When talking to a prospect or client, I have found five questions continually come up. My next several blogs will focus on each of these five questions and my response to the question.
The first question I get asked is, how can I get Senior Leadership buy-in?
I am always amazed at how comnpanies will spend hundreds of thousands of dollars on a customer survey program, but will opt for the lowest cost option for their employee survey. Rarely is the low cost option the best option.
I have found Senior Leaders take notice when dollars are invovled. In order to get buy-in, it makes sense to talk dollars and cents. Below are a few ways to talk about the financial impact of improving employee loyalty.
-Cost of Replacing a Worker
It can cost anywhere from 50% to 300% of an employees’ salary to replace the employee depending on the level of expertise of the employee. Many companies do not realize the significant impact replacing employees can have on a bottom line. The average number I usually read is 1.5 times an employees’ salary to replace an employee. So let’s put this in real dollars to see the impact. Let’s say a company is replacing 10 employees a year and the salary of these employees is $40,000 a year. It is costing this company $600,000 a year to replace these employees, that is $50,000 a month, roughly $11,500 a week, or $2,300 each business day. Even if you could keep an employee an extra six months, it will probably pay for the cost of an employee loyalty study.
-Linking Employee Metrics to Business Outcomes
Far too often HR is not seen as stragic because they do not tie what they do, to organizational initiatives. By creating a business case showing the impact an HR initiative can have on business metrics like turnover, productivity, absenteeism, referrals, etc. will create buy-in from Senior Leaders
-Impact on the Customer
When you mention the customer word to Senior Leaders, usually their ears start to perk up. By demonstrating the link between employee initiatives and customers, Senior Leaders will generally start to take notice and view HR as a strategic and integral part of the organization. I wrote several blogs on the relationship between employee loyalty and customer loyalty. To read these, you can go here: