Employee Retention Soars on Eagles' Wings: PRIDE in Performance
New Jersey Tech News, June/July 2001

BY BARI FAYE SIEGEL, EDITOR

In this tight labor market, where the demand for high-quality IT employees fat exceeds the supply of qualified employees, most companies are focused on attracting the best and the brightest.  Don Deieso, former CEO of Alphanet Solutions in Cedar Knolls, said the best way to manage a strong employee base is to concentrate on keeping those already committed to your team in their seats.

"Retention is the No. 1 issue. If you can retain a talented person, you save a recruiting fee, the down time and the disruption to the organization," said Deieso. "We’ve put a premium on retention programs. You always need effective recruiting programs but retention is at the heart of the HR business."

When John Warren joined Alphanet in October 1997 as the vice president of human resources, he walked into a hornet’s nest of challenges. Previously, the company outsourced the HR duties to recruiters and Warren immediately saw rippling effects of the company’s failure to concentrate on keeping employees happy; turnover rates exceeded 38 percent.

"We immediately looked at exit interviews and made changes in our compensation plan. But we found out something very interesting - most of the people were leaving because they didn’t think they were developing careers at Alphanet," Warren explained. "We had grown to over 700 employees and weren’t having much trouble attracting new hires. Our problem was keeping them in the jobs. Our IT people were always looking outside for new opportunities."

Warren and his team at Alphanet decided to act quickly to stem the brain drain. After considerable discussion, they decided the key was employee development. By increasing an employee’s skills, Alphanet stood to gain in two ways: a better qualified worker would mean added value to a client and a more developed individual wouldn’t continue to look for opportunities outside the company.

He reached our to management consulting firm Inside Management Associates with an idea for a long-term staff development program that would improve employee morale, increase value for clients and stop the dramatic turnover in its tracks. "Screaming Eagles," a customized version of the PRIDE program, was born.

PRIDE, Premiere Individual Development Program, fosters pride in one’s company and pride in one’s own work. The program was created by Inside Management Associates, a Somerset-based firm geared to business coaching and implementation of organization development, customized business training and talent retention.

Rouskas said the program works because it requires a long-term commitment from the employees and rewards them with satisfaction and financial bonuses. At Alphanet, 18 modules were taught every two weeks over a nine-month period by certified instructors. "It is done in short spurts of three hours and it is driven by case study. The case study is relevant to the participants’ positions because we present information that they face on the job on a regular basis. For example what do you do when the client is asking you to do something that doesn’t seem ethical? There is a module on business ethics."

Other modules in the PRIDE program include: communication, relationship building, effective consulting, organizational skills, time management, technical writing, proposal writing, the people side of project management, management skills, conducting meetings, effective team skills and conflict management.

"We believe these are issues that art universal. Communication is the backbone of every good business —communication within the employee base, with managers and with clients," Rouskas said. "Resolving conflicts is universal. All companies deal with issues of business ethics at one time or another. PRIDE is designed to teach all of the key points of the universal business model and we customize it to each company’s specific needs, as well."

Warren agrees, noting a company doesn’t have to have hundreds of employees to benefit from a program such as PRIDE. "This program is adaptable and the skills we targeted would be useful for any company’s employees," he added. "Communication skills, writing, business analysis, project management - those are some of the biggest skills needed to succeed in any workplace.

Many consultants are experts when it comes to information technology, but they aren’t prepared to deal with clients and settings that require advanced knowledge of regular business practices. PRIDE turns technical people into well-rounded business people who feel confident when dealing with co-workers, supervisors and clients, Rouskas said.

"This program provides team skills and the dimension of culture. In the case of Screaming Eagles, where most of the employees were consultants on client sites, we gave them the skills to uncover the culture of the client, determine who the decision makers were and identify potential needs in a client company.  It allows them to translate business needs to technical specs," he added.

Another important aspect of the program is that it forces participants to commit to action, according to Rouskas. "After each class, we ask participants to write down an action they will take over the next two weeks that will utilize what they’ve learned in the class. Then, we create a buddy system. We ask them to pair off with another person who will check in with them in between classes to insure they take the task seriously and follow through."

One example might come out of the "Art of Giving and Soliciting Feedback" module. If a participant feels he doesn’t receive enough support from a manager, he learns in the class that he has the responsibility of communicating with the boss. He might choose a particular issue and plan to talk to the manager about it that week.

Warren said, "the participants would share experiences in which they took information they learned and used it at a client site. Sharing this information with the group during the next class was incredibly important and valuable for all participants."

All of these skills increase an employee’s value to the firm because the client enjoys better communication and feels the on-site consultant is part of the team. At $100-$200 an hour, Alphanet began to see the benefits of Screaming Eagles in dollars and cents. After four sessions of the employee development program, the IT company halved its turnover rate. Warren reported that Screaming Eagles, with its financial incentives programs, cut turnover to under 20 percent!

The financial incentives give employees a reason to stay put. At Alphanet, graduates of the Screaming Eagle program received a 5 percent salary in crease upon graduation and a one-time 5 percent bonus one year after graduation. Warren sees these "golden handcuffs" as an integral part of the program and feels they are worth their weight, in, well, gold.

"We wanted our employees to see Screaming Eagles as a prestigious opportunity - one that was worth joining and sticking with and we wanted to reward them for their participation," Warren said. "We gave them golf shirts and notebooks and we held a formal graduation with trophies and certificates presented by Alphanet’s CEO Don Deieso."

In addition to increasing employee retention rates, Deieso said he believes Screaming Eagles had been financially prudent, as well. He said the funding for Screaming Eagles, which worked out to a cost of about $2,500 per employee, was money well spent. In fact, Alphanet estimates that it costs the firm $8,500 to recruit a replacement when a valued staff member leaves. Additionally, it takes between four to five weeks to replace the person; that’s loss of productivity at about $100 an hour. When you multiply approximately $4,000 per week of lost revenue times the five weeks of down time, you’re waving bye-bye to $20,000.

"We knew that the $2,500 investment per person was going to keep people in the positions. This is a revenue issue. If you don’t have someone at the client site you could be losing $100 to $200 in revenue per hour," estimated Warren, who left Alphanet in 1999 to join Anadigics as vice president of worldwide HR. "Isn’t that worth a $2,500 investment?"

Deieso said he can see the value of expanding the PRIDE program into a three-tiered program aimed at managers. The program, he described, would be aimed at current managers looking for career development and advancement and for other employees who are deemed "management material."

The first tier would be a concentrated introduction to management. The second would be aimed at mid level managers with more emphasis on interpersonal skills and motivation techniques. The final tier would involve senior level leaders and topics such as understanding personality traits and using financials as a tool to managing people and organizations.

"People would be selected for these programs very carefully.  When they finish the program, they assume management positions," Deieso envisioned.

Rouskas applauds Deieso’s idea for an expanded management develop­ment program based on the PRIDE principles because he feels the concepts are universal throughout any well-run organization committed to employee development and retention.

"People leave a job because they feel they are not managed well and are not appreciated by the company or they do not feel they are growing their careers," Rouskas concludes. "If we can turn that around, make them feel they are treated well and needed, and that they are developing along a solid career path, then there are fewer reasons for them to move to another company."