“Everything, then, must be assessed in money; for this enables men always to exchange their services, and so makes society possible.” – Aristotle (384-322 BC)
Even though Aristotle made this point over 2000 years ago, it couldn’t ring more true today. Almost everything involved in transactions today are based on a price and assessed in money.
What about Talent Management?
Beyond salary and sales, there are many important aspects of talent management that are often not tied to the bottom line. Yet, “dollarizing” the value of talent management initiatives is vital to bottom-line analysis. Whether you are placing a value or cost on your current status, or calculating the ROI of your next talent management strategy, metrics that assess the monetary value will help you see the true effect on the bottom-line.
Bottom Line Statistics
Knowing the bottom line results of talent challenges will help you implement strategies with a proven ROI that you can see on your balance sheet. Find out how much you already know by asking yourself questions like:
* What is disengagement costing the bottom line?
* What was the ROI on your last training? What can be expected of future training?
* How are your team-building initiatives impacting your bottom line?
* What was the cost of your last bad hire?
* What is your overall turnover percentage? How is it related to tenure?
In a study on over three million employees, Gallup found that over 70% of Americans who go to work are not engaged. This means businesses may be operating at significantly less than full capacity, a loss that could cost millions a year.
* What is employee disengagement costing your company?
Several thousands, millions, more?
* How can you calculate this cost?
* How does it compare to the investment of a proactive approach to increasing engagement?
With tightening budgets and a focus on cost-saving strategies, businesses worldwide are making drastic labor cuts. But is that always the right move? A recent study analyzed the savings resulting from changes in general and administrative functions and found that 75% of the savings came from strategies focused on restructuring and redesigning, while only 25% was from reducing.
* Would you, too, save three times as much on your bottom line by investing in your
people and processes?
* Is the slash and burn approach actually costing you more?
* What would the ROI be if you restructured and redesigned your workforce?
As business associates who want to make a difference in the bottom line, we might find advice in Aristotle’s quote by remembering to assess, in money, the value of talent management initiatives so we know its true worth.
How else can we place fair value on the investment in people?
After all, they are a company’s biggest asset. Aren't they?
Originally published by Target Training International
