Increasing Market Value Through Talent

HR’s ad agency.
Increasing Market Value Through Talent
Windy City Summit │Chicago, IL │ May 25, 2016

HR’s ad agency. 2
Agenda
1) Focal Point – Employer Brand and Employee
Engagement
2) The Villain – The Perfect Storm
3) Definitions
4) Solutions
N. Robert Johnson, APR
Practice Leader, Workforce Communications

HR’s ad agency. 3
Employer Brand and Employee
Engagement

HR’s ad agency. 4
Banking institutions with an engaged
workforce and a stronger employer brand
outperform their peers.

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How So?
1) They attract and retain higher quality talent
2) Their people are more productive
3) They spend less on HR
But, what’s the connection to market value?

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“The full value of talent comes from how talent
choices affect those outside the
organization, not just inside.” – Dave Ulrich
Translation
In addition to being great employees, higher quality talent that is
engaged build stronger customer relationships which leads to
higher market value.
Source: Taking Stock of Your Talent, Workforce, Dave Ulrich, February 2016

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Source: Universum/Richard Mosley

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Intangible Value
1) Market value comes from “intangibles” as a
group (i.e. strategy, brand, talent, etc.)
2) 30 percent of intangibles is related to quality of
leadership, based on research by Ulrich
3) Leadership = talent
4) To do: Run P/E comparisons for industry
competitors

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Apple’s 10 year P/E average = 22 while industry average = 14.6
50% of Apple’s $750 billion market cap is based on intangibles (22 – 14.6 = 7.4; 7.4/14.6 = 50 percent)
If leadership/talent is 30% of intangibles, Apple’s value of talent is $110 billion (30% of Apple’s intangibles)
Source: Taking Stock of Your Talent, Workforce, Dave Ulrich, February 2016

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Source: Boston Consulting Group

Perfect Storm

Warning: Perfect Storm Ahead
The impact of an improving economy, talent
mobility, weaker employer-employee
connections, and a consumer-driven
communications world increases the difficulty of
attracting and keeping critical talent.

The State of Talent
1) Talent has more employment options than ever (small
business, gig-economy, start-ups)
2) Talent will research a new employment opportunity just as
they research everything else (consumer-driven behavior)
3) Talent has a heightened experience expectation in our
brand interactions, as well as shorter attention spans
4) Talent, generally speaking, is less connected to current
employers

1) While unemployment is at a seven-year low …
2) It’s taking 8% longer to hire and
3) It costs 7% more to hire candidates
(Bersin by Deloitte 2015)
The average cost-per-hire is $4,200 with increases in the high-
tech, financial and manufacturing industries. (ERE, 2015)
The State of Talent

The State of Talent
74% of employees are open to a new job (Jobvite 2016)
45%
of employees are not actively seeking but are
open to a new job (Jobvite 2015)
51%
of workers are satisfied but are open to a new
job (70% of Millennial males satisfied and open)
(Jobvite 2016)

2016 Outlook
on the state of
talent
competition
Significant increase 35%
Some increase 56%
No 10%
1 in 3 employees are planning to leave their current organization
within the next 12 months.
Source: Future-Proofing HR Mercer, 2016
The State of Talent

An unstable workforce erodes culture and is
extraordinarily expensive.
• Increases HR spending (recruitment, rehire,
interventions, etc.)
• Decreases productivity and engagement (both
within individual role and throughout the
unit/group)
Impact

The average cost of turnover is between 90%
and 200% of an exiting employee’s base
salary and represents 12% of a company’s
operating budget.
Source: Fortune 100 Best Companies to Work For® 2016
Impact

A disengaged employee costs an organization
approximately $3,400 for every $10,000 in
annual salary. Disengaged employees cost
the American economy up to $350 billion per
year due to lost productivity.
Source: Gallup Organization
Impact

But, here’s the good news: On average, the
Fortune 100 Best Companies see half of the
voluntary turnover of their industry peers.
Impact

There is a direct connection between trust and
purpose; and engagement and retention. Research
shows that employees feel a great workplace is
one where …
• There is trust between employees and employer
• Employees take pride in their work
• Employees enjoy the people they work with

Employees who want to stay for a long time
report:
• My work has special meaning, it’s not just
a job
• When I look at what we accomplish, I have
a sense of pride
• I feel I make a difference here

Why executives love their jobs …
• 47% workplace relationships
• 21% company culture/values
• 18% growth opportunities
• 4% pay/compensation Nearly 70% say that working for
a company that is aligned to
my values would dramatically
improve their feelings about
their job.
Source: Korn Ferry Hay Group, 2016

1) People are looking to connect in a deeper,
more meaningful way with their
employers
2) They will connect when there is alignment
with mission, culture and values
3) This creates pressure to define and
articulate culture, mission and values

Definitions

Employees’ commitment to the
organization and willingness to give extra
effort to their employer.
Employee Engagement

