Supports HR's Drive for Hard Data: 2010 Human Capital Metrics
Survey Findings Released
CTHRA's 2010 Human
Capital Metrics Survey was conducted by the Society
for Human Resource Management (SHRM®) in March 2010.
Thirteen companies solely within the cable and telecommunications
industry participated by submitting data based on 2009
performance. The operator participants were:
If you want to gain buy in to your HR
ideas, you've got to support them with cold, hard facts.
And what could be better than industry-specific benchmarks
to help you build a business case for your concept? To help
you in your efforts, hot off the press are highlights from
CTHRA's 2010 Human Capital Metrics Survey.
In a year when revenue, employment and
other performance indicators plummeted for many U.S. organizations,
you'll be pleased to know that the cable and telecommunications
industry's results remained stable and even improved in
some cases. The sharp contrast on key financial performance
and productivity measures suggests not only that our industry
remained strong against a poor economy, but also that human
capital and management practices positively affected key
human capital results. Most notably, voluntary turnover
was markedly lower in CTHRA organizations compared with
the SHRM category.
With the tumultuous economy as a backdrop,
the top challenge for HR professionals is retaining employees
and keeping them motivated with limited promotional opportunities.
These concerns led HR executives who participated in CTHRA's
survey to rank turnover and cost-per-hire (CPH) metrics
as the human capital measures they found most useful.
Dramatic Increase in Revenue per FTE
CTHRA's 2010 survey determined that average revenue per
full time employee (FTE) was $1,028,944, up 37% from the
previous year (see Figure 1). Average net income per FTE
also jumped 34% to $424,566. While these increases reflect
increased productivity, this may also indicate that CTHRA
organizations may have delayed hiring new or replacement
staff as a precautionary measure during the weak economy,
or perhaps they increased the use of outsourcing or contract
labor or made investments in technology.
Figure 1: Average Revenue per FTE
CTHRA's productivity increases stand in contrast to results
in the SHRM category of large organizations, which dropped
precipitously. For the SHRM category, average revenue per
FTE dropped 66% to $143,223, while average net income per
FTE fell 92% to $4,722. This large difference between the
SHRM category and CTHRA's results reflects not only the
relative economic strength of the cable and telecommunications
industry, but also the fact that many of the organizations
in the SHRM category were from industries that performed
very poorly during the recession, such as automotive and
Turnover and Tenure
Turnover rate was the most important metric cited by CTHRA's
survey participants-an indication that retaining key talent
is seen as critical to organizational success. Although
there was a negligible 0.5% increase for annual involuntary
turnover rates from CTHRA's 2009 survey findings to its
2010 results, other turnover, such as overall, voluntary,
voluntary exempt and voluntary nonexempt, all decreased.
While such decreases may be attributed to the fact that
lack of job options outside of the organization kept employees
who wanted to leave from going elsewhere, it may also be
because employees chose to stay. Aware of high unemployment
overall and knowing friends or colleagues who were laid
off elsewhere, employees of CTHRA participants may have
gained renewed appreciation for their organization's financial
stability and the leadership practices to achieve it. As
we move to a post-recessionary economy, when voluntary turnover
typically soars, such increased appreciation may have future
payoff in terms of lower turnover rates for CTHRA organizations.
Average CTHRA overall annual turnover rate, which reflects
both voluntary and involuntary turnover, dropped from 15.7%
to 12.5% and was slightly lower than the SHRM category average
overall turnover rate of 14% (see Figure 2). The average
voluntary turnover rate dropped to 6.4% from 10.2% the previous
year. Compared with the SHRM category average voluntary
turnover rate of 15%, CTHRA's rate of 6.4% was low. While
a poor economy combined with relative financial stability
of the cable and telecommunications industry may cause employees
to focus on job security, resulting in low turnover for
CTHRA's survey participants, the difference is large enough
that it may be partially attributed to strong HR and leadership
practices to increase employee engagement and, hence, lower
Figure 2: Average Annual Turnover Rates
With turnover declining, the average employee
tenure for CTHRA participants steadily increased. In CTHRA's
2010 survey, the average employee turnover was 7.0 years,
up from 6.3 years in 2009 and 5.8 years in the 2008.
