McLep Consultants LLC LLC

PROPOSAL TO REVIEW EMPLOYEE RETENTION AND IMPLEMENT A COST SAVINGS SOLUTION Phase 1: Determining the Cause
Mary McBride Kevin Lepley

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44 Baltimore Avenue Baltimore, MD 21231 www.mclepconsult.com

McLep Consultants LLC LLC

Table of Contents
What McLep Can Do For You ................................................................................................2 Proposal Objectives..................................................................................................................3 Deliverables .............................................................................................................................3 Projected Costs and Schedule..................................................................................................4

Table of Figures
Figure 11 Figure 22

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McLep Consultants LLC LLC

High Employee Turnover Historically, the Department of Hematology has had an outstanding record of employee retention. From 2000-2006, the employee retention rate ranked the highest in the University with a 95% retention rate (Figure 1). However, in the last two years there has been a dramatic decrease in the retention rate of your department. In 2007, 5 out of 7 employees resigned within a six month period alone. In the last two years, nearly every single staff position has turned over at least once, with the exception of one management position. That is a retention rate of 5% - thats almost a 100% turnover in 2 years. Further, your employees reported the lowest scores on the organizational wide employee satisfaction survey. These are serious issues facing your department. It is crucial that the underlying reasons behind the high attrition and dissatisfaction scores be determined in order to prevent any further loss of capital. High employee turnover and dissatisfaction is a problem for three reasons: it imposes a huge financial burden on your organization through recruitment costs and losses in productivity, it results in inefficiency, and finally it creates a resentful workforce. The top three reasons cited for employee turnover are as follows: 1) Lack of promotional opportunities for employees, 2) mistrust of management, and 3) loss in work satisfaction (employee feeling their skills and abilities are not being recognized / utilized). These are serious issues facing your organization which are draining your resources and grinding business to a halt.
Figure 1:

Retention Rate
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 Retention Rate

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McLep Consultants LLC LLC

Fiscal Costs The foremost problem with high employee turnover is the financial costs to your organization. The average cost to replace an employee can reach 150% of the employees annual compensation figure, and therefore the cost of replacement can be significant. These include recruitment and training costs, losses in productivity and new hire expenses. As an example, if each employee is making $50,000 per year, the total cost of replacement for all five employees can exceed $375,000 (Figure 2). Management positions can result in this number dramatically increasing. By taking the time and effort to correct this problem, you will not only be able to retain your staff, but will also have taken the steps to free up funding for other projects.
Figure 2:

F undingL ost
$0 ($50,000) ($100,000) ($150,000) ($200,000) ($250,000) ($300,000) ($350,000) ($400,000) 2000 2001 2002 2003 2004 2005 2006 2007 Funding Lost

What McLep Can Do For You It is our goal at McLep Consultants to determine the underlying reasons behind your low retention rates and poor employee satisfaction scores. We need to first uncover the reasons for your high attrition and low satisfaction scores before we can attempt to fix the problems. By determining the causes, we can then put in place a solution. Our preliminary analysis has revealed that your recent lack of employee retention and low satisfactory scores indicate a problem within your ______________________________________________________________________ ____
44 Baltimore Avenue Baltimore, MD 21231 www.mclepconsult.com

McLep Consultants LLC LLC organizational structure. As we will outline below, our plan is to conduct an in depth analysis of your organizational and management structure in order to unveil the problem areas. Proposal Objectives In order to effectively accomplish the above goal, McLep Consultants will: Evaluate departmental organizational structure Define and assess the current management style Review employee performances, both past and present Recommend a strategic vision and mission Identify promotional and career advancement opportunities Identify corporate culture and norms

We have developed these objectives to align with our goal of determining the reasons for your recent loss of employees and dissatisfaction. Deliverables To effectively meet our goal and accomplish our objectives, McLep Consultants has the outlined the following list of deliverables and proposed schedule of expectation. I. Surveys a. A blind survey will be administered via SurveyMonkey.com to all staff. This survey will be streamlined to obtain critical information that was lacking in the informal survey conducted by your Human Resources Department last June. Further, it will pinpoint the following areas which are crucial to success: o o o o o The quality of supervision an employee receives The ability of the employee to express ideas freely The utilization of employee skills and abilities The perception of an equitable environment The opportunities perceived by employees in regards to growth and career advancement