Line of Sight + Commitment
(I know what I have
to do and why)
(I have the commitment, motivation
and I’m empowered to do what I
have to)
Employee Engagement

Employer branding is the story of you as an
employer.
But, it’s a story of your employment
experience as formed and told by the
everyday experiences of your employees.
Employer Brand

Employer brands are made up of …
1) Employer brand promise (what we stand for,
mission/culture/values)
2) Employer brand attributes (the things that connect us)
3) Employer brand architecture (how to express it –
words, images, behaviors, actions)
4) Employee value proposition (specific elements of the
employer-employee employment deal)

The strongest employer brands reflect the
validated story of an organization’s
employment experience.
Employer Brand Strength Continuum
weaker stronger
“We’ll just go
with what we
think”
“We’re using
validated
employee
perspectives”
Source: David Group, Workforce Communications Practice

Solutions

Embrace the Fortune 100 Best Companies
to Work For® model and create a great work
environment, one that attracts and engages.
But, understand that it’s much more than just
advertising, marketing and communications.

Walking the
Talk
I See
(Every Day Experiences)
Imperative
Align your employees’
everyday experiences
and your internal
branding and
communications
Based on work by Johnson, D’Aprix and Quirke
High
Low
Foundation
Experience softens attitudes; solid
foundation for internal
communications programs; but
employees will have a hard time
committing without communication
reinforcement
Performance
Communications and experiences
are aligned; strong commitment to
leadership and direction of
organization
Adrift
No one knows what matters; risk
of high disengagement; distrust in
leadership and self
Lost
Employees distrust what they are
told; dissonance between sight
and messages; potential
disconnection between aspirational
and authentic employment story
Low High
I’m Told
(Branding/Communications Effectiveness)

Among the Things I’m Told
• Leadership communications
• What manager/supervisor says
• Rewards communications
• Statements of mission and values
• “State of the business” communications
• Employer branding messaging
Among the Things I See
• Leadership behavior
• Manager/Supervisor does
• Rewards given out
• Workplace decisions
• “State of the business” seen
• Employer branding experiences
• What colleagues say
• What friends say
• What peers say
• Reputation in community
See – Told Differences

1) As deeply as possible, understand your workforce (the
elements of “walk” versus “talk”)
2) Use employer branding to define and communicate your
mission, culture and values throughout the employee lifecycle*
3) Use internal communications to connect and drive
engagement
1) Pay particular attention to on-boarding messages and
reinforcements
4) Become active listeners and accept the principles of “all-way”
communication
* Lifecycle found in Addendum

Employee Understanding
Among the ways to better understand your employees …
• Employee engagement surveys
• Focus groups and stakeholder interviews
• Stay and exit interviews
• Communications audits and testing
• Reputation monitoring and assessments
• On-going active listening programs

High-performing employer
brands are …
• Planned
• Systematic
• Purposeful
• Aligned to business
needs
Employer Brand

HR’s ad agency.
The power of
internal
communications
Retain great
people
Help great
people
accomplish
great things
Empower
great people
to tell your
great story
Create a
great
workplace
environment
38
Employee Communications
High-performing employee
communications are [also] …
• Planned
• Systematic
• Purposeful
• Aligned to business needs

Hierarchy of Engagement
Communications
Success
Senior Most Leaders Involved in Shaping
Communications
What success looks like
Communication
Integral to
Change
Leader and Line
Managers create
Line of Sight
Managers’
Actions Support
Words
Making it work
Activity Links to
Business
Strategy
Evaluation Data
Acted Upon
Feedback
Known to Senior
Management
Line Managers
Trained and
Evaluated
The basics
Skilled
Communications
Planned
Messaging and
Timing
Old and New
Channels
Listening and
Intelligence
Gathering
Line Managers
Clear about
Role
Based on work by Towers Watson, Melcrum and D’Aprix

One more thought …
Appeal to a customer’s reason and you’ve got
them for the day.
Appeal to their emotions and you’ve got them
for a lifetime.
Source: Lippencott Consultancy

Contact
N. Robert Johnson, APR
The David Group
216.685.4486 (direct) 216.410.5258 (cell)
nrjohnson@davidgroup.com
www.davidgroup.com

HR’s ad agency.
HR’s ad agency.
We apply advertising and marketing practices to
help organizations attract and retain talent.
The focus of The David Group’s workforce
communications practice is to strengthen
employer brands, engage people and cut the
cost of talent.
43

Employer Branding for attraction Employer brand and employee communications for retention
• Social Media
• PR/Publicity
• Employees
• Patients
• Careers site
• Talent
community
• Special
events
• Corp. site
• Mobile site
• EE Stories
• ATS
• Mobile site
• Recruiters
• Hiring Mgr
• Process and
updates
• Offer
• Alignment
experience
• Collateral
• Initial
engagement
• EE comm
• Leadership
comm
• Rewards
• Engagement
drivers
• Exit interview
• Social media
• Special events
Employee Lifecycle

Increasing Market Value Through Talent

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