Recording of HR Tech 2022: Fireside Chats Day 1
How to Influence Employee Lifetime Value & Drive Happiness and Engagement
Running Time: 15 min, 26 sec
Recorded on 28th June 2022
Recording of HR Tech 2022: Fireside Chats Day 1
How to influence Employee Lifetime Value & Drive Happiness and Engagement
Running Time: 15 min, 26 sec
Recorded on 28th June 2022
Mark Probert (VP of Revenue) and Erik Niewiarowski (Head of Video Content & Social Media - HR Grapevine)
Description of Webinar: On average, the highest cost in a business is in its people (70% average), when you consider everything that comes with hiring and maintaining a workforces – salary, benefits, tools, IT etc. So in fact, when you are in a Talent/HR/L&D role you are in a fantastic position to help influence the level of ROI – or Employee Lifetime Value you can bring to the business through this investment.
In this fireside chat, we will explore:
How HR can influence the Employee Lifetime Value Model
What this means for people
How doing so can retain employees and improve performance and motivation
Good morning, everyone. I hope you are enjoying the day. Welcome to our first fireside session of the morning. How you can influence employee lifetime value and drive happiness, impact and engagement across your workforce presented alongside with our partners and friends at Bridge. I’m Eric ask you’ve already seen me today so I no need to introduce myself. I’m going to introduce Mark Prober here in a minute from bridge. But before we go, because we only have 15 minutes, so I want to make the best use of our time. We have a poll up right now. We’d love for you to interact with the poll so we can get an idea of where to steer this conversation. So we want to get a pulse on how many of you have clear measures around the work you do and actual business ROI? Yes, no. And kind of so Mark, while we get those coming in, how are you today and welcome.
Yeah, very good. Thanks, Ari. Good to see you again. Welcome, everybody. Those, who don’t know me. I run the commercial team here at Bridge. And actually, just to present this, this is I had this conversation with Eric and I was kind of working on this chat and I had this conversation. I did this presentation outlining technologies and other events recently, and they gained a hell of a lot of interest. So that’s why I thought it’d be really interesting to have this chat today and help explore this a little bit better.
Great. So what are we still waiting for those results to come in? But why don’t we just kind of kick into kind of just like the. What are you going to be talking about today?
Yeah, well, I want to talk a little bit around employee lifetime value. Now, what I mean by that and I’ll explain a little bit further, but it’s how much value we can get from employees, but also how that can influence the happiness, the engagement of those employees as well. So really a bit of a a thought process because actually us in your talent are in a very unique position to influence how successful an employee can be. Right. It’s not up to anybody else. We have the control and the power to do that. And it’s how we think about each point during the lifecycle of an employee’s tenure, how we can influence that ourselves.
Great. Thank you. So we got those results that have come in 60% at kind of around 30% at no and yes at 12%. So what do you think of that?
Is that kind of what you were expecting?
Kind of. I expect you’re right. And I’m sure many people out there as well thought the same thing. Like we always give us an update. What’s the ROI kind of for us in our roles is hard for us to be able to articulate the exact exactly ROI that we would get. And actually, this is one of the one of the things that I noticed in that the Amelia in a business right and I go to my my CEO the time and normally unfortunately I go there with my hands I asking for money of some sort whether that be I need to buy a new platform a new tool. And his response quite rightly, normally it’s like, okay, but what is what do we get back since what do we get back to this? And normally that’s easy to articulate. So if it’s something like, Oh, I need to buy a new platform, oh, if we have this platform will be X amount more efficient and that will allow us to generate X amount, more pipeline, something along those lines. But when it’s new people and I say, Hey, I need to hire five more people, and they say, okay, what’s the ROI on? That is slightly harder for us to articulate the exact answer. Why an individual who brings the business so willing to do is just explore the concepts of this employee lifetime value, what it means to an individual, but also b the business as well, and how we can use that to help our conversations further up the chain in some of these scenarios we find ourselves in.
Great. Well, let’s get right into it then, shall we? So the highest cost.
In the business is people, 70% on average. That’s a big number. So how can everyone in the audience in h.r. And talent and in d roles look at this number and understand how they can impact it?
