, gym memberships, wellness programs or paramedicals, excite them
more.
2) Communication
Clearly illustrating the monetary rewards of benefits really resonates with younger
employees. So more and more companies are embracing infographics and have
started including total rewards statements with employment offers. It makes the
offer more dynamic.”
17

Employee Benefits
3) Embrace Technology
Technology has completely changed over the past few years. Many employees
are consummate users of mobile technology. To that end, the insurance industry
has developed mobile apps that allow iPhone, Android, BlackBerry and other
smartphone users to submit medical and dental claims online; check what they’re
covered for; see their HSA balances; and access additional information about
their drug plans, including lower-cost alternatives. E-payment services developed
by the insurance industry allow plan members to receive benefits claims payment
by direct deposit and view claims statements online.
4) Prevention over Cure
Today’s workplace has undergone a cultural overhaul, with both employer
and employee focus shifting from cure to prevention. Progressive employers
are now thinking of benefits beyond something they offer to fulfill standard
expectations. They’re looking at them more as a means to develop a more
engaged, healthy and productive workforce.”
18

Employee Benefits
Statistics Canada reports that millennials currently make up about a quarter
of the workforce—but that will swell to about 40% by 2020, when the
majority of boomers will have retired, according to U.S. research. Employers
that can cater to the needs and wants of this budding generation will have
a competitive edge.
This cohort has grown up during a time when health has evolved from
being solely about curing ailments to being more about preventive care
and overall wellness.
Recent Sun Life Financial research shows that gen Y values group benefits
less than older generations did at a similar life stage. While the importance
of core medical and dental benefits remains, the gen Y focus is more on
paramedical and lifestyle.
Gen Yers also have a greater attitude of entitlement toward their benefits
than older generations, with many gen Y employees making a concerted
effort to max out their discretionary paramedical coverage.
19

Employee Benefits
 Many employees place almost as much value on workplace benefits as
they do on salary. A recent survey asking Canadians if they’d forgo their
Benefits for a $20,000 raise, 56% said they’d keep their benefits.
 Health, dental and life-insurance coverage are typical core benefits, but
packages could include everything from disability and critical-illness
insurance to employee assistance and wellness programs.
 “To attract and retain good employees, organizations must provide
competitive benefits,” Providing a comprehensive employee benefit
and insurance programs simply become a cost of doing business.
20

Employee Benefits
Lifestyle accommodation benefits, such as flexible work arrangements,
personal and professional growth opportunities, work/life balance options,
wellness programs, flexible work hours additional vacation and other key
reward elements that support the company culture, such as green benefits
(i.e., benefits that support pro-environmental behaviour, such as transit passes
and increased telecommuting).
21

Legislative Update
 AODA – Accessibility for Ontarians with Disabilities Act .
 Bill 168 Workplace Violence & Anti-Harassment
 Bill 132 Independent Investigations for Workplace Violence & Anti-
Harassment
 OH&S Worker & Supervisor Awareness Training
22

Hiring Incentives
Abilities Connect Fund
If you are hiring postsecondary students or recent graduates with a disability,
you may be able to apply for a wage subsidy of up to $20,000 and for training
and assistive device subsidies of up to $3,000
Apprenticeship Training Tax Credit
Your Ontario business may be eligible for a tax credit up to $5,000 per year, to
hire and train an apprentice in certain skilled trades. The maximum credit
amount is $15,000 over a 36-month period.
Co-Operative Education Tax Credit
The Co-operative Education Tax Credit is a refundable tax credit. It is available to
employers who hire students enrolled in a co-operative education program at an
Ontario university or college.
The tax credit is based on salaries and wages paid to a student in a co-operative
education work placement. Corporations can claim 25 per cent of eligible expenditures
(30 per cent for small businesses). The maximum credit for each work placement
is $3,000. Most work placements are for a minimum employment period of 10 weeks up
to a maximum --of four months.
23

Hiring Incentives
Youth Job Connection
Youth Job Connection offers intensive, specialized support to youth between 15
and 29 who are not in work, school or training and who face complex and
multiple barriers to employment including:
• poverty
• homelessness
• mental health issues
Aboriginal youth, recent immigrants, youth living with disabilities, youth who have
limited work experience and youth who have low levels of education or literacy
might also benefit from Youth Job Connection.
The program provides:
• at least 60 hours of paid training to prepare youth for the workplace
• jobs for up to six months, with support and funding for employers
• mentorship, coaching and help with school and work transitions after the
program ends
24

Millennials
 Value independence but need some supervision
 Look for new challenges
 Challenge the status quo
 Want the job of their dreams not a good job
 Want the opportunity to make an impact
 Fear boredom more than anything else
25

Strategies for Managing
Millennials
 Demonstrate the stability and long-term value of your organization,
and also show how your organization is flexible and filled with
learning opportunities for them
 Provide work schedules that help them build careers and families at
the same time
 Make groups and teams are part of their job
26

Strategies for Managing
Millennials
 Demonstrate the stability and long-term value of your organization,
and also show how your organization is flexible and filled with
learning opportunities for them
 Provide work schedules that help them build careers and families at
the same time
 Make groups and teams part of their job
27

