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The ROI of Employees

Why employ people if you're not measuring their impact?

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The ROI of Employees
[ Business]

Over at his blog yesterday, Chris Brogan wrote about his admiration for Gary Vaynerchuk. The post sparked quite the discussion in the comments, a lot of it about ROI (return on investment).

This stemmed from a quip Gary had made to an event attendee who was asking a few times about the ROI of social media, to which Gary replied, “What’s the ROI of your mother?”

A throwaway quip, but one I thought was indicative of why so many people are confused (or afraid) when it comes to using social media for business. I said as much in the comments, and Chris Theisen raised an interesting point with his question: “Do companies actually measure whether each employee has a positive ROI on the company?”.

If they don’t, then they should.

What’s the point in running a business and employing the folks you need if you’re not measuring their impact? Questions you should be asking (and measuring) include:

  • Does John the sales guy bring in enough sales to cover his costs? Great, he may be bringing in $100,000 worth of sales, but if they’re to 100 different customers and I need to hire more customer service advisors to handle their queries, John’s value immediately diminishes.
  • Does Karen the customer service advisor upset my customers? She may be awesome in the office, but if she’s caused 10 customers to leave in the space of twelve months, and they each spend $5,000 per year, her salary of $30,000 per year is now actually $80,000 per year.
  • Does Peter the marketing guy piss off fellow team members and lower their morale because he thinks he’s “all that”? If so, does that stop them doing their job properly and cost me sales, or quality service for my customers? Does it make my employees want to leave, costing me more money to train new hires (not to mention losing the team spirit that had been fostered before Peter’s arrival)?

These are just three examples of where you could start looking, and measuring the impact each employee has on your business. There are many more, and some that are unique to individual businesses and industries – but they’re good starter points, and a pointer for a full organizational development analysis. This can then tell you how to make sure your employees feel as valued by you as they are valuable to you.

If you’re not already measuring the ROI of your employees, then are you really measuring the success of your business?

image: TruthOut.org

Originally published at dannybrown

The ROI of Employees
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