CTHRA's survey participants hired an average of 3,566 new
employees in 2009, representing a 33% decrease from the
previous year. Although our survey participants achieved
strong financial results, the decrease in hires may be the
result of low employee turnover, combined with increased
organizational productivity, as evidenced by higher revenue
per FTE and net income per FTE, thereby not necessitating
the need for additional staff. When staff needs did occur,
organizations may have been more cautious when hiring new
staff in a weak economy. Of those positions that were filled
in 2009, 72% were replacement hires, whereas 28% represented
hires due to business growth. CTHRA's overall hiring activity
outpaced the SHRM category, where overall average number
of hires was 849. CTHRA's average internal hire rate was
33% in 2009, reflecting a 4.8% decrease from the prior year.
With millions of highly skilled workers still unemployed,
the decrease in the rate of internal hires suggests that
when positions opened, internal candidates faced greater
competition from strong external candidates.
While average cost per hire (CPH) dropped
$566 for CTHRA participants and $408 for the corresponding
SHRM category from the prior year, the cable and telecommunications
industry still continued to invest more in hiring than its
counterparts. The average CPH was $4,055 for CTHRA participants
and $3,553 for similarly sized companies across industries
in SHRM's database. The results indicate that CTHRA survey
participants retained their employment practices of hiring
quality staff by continuing their investment in recruitment
and selection during the economic downturn. The average
time-to-fill metric decreased by one day from the previous
year's findings, suggesting that hiring managers took time
to selectively interview candidates and did not rush to
hire, even though the economic downturn created large pools
of qualified talent.
"When benchmarking is used wisely,
it can create support and momentum for organizational change
or can protect areas or programs that are performing well,"
shared John Dooney, SHRM's Manager of Strategic Research.
Because companies differ in their overall business strategy,
location, size and other factors, any two companies can
be well-managed, yet some of their human capital measures
may differ greatly. Dooney urges CTHRA members to always
consider human capital metrics within the context of the
business strategy and tactics of the individual organization.
Like a CFO
article by CTHRA's Executive Director, Pamela Williams,
CAE, originally appeared in CableFAX: The Skinny.
were you thinking about on your way to work this morning?
The big project you have due? Whether or not you have time
to make a Starbucks stop? Your child's upcoming school play?
Chances are you weren't fretting over Wall Street's latest
analysis of your company.
If you go to work each day giving little thought to your
employer's financial picture, you're not alone. During CTHRA's
2010 HR Symposium, world-renowned business advisor Jim Shanley
stated that many professionals leave the numbers up to the
company's finance and accounting specialists. However, he
cautioned that a hands-off approach "could be holding
you back from taking your career to the next level."
Mary Collins, president and CEO of the Media Financial Management
Association agrees, saying,"Employees who make an effort
to understand their company and how they can contribute
to its profitability will be the ones who are singled out
Top financial executives of both MSOs and programmers point
out that even employees who are far removed from corporate
headquarters benefit by keeping an eagle eye on the bottom
line and finding ways to improve it. "Even if you don't
realize exactly how your activities are related to the company's
profitability, you better believe that your boss and your
boss's boss do," says AETN SVP, Financial Planning
Art Vomvas. "Everything you can do to help improve
financial performance will make their jobs easier and definitely
get you noticed."
As for why employers look especially favorably on employees
who take an interest in the bottom line, Discovery Communications'
CFO Brad Singer sums it up this way: "A financially
educated workforce enables our company to make thoughtful
decisions in all facets of our operations, whether it's
investing in more people, marketing, programming, or facilities."
So how does someone who works in the field, the call center
or the production studio tap into this win-win game plan?
Mark H. FitzPatrick, Group VP Finance for Time Warner Cable,
recommends that you start by realizing, "financial
statistics and business performances are outcomes of decisions
and actions taken by all employees in dealing with customers,
fellow employees, and vendors. Almost every action we takerolling
a truck, handling a phone call, running a promotion, selling
ad time or approving a capital project, to name a few examplesshows
up somewhere in our results."
