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. So, when I told him we've only had 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.
When is this thing going to be over? Soon, very soon. This is probably it actually. And, the reason I am writing this third installment is because 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, leave at 2pm on Fridays, almost never work late, and talk about our culture weekly. If that doesn't sound like the most soft 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 if I didn't believe they were getting the job done every day.
The ROI part takes care of itself. If you take exceptionally good care investing in your people, the return is clear.
- Money. There's 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."
- 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. And, there's 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 organizations commitment to processes and protocols that knowledge void will vary. For McDonald's it almost zilch. But for a small business an unexpected departure can leave a sinkhole in your organization that is nearly impossible to fill.