You want a seat at the decision making table. The pathway to that seat and influence is showing ROI to leadership. ROI still very much stands for Return on Investment. But it also stands for Return on Interaction. Getting your managers and employees to interact more often leads to better results, better return on effort and investment, and better influence.
The most direct path to better ROI is reducing turnover and decreasing unanticipated expenses.
Employees who leave your organization—who you didn’t anticipate leaving—become unbudgeted expenses. According to SHRM, the Society of Human Resource Management, the cost of replacing an employee is roughly 1.5X to 2.2X his or her earnings in replacement costs and lost productivity.
That’s $60,000 in unanticipated expenses and lost productivity to replace an employee making $50,000.
At Truvelop, we recently pulled a section of more than 1,000 employees data across eight different industries. Here are the findings:
A players 23%
B players 60%
C players 12%
At the top end of the distribution you see 4% of the employee pool identified as “A++.” These are the top people in your organization who demonstrate tremendous production, potential, and value to your organization. These are people who have options.
If you don’t celebrate, elevate, and appreciate them, someone else will. And if you don’t know who they are, you run the risk of losing them because they know who they are.
While 4% might not seem like a large enough number to concern yourself with consider this:
If you lost 4% of your valued team members in the next year—or sooner—the unplanned expense would cost you between six and nine percent of your overall payroll outlay to replace the people you couldn’t afford to lose in the first place.
A company with a $500,000 annual payroll that loses 4% of its employees, who the company did not anticipate losing, could take on the weight of $24,000 in unbudgeted costs to replace those employees ($20,000 salaries. $24,000 to replace those salaries.)
Move the payroll up to $5 million dollars and now we are talking about saving the organization roughly a quarter of a million dollars a year by keeping unplanned expenses off the books.
The path to reducing unwanted turnover is fairly straight forward:
- Identify the high performers and high potential performers in your organization.
- Celebrate, elevate, and appreciate them.
- Keep them growing, engaged, and in your organization.
- Rinse and repeat.
By following that approach you also tap into a strong and growing desire in the workplace. Research done by Linked In indicates that 69% of employees want more feedback. That number is likely higher among your top performers.
There’s another ROI at stake here as well. Training dollars. If you are clear on your top performers and top potential performers, then you have a more targeted group to spend your training dollars on. You have to know who your highest value employees are to invest in them.
Better data drives better decisions.
Better communication of that data leads to more engaged employees. According to a recent Gallup poll, employees whose managers regularly communicate with them are nearly three times more engaged than those with managers who don’t regularly communicate.
- More engaged employees.
- Fewer unbudgeted expenses.
- Higher employee retention of high performance and high potential employees.
An HR professional who brings those results and the pathway to those results to the C-Suite is a professional who will be welcomed to the decision making table with a reception worthy of a rock star.
If you would like to see how Truvelop can get you there, connect with one of our team members at firstname.lastname@example.org.
Or, sign up for a free trial of Truvelop and see first hand how it can help you expand your influence.