What's the ROI of people? (Part 3)
I went on vacation last week. It was my first proper vacation in a very long time. While on this vacation, I was with a friend discussing our businesses. His is larger and mine is small. He's a consultant and it's his business to help others with theirs. When I told him we've had only one person leave voluntarily in five years, I took his praise to heart. He was impressed. I was proud. And, then I realized I had a part three to write.
Part three? When is this thing going to be over? Soon – very soon. This is probably it actually. The reason I am writing this third installment is that I want to! I want to write it as much for you as I do for my team. We have invested what could be viewed as a disproportionate amount of time to culture for such a small company. We throw parties, try to leave at 2 pm on Fridays, almost never work late and talk about our culture weekly. If that doesn't sound like the softest as Silicon Valley shite you've ever heard, then you're probably reading this from a hover chair in Silicon Valley. I was almost too embarrassed to say the truth. I am not bragging – I am exposing us. This is an uncomfortable admission for me. It's a risk to reveal to the world your team doesn't work late into the night for their clients. And, I couldn't say this if I didn't believe they were getting the job done every day.
If you take exceptionally good care of investing in your people, the return is clear.
- Productivity. The reason I am unafraid to admit my team works less than normal agency hours is that of productivity. They are fully engaged during the workday. I have been a disengaged employee. I remember working 12 hour days and doing 4 hours of work. I basically crept around trying to maximize my fantasy football team so the agency could bill $200/hr for my time. But I didn't care about my job. They were not invested in me, and I returned the favor.
- Money. There are a million studies and blogs and here's one that says, "For example, the cost to replace a $40k manager would be $8,000, but the cost to replace a $100k CEO is $213,000." It's expensive to lose someone. Investing in your team is not about bean bag chairs and foosball tables, it's an investment with a financial return.
- Time. I've said it many times, but time is the one thing we can never get back. Losing an employee results in time lost on recruitment, interviews, training and the time it takes to get up to speed on everything. There are no guarantees the new employee will be as productive as the one who left.
- Knowledge. How much information is going out the door when a key person leaves. Depending on your organization's commitment to processes and protocols that knowledge void will vary. For McDonald's, it's almost zilch. But for a small business, an unexpected departure can leave a sinkhole in your organization that is nearly impossible to fill.
- Morale. When your desk-mate or buddy leaves the company, it's only natural for everyone else to wonder about their own future. When you look around your work world, is everyone itching to escape or invested in the long term? Whether it's melancholy or jolly, the energy in your office is contagious.
If you see a ping pong table at an office, proceed with caution. It may be a booby trap. Jeff and I worked together at an agency and in our first week we went and played ping-pong to take a break from our screens. When a veteran employee saw us, his head tilted like a bewildered beagle and he said, "I've never seen anyone use this before." He walked away slowly. We put our paddles down and never picked them up again.
It's not about ping pong tables. It's about investing in your team. Do they even like ping pong? Don't overthink it, and don't try too hard. It's actually pretty simple. If you care for your people, they will care for your clients. If you care about your clients, your clients will care for you.
This is the final installment of the ROI series. Take care.