Sure. So and as you said, Eric, 70% of costs is a really big number. So on average at every business, the biggest cost they have is in their people. Yet as we’ve just found, it’s probably the hardest thing to connect an actual return on investment to which slide kind of blows your mind a bit. It’s the biggest expense that we can’t evidence the best everyone. And so what I want us to start thinking about is how we can think about the the actual life cycle of an employee. And I want to start by painting that picture. So I use my dad as an example. My dad grew up years ago, had his professional career. He had one job by him as well. I would I would call him a lifer. Right. He had one job for his whole career. I think about that now. How often you change roles within the great resignation impact that, you know, people changing and swapping and changing all the time and these are the same anymore. So what we really need to think about now is that concept of that period of time that we work with an employee is like, how can we make that the best, not only for us but also those employees? Because that’s what makes us an employer that we want to we want to work with. So that concept has changed now on average. And again, this is slightly old because it’s pre-pandemic, but the average life cycle or tenure of an employee is around about 4.2 years. So during the. 4.2 years. How can we maximize the value and the impact an employee can have for us in our shared relationship during the 4.2 years? Not for us to think about that. I want to paint a picture of what employee lifetime value actually is. Just very quickly, I want to fucking grab a screen share here so I can share my screen is that I just want to help articulate this. Absolutely.
Yes. So hopefully you guys should be able to see this. Yep. Here’s an example. Life as best is what we call temps. Now, we can’t think of ourselves in ten times just explaining this. You can say this orange period would be our shared journey, the blue. This would be in another role. So my dad, this will be the same role, right? So that’s changed that. This is what I want you to explain. So the employee like somebody some of you have seen this. This is a a universal model. Right. Can be applied to any role. Just my role is just to explain the process of this is 50 months. That’s 4.2 years. Somebody is working with us. We are on board someone, we hire someone. So actually we lose value as pay money to hire them. We have to get them kit right to get them salaries, all those sorts of things that we have to expenditure in the stock so that at the start we actually invest money. Then we go on this journey and you can see this line shoots up and over the course of the next 12 months, which is when that employee gets to the point in time where they’re starting to be an optimum level of performance, and that’s what we get to here. So that that’s the stage where we get to finally get to the point where they’re actually showing value to the business. They then go this journey to the next four years of doing their job, performing reasonably well, doing the thing, you know, showing value to the business until they get to this point to the end, which is, okay, we’re not gonna make a decision. That decision point is for them to go. Actually, I need something new in my career. I’m going to leave and I’m going to start looking for a job. You can see that productivity starts to fall off a cliff until they get to the end point, which is I’ve left at 50 months. So what I want to think about is at each of these stages, what can we, including you guys in the audience, be doing to influence these stages and what does it mean to us? So if it’s okay, if I just want to touch on these three key areas very quickly. Yes, let’s move on. And one thing that you will all be doing, and I’m sure you’ve all been doing this already, is onboarding. So how can a better onboarding experience enable us to show a more more ROI or a better lifetime value from that employee now what have you? I’m sure you’ve been working on these. You all have the tools to do these things. You’ll have the programs, but really try to think of it in the context of this. If we can create a better and more efficient onboarding program for the tools that we have, the experiences we have, the connections you make, the the experience you create for those employees. And this is why the investment in boarding is so important. You can see just by making that experience better for people, that times the effectiveness is so much quicker. So rather than being 12 months that time they start to show value. It could be items. Now that’s great for us in the business, right? So good for us in the business as well because we see quicker values and employee and actually a longer return on investment in that employee. However, if I put my employee on and say, What does that mean for me? I’m happier because I’m having an impact on my role way quicker, right? And that 12 month period at 65% of turnover happens in that first 12 month period. This will help address that. If you can show them they’re having an impact quicker, they’re less likely to leave. Right. That’s going to be super, super important. And if you see all that, it costs us maybe a little bit more here to make that onboarding experience better. Maybe we invest a little bit more around the hiring process, making that a little bit more refined. Maybe we create some sort of care packages, something when they come in, so we spend a little bit more, but the impact we see is much quicker. And again, we will have to do this right now. Right. I’m sure all of you talk about onboarding, but measure wise, think about how you can articulate how quickly you can get into effectiveness. I’ll give you an example. I’m my sales manager. One of how KPIs is measured around time effectiveness. The new sales reps, how can we get into hitting quota or 80% of quotes are quicker than what they are at the moment. The second one is that hiring. But it seems all right, we hire people the right way. But if we hire people with the correct skills, I can connect them better to the roles that they want. And you can see actually, is this that better aligned to the roles that we need them to do with the skills that they have? We actually increase the performance we can see for those employees as well. So things like that. For example, in Bridge, we have a very easy way for us to understand the skills we have not see and maybe where the gaps in development areas that we have so we can hire more effectively. And again, I’m sure you will have tools to help you do that. You can do a needs analysis, all those types of things. But really, if we’re hiring people with the skills that we need in our team and our roles for the future, we’re going to experience a better life for those employees. And then we move that on and think about continuous development. And this is where you guys. Ready. Super, super good. Right. You create those learning initiatives. You create those those plans, those continuous development plans to really accelerate some of those things. So those are some of the key areas I really want to focus on to show that you guys have the tools and the opportunity to expand the way that we start to see from those employees, but also making those people happier. Right? If people are better connected, their skills, better onboarding and you’re feeling like you’re growing them and they’re more likely to stay a little bit longer, but also be you can see what that does to them on that front.
