retention

A key priority for TELUS is to attract and retain the best talent. While this is a general truism, it is particularly important in the tight labour market in which we are operating. Team members are well aware of the job market forces and know that their skills and experience are sought after by other employers.

Ongoing programs to support the highest possible retention of our team members include:

• Customized career development plans
• Clear communication of strategies and results
• Competitive compensation
• Stock options and restricted stock units
• Competitive benefits and retirement plans
• Community service opportunities

In addition, during 2006, we began conducting standardized exit interviews across the company with selected team members who voluntarily left TELUS. The intent of these interviews is to identify why people are leaving. From there we are now better able to develop programs to address the issues. Our first set of standard exit interviews from fourth quarter - with an admittedly small sample size of 22 responses - highlighted nine reasons why people were leaving TELUS:

• Career opportunity – 46 per cent
• Pay – 18 per cent
• Lack of development opportunities – nine per cent
• Family –4.5 per cent
• Job responsibilities – too demanding – 4.5 per cent
• Job security – 4.5 per cent
• Life balance – 4.5 per cent
• Return to school – 4.5 per cent
• Working conditions/physical environment – 4.5 per cent

To help address retention issues, the TELUS Compensation team has introduced quarterly health reports for each business unit. These reports provide an all-in-one synopsis of retention statistics and exit interview results, and whether high performers are receiving compensation appropriate to their performance, retention risk and the demand for their skills in the marketplace. The intent is to identify the need for compensation adjustments for individuals who are below the recommended range and who are considered a retention risk.

A retention initiative under development is called eRewards. This interactive tool will help team members understand the total value of their employment at TELUS. A few clicks of a mouse will enable individuals to see the full picture of the rewards of working at TELUS, from base compensation and variable pay to benefits and employee share plans. Without this comprehensive view, team members often underestimate their current compensation and take a "grass is greener on the other side" attitude when looking at other employers.

e.Career is another retention-related initiative we are exploring. As mentioned, one of the top reasons former team members give for leaving TELUS is a perceived lack of career opportunities. To counter this, e.Career would allow team members to identify jobs they would be interested in and then receive an automated e-mail notifying them when there are job postings in these areas.

Voluntary turnover at TELUS increased 1.5 basis points in 2006. This represents a 22 per cent increase over 2005. While specific exit interview data does not exist for prior years, anecdotal evidence for this increase includes:

• A tighter labour market resulting in additional career advancement opportunities outside the company, including greater pay
• The prior two years had unusual hiring and departures patterns due to the unsettled labour situation and then the labour disruption in 2005