Human Capital & Careers

Hanging On To Employees

Desperate to retain electrical-engineering talent, Texas Instruments launches a Web-based communications tool.
David KatzNovember 30, 2000

The dreaded phone call from a headhunter comes. It’s for one of your most highly skilled employees. “But wait,” you want to say, as the worker heads for the door, “are you aware of all the benefits you’re getting from this company?”

To get a step up on just such an eventuality, Texas Instruments (TI), desperate to hold on to its electrical-engineering talent, launched a new Web-enabled, employee-retention tool last month that its workers can affectionately call “My Financial Statement.” Issued to TI’s 28,000 U.S. employees, the system offers them real-time screen profiles of their salaries, pensions, 401(k) benefits, stock options, and employee-stock-purchase plans.

It also enables them to run off “what-if” scenarios on any computer to determine what their holdings of TI stock options will amount to if the stock’s price rises to $150, say, or falls to $40. (The company’s share price was $44.25 at the close of business on November 27.) Employees can also find the length of time their shares have been held and what the value is based on current share prices, dividend reinvestments, and other details, At the same time, managers can use the system to show valued employees that the company provides them with a good deal more compensation—and potential financial growth— than merely their base pay.

But can a mere benefits-communication tool keep TI’s talent from wandering?

Melendy Lovett, a vice president of total compensation and human resources for the Dallas-based semiconductor maker, feels the system provides a competitive advantage for the company in its quest for talent. And under current conditions in the labor market, any edge would help. “We know our employees are getting unsolicited calls from headhunters,” she told CFO.com, “The scarcity of talent is impacting us in the electrical engineering area.”

Indeed, the possibility of losing top talent assumes a place on TI’s top 9 list of business risks, ranking right up there with a dip in the cell-phone market. In fact, on its Nov. 20 8-K form, which was filed to comply with Regulation FD disclosure requirements, the company listed the “ability to recruit and retain skilled personnel” as one of the “important factors that could cause actual results to differ materially from the expectations of TI or its management.” Other potential woes include the erosion of market demand for semiconductors, a falloff in technological innovation, and a failure to obtain needed licenses.

TI thinks that if it’s able to show its employees what it’s already providing in the way of current compensation and future payoffs, it can do a better job of holding onto them. The system is programmed to enable managers, by entering their passwords, to call up screens showing various aspects of an employee’s pay and benefits.

Using the system, a manager can “demonstrate the future value” of an employee’s compensation plans while discussing the employee’s bright prospects with the company, Lovett says. TI’s human resources department also has access to employee pay and benefits data via the system, but only in the aggregate.

For their part, employees, who view different screens than their managers are able to see, can scan such information as the performance of the funds in which their 401(k)s are invested, as well as asset-allocation breakdowns. By means of a direct Internet connection between TI and fund managers, employees are able to instantaneously see their data, notes Greg Fink, vice president of Atlanta-base ProAct Technologies, the company that constructed the TI benefit system. (TI wouldn’t reveal who the fund managers of their employee 401(k) investments are.)

Employees can also see full details on their deferred compensation, bonuses, profit-sharing plans, and holdings in TI’s employee-stock- purchase program. In the latter program, employees can buy TI stock at a 15 percent discount twice a year for amounts of up to 10 percent of pay, subject to an Internal Revenue Service limitation of $20,000 a year, according to Lovett.

The new system, she says, replaced a total compensation summary issued on paper to employees once a year. The costs for the new system “are minimal–about the same as producing an annual paper document,” adds Lovett, who refused to give actual dollar figures.

The HR manager says that although the current system doesn’t include health and welfare information, the company might install a separate statement with those facts on it to complement the new benefits and compensation tool.