September-October 2010 
RESOURCE SPOTLIGHT::
CTHRA's Human Capital Metrics Survey Highlights
Discover how our industry differs from others. Warning: you will be pleasantly surprised!

STRATEGY SHOWCASE::
Think Like a CFO
Did you know that understanding your company's numbers can impact your career?

THIS JUST IN::

Valuable Benefits Benchmarks On The Way!

Social Media and Diversity HR Roundtables Planned

Webinar on Compensation Trends Announced

Going Global: Cable's Worldwide Expansion and HR

Member Promotions & Honors

119 New Members Joined CTHRA


CTHRA Supports HR's Drive for Hard Data: 2010 Human Capital Metrics Survey Findings Released

METHODOLOGY

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 financial services.

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 turnover.

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.

Hiring Trends
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.

Figure 3

"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.

Think Like a CFO
This article by CTHRA's Executive Director, Pamela Williams, CAE, originally appeared in CableFAX: The Skinny.

What 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 for promotion."

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."

Act Now
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 take—rolling a truck, handling a phone call, running a promotion, selling ad time or approving a capital project, to name a few examples—shows 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 bookstore.

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!


2011 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 solution!

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 as:

  • overall cost of benefits for active employees,
  • 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!


Free 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

CTHRA 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


Going 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

A Round of Applause

Comcast 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!

 

Most 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.

Top 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!

 



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