*It is important to note that this survey is used as tool to gage the perception of the employees and may not reflect concrete truths. However, these surveys are ______________________________________________________________________ ____
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McLep Consultants LLC LLC excellent instruments to illustrate potential problems and are generally founded in truths. II. Interviews o Conduct interviews of current employees. This will be done in an unthreatening manner which will engender your employees trust. We have a template which has proven successful in the past, but we will curtail it to fit your organization. o Conduct a thorough analysis of the employee satisfaction survey. Preliminary analysis shows that there are some organizational issues and management issues. As a result, management will be treated on an equal level as the other employees. III. Organizational Review As discussed in our prospectus, a potential root of the problem can be caused by an unclear, fragmented organizational structure. To review this potential problem, we initiate the following: o Review use of departmental space and location of staff and proximity to crucial resources, management and co-workers. o Define each employees role based on a review of job description, management expectations, employee expectations, abilities, education, experience and current performance. o Focus attention to those positions which have experienced the most frequent turnover. IV. Conduct focus groups and team oriented exercises. We will meet with management and staff in different focus groups to review current trends that are working and those items which need improvement. The team oriented exercises will engender a trusting atmosphere in which employees will speak candidly and build a sense of trust amongst themselves. Projected Costs and Schedule To adequately conduct our analysis, we will need your corporation and time and that of your staffs. In that event, please expect a mild disruption to your workflow as we meet with your employees for the interviewing and survey completion. We also will need to meet with you periodically to review our progress and answer any questions/issues we may have. It is important that ______________________________________________________________________ ____
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McLep Consultants LLC LLC your employees are fully prepped regarding the time away from their current work while participating in our workshops, surveys, interviews and focus groups.

The following illustrates our projected costs to conduct our analysis.

Hours Mary McBride Senior Consultant Survey Focus Groups Kevin Lepley Senior Consultant Space Focus Groups Rate Total

8 24

$120 hr $120 hr

$960 $2,88 0

8 24

$120 hr $120 hr

$960 $2,88 0

Follow up review over six months

48

$60 hr

$2,88 0 $10,5 60

Our project deliverables as outlined above will be conducted in the order in which they appear in this document. Further, as illustrated in our budget preview, we expect we can deliver the results with a six month timeframe. We anticipate a start date of July 1, 2008, making our projected end date January 1, 2009. If a potential delay is foreseen, we will notify the Department of Hematology 3 months prior to the projected end date of January 1, 2009. Following the project end date, we will be available for the next 6 months for follow-up to answer any questions you may have and to provide further guidance before the second phase of the project which can resume after one year. Summary

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McLep Consultants LLC LLC High turnover and employee dissatisfaction creates poor productivity and inefficiency. As noted above, this is costly. Further, your department cannot function at its greatest potential until these problems are resolved. While the high turnaround is concerning, please note that there is a solution. However, before we can fix the problem, we need to determine what is causing the problem. This is the first phase of our proposal, which as outlined above, will take a projected 6 months with another 6 months for follow-up, making the total duration of the first phase of the project one year. After phase one, we will have a clear understanding of the issues facing your organization and we can then begin to work on phase 2, which is providing solutions. This includes retaining current employees, reorganizing the current organizational structure, increasing productivity in the work force, and boosting employee morale to prevent any further loss of capital. It is our goal to ensure we meet your needs and those of your employees. McLep Consultants has helped numerous organizations such as yours increase productivity and promote employee satisfaction, leading to high retention rates and increased profits. We are confident that with your cooperation, we can return the Department of Hematology to its previous stature as a prosperous and integral part of the Cancer Center.

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44 Baltimore Avenue Baltimore, MD 21231 www.mclepconsult.com