Thought Leaders RetreatSeptember 23, 2008

Talent shortages already exist in many areas of the global workforce

Effectively handling organizational simplexity is required

Multi-dimensional leadership with information and insight

Own your function; own your vision

2

Reduce Demand Increase Supply

• Invest in education and vocational training

• Improve public-private initiatives

• Encourage prolonged work life

• Corporate initiatives

• Process/job redesign - Automate

- Offshore/Outsource

3

5

6

Building the organization and talent levels to create a “Gold standard” HR organization

Running lean HR operations that are a reference case within the company for adding value at a competitive cost

1 Getting “in tune” with the CEO and Board, using an HR lens to shape a collective people agenda that maximizes value creation

Leading cross-company initiatives to drive growth and productivity

32 Operationalizing the value-creation agenda through effective planning and performance management

Communicating progress against the value-creation framework to internal and external stakeholders

4

7 Managing business risk by achieving best-in-class performance for specialty HR functions (e.g., recruiting, employee relations)

HR leadership

Value creation in the business

Value creation within HR

5

DrivesDrives

EffectiveManagementPractices

EffectiveManagementPractices

Long-TermProfitability&Growth

Long-TermProfitability&Growth

DrivesDrivesEmployeeSatisfactionEmployeeSatisfaction

DrivesDrivesCustomerSatisfactionCustomerSatisfaction

Execution

Innovation

(2)

(1)

Leveraging the Value-Profit-Chain…At SYSCO

SYSCO Practices:

•Leadership Support•Front-Line Supervisor •Rewards•Quality of Life•Diversity/Engagement•Customer Focus

Example: In Safety, we reduced the performance gap from top 25% and bottom 25% and increased overall safety results by nearly 50% in past 3 years.

This was accomplished through leveraging the key metric process, shared practices and reciprocal visits.

Key Metrics/Shared Practices is Working at SYSCO

Safety UpdateSafety Update

5,000 Fewer People Injured Each Year

Approximately 50% improvement for both benchmark groups and a 50%reduction in the performance gap.

0.08%

0.52%

0.44%

0.04%

0.27%0.23%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

Top 25% Bottom 25% 1998 Gap Top 25% Bottom 25% 2001GapWo

rk. C

om

p. C

ost

s to

Sal

es (

%)

.13%FY 2001

.23%FY 1998

Annual savings: $20 millionAnnual savings: $20 million

Shifted the curve in Safety!

HR strategy

•Focus IR negotiations on life time employability and incentivizing comp & benefits systems

HR management

Leadership

HR development

HR function: Multi-dimensional

•Become sparring partner of top management (CEO/COO)

•Assess impact of business early on and drive solutions

•Drive internationalization (of culture and organization)

•Overall set-up to deliver maximum value to business "HR transformation"

•Deliver administrative HR-services cost efficiently

•Build skill base beyond HR

•Professional management of restructuring•Truly support local management in HR-related issues

•Manage employment costs and flexibility

•Become the employer ofchoice

•Step-up talent manage-ment and rotation

•Address aging workforce phenomena

•Establish a performance culture, assessment of performance/potential

•Leadership quality (and quantity) not matching demand of business

10

SHRM 2008-2009 SHRM 2008-2009 Workplace TrendsWorkplace Trends Continuing high cost of health care in U. S.

Large numbers of baby boomers retiring about the same time

Threat of increased health-care costs to the economic competitiveness of the U. S.

Aging population Retention strategies for current/future workforce

SHRM 2008-2009 SHRM 2008-2009 Workplace TrendsWorkplace Trends Federal health-care legislation Preparing orgs for an older workforce Threat of U. S. or global recession Labor shortages at all skill levels Demographic shifts leading to shortages of highly skilled workers

Actions Taken in Actions Taken in Response to TrendsResponse to Trends Tuition reimbursement Greater investments in training/development

Implementing an employee-data privacy policy

Policies/procedures to protect from employee/customer identity theft

Non-disclosure, non-compete agreements for intellectual property

Actions Taken in Actions Taken in Response to TrendsResponse to Trends Measures to protect company data from natural disasters or cyber attacks

More use of technology to perform transactional HR functions

Increasing technology training Increasing training in specialized skills

Implementing preventive health programs