Next, make it your business to understand the metrics that
matter to your department. For instance, if you deal with
customers in any capacity, study your firm's customer satisfaction
and retention figures. And count your lucky stars, for you
are in a prime position to alter those numbers for the better.
As MFM's Collins points out, with every interaction you
"directly impact customer retention, satisfaction,
and revenue, which are three key components of profitability."
Although not all departments offer such a broad array of
opportunities to boost the bottom line, in every facet of
a company there are ways to increase efficiency, lower operating
costs, and save cold, hard cash. For example, Discovery's
Education group recommended a way to cut event costs-the
biggest marketing expense in the division. According to
CFO Brad Singer, "We bartered appearances by members
of our Education Speaker's Bureau for space at trade shows
and events. Not only has this maneuver saved our division
over 35 percent of its events costs, but it also has given
Discovery Education greater exposure in the marketplace."
Get to Know the Numbers
Even if you don't have a clue about corporate finances,
you have plenty of helpful resources close at hand. For
starters, AETN's Vomvas recommends that you "talk to
the people in your finance and accounting departments. They
have a vested interest in helping you understand how your
work affects your employer's financial performance because
at the end of the day this is how they will be evaluated."
Bill Fitzsimmons, Cox VP, Corporate Finance and CAO, points
out another reason employers are eager to help non-specialists
understand the basic financial figure: "We are in the
business to service our customers, and by giving employees
a sense of the financial health of the organization we can
support their belief in a solid foundation behind our commitments."
Fitzsimmons believes that sharing the numbers is especially
important now, pointing out that "in tough times, people
want more than ever to understand they work for a stable
employer, and sharing how we are doing in realistic and
clearly understood terms is one way we can help."
Matt Siegel, Time Warner Cable SVP and Treasurer, suggests
a non-threatening way for even number-phobic folks to ease
into the financial waters: "Simply start reading weekly
business magazines and the business sections of daily newspapers,
which present general corporate finance information in a
user-friendly format. Once you've become comfortable with
the subject matter, you may want to pursue various subjects
elsewhere on a deeper level."
For example, he says, "One way to gain a better understanding
of your own employer's corporate finances is to read research
reports written about the company by Wall Street analysts.
These may not always be one hundred percent correct, but
the external view they present will help increase your understanding
of your company, its competitors and industry trends."
Many companies offer periodic seminars, detailed financial
reports and other forms of information to help their employees
(especially those with budget responsibilities) understand
the ins and outs of corporate finances. Some employers,
like Discovery Communications, have formal programs on the
subject. Each quarter, CFO Brad Singer delivers a company
wide presentation called "Beyond the Numbers,"
which provides an in-depth analysis of how the company and
the industry are performing. In addition, Singer says, "We
have a global learning management system, One Learning Place,
that provides courses in the fundamentals of finance for
all employees, and we have a 'one day MBA' classroom learning
experience for our managers."
No matter what kind of tutorial help your employer may provide,
MFM's Collins recommends supplementing it with a publication
that cuts right to the heart of the matter for those in
the cable industry: a book entitled Understanding Broadcast
and Cable Finance: A Primer for Nonfinancial Managers.
Published in 2008 by the Broadcast Cable Financial Management
Association (MFM's former name), the book covers topics
that every employee needs to understand, at least at a basic
level, including revenues, expenses, capital, budgeting,
strategic planning, credit and collection, music licensing
and tax issues. You can order a copy online or from a local
The Key Figures
No one expects employees outside the financial offices to
keep on top of all of the company's money matters (if you
did that, you probably wouldn't have time to do your own
job) but it is important to be familiar with the figures
that most affect your part of the business.
FitzPatrick points out three statistics that every MSO employee
should know and understand: "Average revenue per unit
(ARPU) represents what our customers pay us each month.
Our employees should be thinking of ways we can increase
this metric by offering our customers value-added services.
