Investing in your people drives costs down

Yes, I know that statement may sound counter-intuitive so allow me to explain.

The Facts

In a study by the University of California it was found that motivated employees:

·     Are 31% more productive

·     Have 37% higher sales

·     Are 3 times more creative

Additionally, according to a Corporate Leadership Council study on over 50,000 people, motivated employees are 87% less likely to quit. 

Gallup’s new State of the Global Workplace report shows that only 15% of employees worldwide are engaged in their jobs, which conversely means a massive 85% are not engaged. Imagine the positive impact that an organization would experience if they could transform some of these workers into engaged employees!

The Cost 

The cost of replacing an employee is estimated at anything between 90-200% of their annual salary. If we assume the average salary is $50,000 and we take a mid-range estimate of 130% as the cost to replace each worker, it equals $65,000 per person. For an organization with a turnover of 20 people per year, that relates to a cost of $1,300,000. Now can you start to see that is we invest in our people and transform them into motivated employees, who are 87% less likely to quit, we can drive down costs and therefore make more money.

It is also widely accepted that 70% of an employee’s motivation is influenced by the behavior and actions of their leadership. This begs the question as to how effectively leaders are trained once they assume the positional status? The answer is, sadly, ineffectively at best. In fact, I have experienced the in-existence of leadership training in some pretty large organizations. Far too often the wrong people are hired or promoted into leadership positions when more suitable candidates with the right attitude exist, but don’t have the experience. How are they supposed to get the experience if they are not given a chance? 

My Mission 

It is my quest and mission to change this mentality and prove that investing money and time in your employees will produce exponentially higher results. Effective leaders who empower their employees and encourage them to be actively engaged will see increases in customer satisfaction scores. When your employees are happy they are more productive and the customers will be happy. When your customers are happy their intent to return and intent to recommend increases. When you are not having to replace as many employees, your costs go down dramatically. The net result of these actions is that your business results are better. 

When we go back to our example of an organization that saves $1,300,000 by reducing their turnover by 20 people per year, would you say that investing $100,000 in training and development would be a good idea? Yes, of course it would, and that isn’t even considering the higher productivity and sales that are achieved by the more engaged employees. 

7 Tips for Success 

Here are 7 quick tips to transform your employees into engaged, high performers: 

1.    Use the Platinum rule: Treat people like they want to be treated.

2.    Be strong, but fair: Make difficult decisions for the good of the group.

3.    Communication, communication, communication: Talk the language of your team.

4.    Be a role model: Walk the walk and talk the talk, people do what people see.

5.    Empower the team: Empowerment breads ownership and responsibility.

6.    Make it about “We”, not “Me”: An organization is only as good as it’s people.

7.    Show care, compassion, and concern: People don’t care how much you know until they know how much you care. 

If you want to find out how you can develop a culture of empowerment within your organization that will create a legacy of leadership excellence, you can reach me at [email protected] and I will be happy to set up a free consultation call. You can also download a copy of my brand promise brochure here.