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Employee Engagement – Serco’s Journey

Serco Internal

2 The Barriers

The Journey so far

3

Why

Agenda

4

How

The Tipping Point5

2

1

Serco Internal

The Journey So Far....

Serco Internal

The Barriers

4

Engagement was just a survey

No senior leader buy-in

No accountability – it’s HR!

No internal evidence

No resources

No sharing best practice – suspicion

Serco Internal

How?

5

Reality check - get out and about in the business

Creation of an Engagement Strategy

Develop case studies

Redesign and reposition the survey

Set up a Global Engagement network

Create resources to support managers

Business Linkage analysis

Develop an Engagement Master Class

Utilise internal social media platform

Build strong links with key stakeholders – internal and external

Serco Internal

Why……

…does Engagement matter to -

Serco Internal7

Engagement matters if we’re to become the World’s Greatest Service Company

Serco Internal8

Serco Customer Net Promoter Scores (NPS)

Contracts with high levels of employee engagement (65%+

engaged)

Contracts with opportunity levels of employee

engagement (45-64% engaged)

Contracts with risk levels of employee engagement (30-

44% engaged)

Contracts with destructive levels of employee

engagement (<30% engaged)

Based on analysis of 133 contracts and 489 customers in the UK and Europe division in 2011.

Employee engagement is a tool that can help retain

and win new customers

Serco has found that where employee engagement is high, there are more customers promoting Serco

Serco Internal9

At Serco, trend analysis suggests high employee engagement predicts future customer satisfaction. The reverse relationship of customer satisfaction predicting future employee engagement does not appear to be as strong.

The effects of employee engagement become stronger over time

*IMPORTANT: We need to acquire the next wave of customer survey data to begin establishing whether the trend is statistically significant or not.

….but employee engagement will catch up with them if they neglect it

Serco Internal10

Contract Director’s view of their contract?

Employees’ experience of Serco delivering the contract?

Is this sustainable?

Immediate successes might tempt some to ignore engagement or say ‘what we’re doing now works and it doesn’t matter…..’

Serco Internal

The five contract groups with notable relationships: How do employee engagement scores compare to operating profitability?

High e

mplo

yee

enga

gem

ent (

65%

+)

Oppor

tunit

y em

ploye

e en

gage

men

t (45

-64%

)

Risk /

Destru

ctive

em

ploye

e en

gage

men

t (<45

%)

0%

4%

8%

12%

16% 14%11%

7%

Operating Profit (EBIT) as a % of revenues

11

High engagement contracts produced DOUBLE the operating profits of risk/destructive engagement contracts.

Contract groups represented

Division reference

Health UK and Europe

Facilities Management UK and Europe

Public Sector Education SGS UK and Europe

Justice and Corrections ASPAC

Middle East SME

Serco Internal12

Contract Bid: £10m

Contract Bid: £10m + Engaged employees+ Governing Principles+ Rapid engagement of TUPE employees

Contract Bid: £10m + Specialist

experience of similar

contract

Contract Bid: £10m+ experience

of having world’s largest

contract portfolio

Contract Bid: £10m+ well known

brand name in the market

And it’s more than the numbers, it will make us stand out among competitors!

Serco Internal13

Build a balanced portfolio

Maintain high rebid and new win rates

Make strategic acquisitions

Develop new models

• Engaged employees are committed to us. That reduces the risk that we lose our expertise that we can transfer to other markets.

• Engagement helps build our base of customer promoters. This will help improve our rebid and new win rates.

• Engagement helps to strengthen our brand and reputation. That helps make a better case for acquisition by Serco.

• Engagement can help us collaborate effectively.

• Engagement has been found to correlate with innovation and new ideas.

To become the World’s Greatest Service Company

Engagement will help us deliver on the core elements of our strategy

Serco Internal

The Tipping Point

14

Disengagement!

Serco Internal

The Tipping Point

15

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Questions?