"OIBDA, which stands for operating income before depreciation
and amortization, is basically revenues minus operating
expenses. It's a commonly used metric to show profitability
in continuing business activities, and it's important to
employees because it helps them understand that they need
to focus on both revenues and expenses.
"The third figure, free cash flow, is how much money
we actually put in the bank after we've covered all of our
obligations such as operating expenses, capital expenditures,
cash interest and cash taxes. This is a key metric as it
indicates what is actually available to shareholders."
On the programming side, AETN's Vomvas recommends that employees
focus on three numbers that determine a company's value,
"namely the rate of revenue growth, operating efficiency
as measured by operating margins and capital efficiency
as measured by return on invested capital. All major investment
decisions relate to driving improvements in one of these
statistics and, while they are stuffy 'business school'
terms, employees should be able to relate their own activities
to one or more of them. It is also important to understand
that these figures are interrelated; efficient revenue growth
is the key to success."
Both of these numerical triads represent the results that
corporate shareholders track. Time Warner's Siegel sums
up the reason the figures should also be front and center
on employees' radar screens: "Our objective is to have
employees who have a vested interest in both the company
and our customers. We believe that in order for employees
to have a vested interest in the company and truly enjoy
their jobs, they should act like owners."
The bottom line is that thinking like a CFO is a smart strategy
for any and every employee. So, as you head into the office
tomorrow, make a mental note to review your company's latest
financial report. It could be just what you need to take
your career to the next level!
CTHRA Benefits Survey
Wouldn't it be nice to have relevant
benchmarking benefit data available to include in your 2011
benefit planning process? Current data about benefit levels,
costs and contributions typically are not released until
August or later and are general in nature, not industry
specific. The challenging issue for CTHRA members is that
with benefit costs consuming an ever expanding share of
corporate budgets, we are all being asked probing questions
about how we compare to the competition. Now CTHRA has a
Earlier this year, we put together a group
of six CTHRA member companies (including both content providers
and MSOs) to discuss the issue and help create a tool for
CTHRA members to get industry specific competitive market
data. The goal was to determine if we could find a way
to provide relevant data at an affordable cost while limiting
the amount of time required to complete the actual survey.
We are pleased to report that we have
succeeded in this effort. Working with Willis, one of the
world's largest insurance brokerage firms, we have developed
a concise questionnaire that should take less than a
couple of hours to complete. The results, which will
be available in April 2011, will include such information
- overall cost of benefits for active
- costs as a percentage of total pay,
- employee contribution levels,
- Defined Contribution plan matches,
- relative benefit values, and
- various plan design features such as
copays, deductibles and coinsurance levels.
With this information, you can determine
how your overall benefit costs per employee relate to others
in our industry (results will be separated among MSOs and
content providers) in terms of total cost, cost per covered
employee and benefit level.
We will be releasing more information about the survey in
coming weeks. Right now we can tell you that the cost to
participate in the survey is only $2,000, and based on feedback
from our six initial participants, the data returned was
perfect for their needs. We look forward to your participation
in this meaningful survey!
CTHRA Roundtables in Denver & New York
Who says you there's no such thing as a free ride? CTHRA
will host two free HR roundtable discussions in November.
The first, titled "Putting Social Media to Work,"
will be held on Friday, November 5, from 8:30 a.m. until
11:00 a.m. at The Cable Center in Denver. The event will
focus on how industry employers are leveraging the platform
to recruit, retain, train and communicate with employees
on a day to day basis as well as during a crisis. The roundtable
will be moderated by George Simon, Associate Professor at
Denver University's Daniel School of Business, and will
kick off with a panel of experts sharing their insight:
Sheryl Anderson, SVP Human Resources and Administration
for Starz Entertainment and Starz Media, Jennifer Hwang,
Director of Client Social Media Solutions for CareerBuilder,
Kristen Kenton, co-founder and partner of K2 Consulting
Firm, and Mark Sullivan, Director of Talent Acquisition
for Time Warner. The roundtable discussion and breakfast
are free for CTHRA members thanks to the generous sponsorship
of Starz Entertainment and The Cable Center.
