The notion of Employee Lifetime Value (ELTV) provides organizations with a valuable tool to quantify the worth of intangible actions. ELTV can be described as a numerical evaluation of the enduring impact an employee has on an organization throughout their tenure with the company.
Unfortunately, a significant proportion of employees fail to provide commensurate value to the company in relation to their compensation. In business, payment is intended to reflect the value that employees contribute rather than simply compensating for their time or effort.
As long as employees are business assets, you expect that an investment in the asset has to bring value to your company.
If the asset produces only 1 - 2 times more money than you put into it, then it can be considered unprofitable.
Solution
Accelerate employee onboarding to boost workforce contribution.
Boost employee productivity for higher overall output.
Extend employee retention to maximize tenure with the company.
We at Talentgreatness help improve ELTV, which means we increase an employee's worth, to provide more financial value for their employer.
With our services, employees produce 4 or 5 times more money than you put into them.
Technologies
Talentgreatness digital HR technologies are a tool to support the entire process to make this happen.
There are three key areas that we focus on in order to improve the ELTV:
Hiring & Onboarding - Help to recruit the right employees and shorten the ramp-up time it takes to become a fully contributing member
Performance & Management - Increase the output of an employee (Employee Experience & Automation)
Development & Loyalty -Increase the amount of time someone stays with the company (Engagement & Culture)
Hiring
Aligning employees who are a good fit for your organization increases the likelihood of longer tenures, improved productivity, and enhanced performance. A well-executed talent acquisition and recruitment strategy involving a structured and data-driven approach to sourcing and interviewing results in higher initial productivity and can yield a significant increase of 67% in productivity and profit.
Onboarding
When an employee starts working at an organization, they cost money. How much money depends on your onboarding processes. As an employer, you have a significant impact on how long it takes before someone starts creating value; and this process starts even before they even walk through the door.
A well-established onboarding program allows employees to contribute much faster to an organization and also increases the likelihood of long-term retention.
A successful onboarding program leading to committed employees means they are nine times less likely to leave.
Employee experience
Manage the contributions of employees.
Process automation allows you to optimize employee performance for maximum results specifically.
Automating the administrative tasks needed to perform daily processes and saving employees time to focus on the essential things improve their experience and contribution to a company.
The learning & development
An optimized employee development program leads to long-term growth in an organization and increases the value of employees’ contributions. 80% of employees say that they would stay at an organization longer if the employer invested in their learning and development.
HOW IT WORKS
The graph above illustrates employee lifetime value by focusing on the life cycle. The X-axis represents time, spanning from the day that employees start to the day that they make the decision to leave. The Y axis represents employees' output.
At the start, employees are not yet contributing to the organization, but they still cost the organization money, which is reflected in the negative output displayed. As the employees are onboarded, they start moving towards ‘fully contributing members of the team and output increases. Over the life cycle, productivity continues to increase until, eventually, it plateaus. After an employee decides to leave an organization, their productivity typically starts to decline, gradually decreasing until their final day when productivity reaches zero.
Hiring & onboarding
Productive employees from day one.
With the Talentgreatness HRM system, you recruit more sophisticated candidates at the start. We help to discover candidates' skills beyond the CV so you discover qualified candidates in a short space of time.
In this graph, two characters will serve as an example. Mike, who had an exceptional onboarding experience with Talentgreatness HRM software, and Alex, who started his journey in the company without using any facilitating tools or programs. Mike participated in the pre-boarding program and got an introduction to the company culture, procedures, his teammates, and the way of working even before he began his first day of work. He received a personalized, tailored onboarding program; therefore, he started much faster contributing towards the organization.
On the other hand, when Alex started at his workplace, it was a complete mess. He did not have any facilitating tools to be productive in the first couple of months. He wandered around, struggling to navigate work procedures and company policies, which led to stress trying to figure out everything about how to do work properly.
Much worse, he was forced to distract other colleagues in order to find out how everything worked. Ultimately he was totally depleted at the end of the workdays.
As a result, Mike was able to perform and yield results much faster by 60% and outperform Alex.
Thus Mike was more motivated to work for a company and makes a more significant contribution.
Employee experience
Following the same example, Mike uses a fully automated HRM system daily to facilitate his workload. He receives ambiguous and instant information about all workflows and performance feedback.
On the other hand, Alex has a lackluster employee experience, with micro-managing leading to increased stress and burnout.
Development
The Talentgreatness HRM system assists Mike and his managers in identifying his personality potential, enabling him to engage in work that aligns with his unique traits. This alignment enhances his productivity, engagement, and loyalty to the company, as he is able to contribute in a manner that resonates with his natural inclinations and abilities.
Decision to leave
Reputation plays a critical role in attracting and retaining top talent these days. The Talentgreatness model ensures that ELTV never truly sits at zero after an employee has left.
Upon leaving the company, Mike maintained a positive outlook and recommended it as a favorable workplace to others. In contrast, Alex departed feeling overwhelmed, drained, and lacking motivation, resulting in a lack of recommendations for potential job seekers.
To sum up
Effective talent acquisition, onboarding, management, and development play a crucial role in enhancing employee lifetime value, ultimately benefiting the company's financial performance. Focusing on improvements in these fundamental areas can lead to a significant difference of up to 6x in ELTV for each employee, amplifying their value to the organization.
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