The Best Business Investment
You Can Make
What if you could invest $15,000 in your business and see a 2000% return of $300,000?
Human capital and culture are among the greatest assets a company has. They are also among the most expensive assets. And a lot of the cost/value is not readily apparent on a few line items in your P&L.
So, it is often neglected. You have tech and marketing strategies with tech and marketing budgets. How about a people strategy with a people development budget (salaries not included)? Let's take a look at some of the ROI potential of strategic human capital investments.
Cost of
LOW ENGAGEMENT
> 30%
Your annual Revenue
According to Gallup studies:
-
Low engagement is costing the globally economy $8.8 trillion annually
-
Engagement is at a 10-year low
-
Only 31% of employees are engaged
​
How about your company? How many of your employees are 100% engaged and performing at 100% of their potential? Have you done an engagement survey recently to get their word for it?
​
Even if your company is way above average, with 50% engagement, that means half of your company could be producing more revenue and saving more costs for your business.
​
Multiply the number of your employees * the average salary * even .2 (20% of unproductive time). How much money is your company wasting?
​
Netflix (who, by the way is very intentional, about their culture and human capital programs) produces almost $3M in revenue per employee. How does your per employee productivity compare?
Cost of
Turnover
+/- 15%
Your annual Revenue
The cost of turnover is estimated at .5 - 2x an employee's salary. So, if a company loses 5 highly skilled employees who were paid an average of $120,000 annually, this has cost the company roughly
$600,000 - 1.2 Million
​How so? Lost productivity while positions are vacant, recruiter costs or internal recruiting staff, lost productivity of teammates covering for vacated employees, lost productivity of the hiring manager.
If you're that hiring manager, what's your time worth?
​
How many employees has your company lost in the last 3 years? What did that cost you? If you could cut that by 10% per year, what would it save your company?
Value of
AMAZING CULTURE
Cost of
TOXIC CULTURE
SHRM (Society of Human Resource Management) said toxic workplace cultures are costing US businesses alone over $200 billion!
According to a study at Columbia University's Business School:
-
Culture is the greatest off balance sheet asset of the company
-
Leadership often undervalues and under-invests in culture
-
54% of potential buyers would walk away from a potential acquisition target because of poor culture fit
-
Another 33% would discount their buying price by 10-30%
-
Only 16% say their culture is where it needs to be
​​
Do you want to sell your business or be acquired? Would you want to lose 50% of buyers or discount the sell price by 10-30%
​
If you want to scale your business, culture is key to high performance as well as attracting and retaining talent.
​
Even if your culture is great now, due to what I call the culture degradation principle, it will not stay that way as the company matures and scales without sustained efforts. Award-winning cultures take constant attention. A championship winning team, won't repeat the championship settling for the same performance as last year. The difference between average to above-average culture and outstanding culture is what sets the best above the rest!
Let us help you develop your people strategy and
implement programs and systems to foster growth and continued excellence!
​
Would you like a free consult to discover options for high return investments in your people?