On November 10 from 8:15 a.m. until 10:15
a.m. at A&E Television Networks' (AETN) Chelsea location
in New York City, CTHRA will host an HR roundtable titled
"Diversity: Dynamic Solutions to Today's Challenges."
The interactive discussion will begin with a panel sharing
insight into current and emerging diversity challenges and
effective strategies to address them. The discussion will
be moderated by Lyn Cason, Director of Stanton Chase International
and will feature Tiane Mitchell Gordon, Chief Diversity
Officer of AOL, Jean-Rene Zetrenne, Senior Partner and Chief
Talent Officer North America for Ogilvy & Mather, and
Christopher Powell, Executive Vice President of HR for Scripps
Networks. With Stanton Chase International and AETN generously
covering the costs, CTHRA's New York roundtable is free
for CTHRA members. A continental breakfast will be served.
There is no cost to attend either
event, but we ask that you register at www.cthra.com/educational_events.php
Webinar: Industry Compensation Trends
On Friday, November 19 at 1 pm ET/12
noon CT/10 am PT, CTHRA will host a webinar to unveil findings
from our 2010 Annual Compensation Surveys. Moderated by
Hali Croner, President of The Croner Company, the firm that
conducted the surveys for CTHRA, the program will explore
trends in base pay, bonuses, long-term incentives and the
impact of the economy on compensation practices. The cost
is $59 and will include an interactive Q&A. To register,
please visit www.cthra.com/educational_events.php
Global: Cable's Worldwide Expansion and HR
The global marketplace provides an
abundance of opportunities for cable programmers to expand
their footprints to increase viewership and drive revenue.
However, the key to success is a well thought out plan that
embraces the unique attributes of the employment laws and
employees in each location and leverages technology to streamline
communications and operations. Read
CTHRA's article published by CableFAX
Round of Applause
Cable recently promoted Bill Strahan, SVP, Compensation,
Benefits, and Shared Services to SVP of Human Resources.
During his tenure with Comcast, Bill has led major initiatives
such as the successful implementation of Comcast's Self-Service
HRIS. Bill also serves on CTHRA's board of directors as
our treasurer. Congratulations, Bill!
Influential Minorities Named
CableFAX Magazine recently
announced The Most Influential Minorities in Cable, and
we're proud to report that there were several HR professionals
among those recognized. Congratulations to Ray Gutierrez,
EVP of HR for CBS Television Networks; Loretta Walker,
SVP/Chief HR Officer for Turner Broadcasting System; Mae
Douglas, SVP and Chief People Officer for Cox Communications;
Lisa Chang, SVP of HR for Turner Broadcasting System;
Chris Powell, EVP of HR for Scripps Networks; Paul
Richardson, SVP of HR for ESPN; Abby Pfeiffer,
SVP of HR for Charter; Jacqueline Welch, SVP of HR
for Turner Broadcasting System; Tina Waters, SVP
of Human Performance for Customer Ops, Comcast; Rosalind
Clay Carter, SVP of HR for A&E Television Networks;
Ron Phillips, SVP of Employee Engagement for Comcast;
Terri Moore, Director of Diversity and Inclusion
for Time Warner Cable; Steve Gillenwater, President
of HR, Southern Division, Comcast; Toni Holland,
VP of HR, Wisconsin, Time Warner Cable; and Janet Parker,
VP of HR for Time Warner Cable.
10 Places to Work in Cable
CableFAX Magazine recently
asked employees to complete an online nomination form if
they felt their employer is among the industry's best. The
companies recognized this year are (in alphabetical order):
Canoe Ventures, Charter Communications, Comcast, Cox Communications,
Discovery, Fox Networks, Scripps Networks, Time Warner Cable,
Turner, and WOW! Hats off to these companies!
Community is Growing
Get connected to peers across the country to
problem solve, share resources and discuss an industry-specific
perspective to key HR issues.
Community is Growing