Look you know investing in people is important. It’s obvious isn’t it?
But you need to persuade someone that it actually makes good financial sense.
This might help.
Here are the numbers and the research to back it up.
Ok lets accept you should invest in people BECAUSE….
People get better at their job if they are trained to do their job.
Skills, capability and productivity flow from that.
Read this article if you don’t believe me.
That’s Harvard. They’re a bunch of big brains.
They’re telling you to invest time, money and resources into your people.
I know, you might say, I would love to but we simply don’t have the budget.
Ok, let’s start again.
Let’s accept you should invest in people BECAUSE….
People get better at their job if they are trained to do their job.
Skills, capability and productivity flow from that.
Read this article if you don’t believe me.
Isn't that enough?
I know, I know but have you got the productivity thing?
That saves money.
Now look at this research
So now we know that average staff turnover is 15%.
Another useful information point is that McKinsey say 40% of staff are considering leaving in the next 6 months. I’ve seen in other places its even higher than that.
Don’t delude yourself.
Similar patterns are playing out within your team and it will cost you money.
Here are the numbers:
- Let’s say you have 20 staff with an average pay of £30k pa
- Based on the above you will probably lose 3 staff per year.
- The cost of replacing those staff believe it or not is £100k.
More big brains have been working on that. Oxford University that’s who.
So right now you are leaking £100k pa. Can you afford that?
What if you did this?
- Offer £2k to each member of your team for professional development.
- Ask them to discuss with you what that development is in terms of their career but maybe you can be more expansive. Maybe there is something vocational they could do. Have the conversation and make the offer.
- Maybe tie them into a deal which says if they do leave they have to repay an amount say 50%. I wouldn’t do it but if you’re that worried about losing your investment it might be worth a discussion.
- That will cost you with your 20 staff £40k.
My guess is that you will reduce your staff turnover.
In this case let’s say you reduce staff turnover by 1.
You save £30k.
This means that your team, as a whole, is more productive.
At a cost of £10k.
£10k.
Is that a good ROI?