Summary of Work Characteristics
Traditionalists Boomers Xers Millennials
Practical
Always at work
Optimistic
Want recognition
Sense of entitlement
Skeptical
Confident and
independent
Hopeful and optimistic
Unwillingness to
commit
Patient, loyal and
hardworking
Difficulty with change
Teamwork and
cooperation
Do not easily accept
change
Objective, sense of
right and wrong
Self-reliant and
techno literate
Adaptable to
change
Immediate
gratification
Meaningful Work
Moral mindset
Social activism
Subjective view of
reality
Respectful of authority Ambitious
Physical health
Risk-taking
Want recognition
Value diversity and
change
Globally connected
Rule followers
Rewards later
Prefer Structure
Workaholic –”Thank
God Its’ Monday”
Balance work
and life
Technology savvy
Immediate
responsibility
WWW.INTEGRALHRSOLUTIONS.CA 28

Managing a Multi-
Generational Workforce
Differences do indeed exist…
We need to …
DEAL WITH THEM!
29

Top 10 Strategies for Managing
Millennials
 10) Increase responsibility. Millennials thrive when given real
responsibility. It gives them a sense of ownership, while making them
feel connected and valued by the organization. Help them see the
big picture, then let them run with it. Talk about the successes your
company has had in this area when interviewing potential
candidates.
30

Millennials
 9) Be a mentor. Millennials have grown up with an abundance of
role models—from parents who worked full time and still attended
every soccer match and dance recital to the latest batch of reality
stars.
 If you want to get the best out of the Millennials, you have to invest
in them. You have to give them a mentor to teach them how to
navigate the adult world.
31

Millennials
 8) Acknowledge accomplishment. Millennials have been
encouraged by parents, teachers and coaches from an early age.
They grew up on a reward-based system and are used to being
recognized for hard work and achievement. So a little overt
recognition will go a long way. J
 Justyna Czubak, author of “Millennial” Learning: On Demand
Strategies for Generation X and Beyond states: “This is truly the on-
demand workforce. They value speed, efficiency, gratification and
results… They want instant feedback and rewards, so be sure to let
them apply new knowledge immediately, and let them know how
well they've performed.”
32

Millennials
 7) Work together. Millennials love working in teams. Teamwork was
an important element to the Millennials’ upbringing. From preschool
onward Millennials were encouraged to work in groups and as a
result, they have developed strong team building skills and peer
bonds. They prefer groups to individual endeavors. As they enter the
workforce, one of their greatest strengths is the ability to collaborate
and generate a host of new, creative ideas. So, mix them in with
your more seasoned staff—you will likely experience a whole new
energy.
33

Millennials
 6) Listen to them. Millennials have grown up with loving, attentive
parents who value their opinions and give them a voice. As a result,
they have been encouraged to think differently and bring
confidence and a fresh perspective to the workplace.
 Andrew J. Chernin author of Managing and Motivating Millennial
Generation Talent says: “I honestly believe these young 21st century
employees can to take us beyond the deficiencies in our industrial
age carrot-and-stick workplace practices. Leaders can help by
listening more carefully to the values and convictions that motivate
their complaints. But more importantly, leaders must find ways to
show a lot more faith and trust in this next generation of extremely
smart, highly-skilled, thoughtful and kind-hearted young working
men and women.”
34

Millennials
 5) Life/Work balance. To Millennials, work is only one part of a well-
rounded life. Having the label of the busiest generation ever, they
play sports, volunteer in the community, participate in clubs and
don’t let work take priority over those things. They have seen
generations before make significant family and life sacrifices for work
and don’t want that for themselves. They will put in a 60-hour work
week to get the job done, but not every week.
 Sarah Chuchman, head of diversity at PricewaterhouseCoopers
states: “We firmly believe that promoting work-life balance is a
‘business critical’ issue and not simply the right thing to do. Profitable
growth and sustainable business depends on attracting and
retaining top talent and we know, from our own research and
experience, that work-life policies are an essential ingredient of
successful recruitment and retention strategies.”
35

Millennials
 4) Make use of technology. Millennials have grown up with laptops,
mobile phones, Xbox and iPods. They created an entire language
for texting. They are incredibly tech-savvy and consider
communication through those enablers the norm.
 “They’ll program your iPhone for you … they’ve never lived without
the Internet and are quick to adapt to new technology,” says
Stacey Woelfel, author of The Millennials. An employer that allows
employees to leverage technology and provides flexibility via the
option to work remotely, flex time or condensed work weeks will
have a greater likelihood of retaining Millennials.
36

Millennials
 3) Keep them challenged. Millennials have grown up participating in
multiple sports teams, student activities and social clubs. In her
article, “Managing Millennials,” Susan M. Heathfield says: “Millennial
employees are up for a challenge and change. Boring is bad. They
seek ever-changing tasks within their work. What’s happening next is
their mantra. Don’t bore them, ignore them or trivialize their
contribution.”
 Millennials like constant stimulation, new projects and learning
opportunities. They lose interest if they feel their work is falling into a
routine. Millennials don’t complain about challenges, they seek
them.
37

Millennials
 2) Remember the golden rule. Treat others with respect. Respect is a
two-way street, and Millennials will contribute more time and effort
when they feel they are respected by managers and colleagues.
Even though they have not been in the work force as long, they
want their results to be appreciated and ideas valued … they want
a voice.
38

Millennials
 1) Have fun. Millennials believe that life is too short to take too much
too seriously. Ms. Heathfield continues: “Provide a fun, employee-
centered workplace. Millennials want to enjoy their work. They want
to enjoy their workplace. They want to make friends in their
workplace. Worry if your millennial employees aren’t laughing, going
out with workplace friends for lunch, and helping plan the next
company event or committee.” Millennials want to take one day at
a time and make the most of it.
39

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