Yeah, great. Thank you. That’s a great those does. I love those graphs. I love those models because it certainly puts it into perspective. But when I also think of myself here as an employee, because I’m not so much, most of my career has been as an employee. How to be more impactful quick in the job has always been the one of my first goals starting off at a new role.
So I guess so it’s 15 minutes is gone quick I guess. I just want to ask you real.
Quick what you think. Now, we are still in these unprecedented times, right? The last two and a half years have been just something else for the entire world pandemic, the war in Ukraine, various social justice issues throughout the world. How have these events impacted this model and will?
I actually think I said at the start, right, 4.2 years is the average tenure. I honestly that’s there’s no way that’s still the case. Right. That’s bound to be shorter. Yeah. So all that that means for us, Eric, is that this model is probably not over 50 month period and we need to think about this model of even shorter. So the importance of those things, of that onboarding process, can we get these employees to effectiveness quicker? Because if that they’re showing that impact, we get them more likely to stay with us. What we’re trying to drive here is not only the value that they deliver to us, but how can we reduce the volume of turnover in that period of shared relationship that we have and we want to create that sort of exponential growth. This is the this is the ultimate chart we want to get to. Right. Which is not only are we helping drive that performance, but they want to stay because they can see a future and a career. So what I would say, super important now, given the recent years and events that we’ve seen in the world, is really thinking about individuals. And the people sit beneath this. Yes, we want to drive ROI through some of the things that we’ve talked about an impact, but also really, really keen to think about people’s future and that’s how you’re really going to make a difference. They were thinking about their future careers, not that role specifically, but are we helping them grow and develop the skills that they want for the future? Right. That’s how we create exponential growth in these timelines.
So why is it important.
That our leaders, L.A. professionals, kind of really understand this model? More importantly, though, Mark, how do we use it to communicate up to the business, like how you mentioned before, how do we get the business leaders to buy in on this?
Yeah, and I think it comes to language. I’ve learned this throughout my my career in that when you when you go to people to present you what you’re doing or what you need to do, your role, people at that C-suite level understand numbers incredibly well. Right? That’s their job. And that role is on set numbers. So you got to be able to talk to them in number value. So if you’re going in asking for investment to create an onboarding program, use this model to help think about the impacts it will create. Hey, here’s the way the we’re going to see for generating a better onboarding plan. We’re going to have that tons of effectiveness much quicker. We’re going to see bigger impact, but we’re also going to reduce our turnover. And you can start to put numbers behind that as well to say, well, I’ll cut turnover in the first 12 months at the moment is 25% of people we lose. We’re actually buying this onboarding program. We’re going to look to reduce that down to 10% through the investment in this particular onboarding program. If you’re able to articulate in business terms to that C-suite, that’s when they start to make your points on their agenda more relevant. And it’s not just the thing that they feel they have to do.
All right, great. That’s fantastic. Mark, I could talk to you about this for like another hour and a half, I think. And I’m thinking about my dad and my journey. I’ve probably had seven times the amount of jobs that he has had in his career. So it’s it’s it’s just so quick in one generation, all of that has changed. It’s absolutely fascinating and definitely it’s going to stay that way. Right. I think the days of, you know, putting, you know, getting your gold watch after 30 years of service, that exactly is pretty much done. Well, Mark Probert from Bridge, thank you so much for the chat today. Really appreciate it. And to everyone else, thanks for joining us.
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