You have a lot to consider when determining how much you should invest in employees. Will they stay with the company long enough to make their highest contributions? Will they continue to improve their skills once they are hired? While it is expensive to screen and hire people to find the right fit a position, one bad hire can cost you in terms of productivity and new hiring expenses if you have to let them go. In this article we are going to discuss:
Employees will not stay long if they are unhappy with the company culture and their role within it. Here are the main factors that contribute to employee turnover:
Therefore, HR should focus on the single factor that can make employees stay longer.
Hiring the right candidates will make a huge difference in their overall contributions and productivity to your company. According to data recorded and processed by the workforce insights arm of credit-reporting agency Equifax, 40 percent of employees who leave their jobs voluntarily do so within six months of starting a position, and another 16 percent of employees leave within 12 months, meaning more than half of voluntary turnover happens within a year of new hires’ start dates. According to SHRM, 60% of a company’s entire workforce will leave a company within four years if the company has no formal process for ongoing training and career development.
Such high turnover can be prevented.
SHRM also found that companies with an engaging onboarding program retain 91% of their first-year workers, so investing in a robust onboarding experience should be a no-brainer, yet, according to a recent survey conducted by Kronos Inc., a workforce management technology provider, and the Human Capital Institute (HCI), 24 percent of respondents said that their company offered no onboarding program at all. To smartly invest in training and career development that will prevent turnover, we need to understand an employee’s lifetime value.
When determining investment in skills training, you need to consider employee lifetime value (ELTV), which is the total net value that an employee brings to your organization over time. ELTV is best understood in the context of your employees’ lifecycle:
To increase their total ELTV, you need procedures that will maximize:
How can HR increase ROI using ELTV? Here are four best practice tips.
Today’s talent economy requires forward-thinking companies that assess how they bring new employees into their company culture and get them up to speed so they can be productive as quickly as possible. What techniques do you use to increase the ROI of your people and make them want to stay with your company?
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