The ROI of Investing in Employees

When an organization invests in their employees, it shows. As a talent management and training software company, we have virtually (pun intended) built an entire company on this premise. Investing in employees is always a smart business move. Employees are the backbone of the company’s success, why wouldn’t leadership pay into that? Well they might not know a few important things mentioned in this infographic our friends and Sage.

We gain great insight on the power of investing in your employees in, “Return on Employee Investment Explained.” As the driving force of any organization’s success, it’s no surprise that making investments in employees is necessary, but it might be surprising just how beneficial they can be to the entire organization, and how cost effective they can be.

We all know the importance of implementing a strategic approach to talent management for driving success, but the return on investment is probably more than you would expect. Companies that take a strategic approach to talent management see:

  • 40% lower turnover
  • 2X the revenue per employee
  • 38% higher engagement

There is a flip side to the equation. When employers fail to invest in employees, it can have a severe negative impact on the bottom line, workplace morale and the employer brand. Lack of investments in your workforce can end up costing much more than those investments would have. For instance:

  • The cost of replacing one employee can cost anywhere from 30-400% of their annual salary.
  • The cost of replacing one person making $17 per hour is $10,500.

We also learn just how affordable the investments that can combat the aforementioned costs can be.

  • Every $1 investment in employees can yield a $10 profit.

Strategic and effective talent management systems along with the right training software are two great ways to make a relevant investment in employees. When employees feel valued, it shows in their work, and transversely the success of the company. Investing in employees is also a great way to facilitate the creation of brand ambassadors. The benefits never end. Smart investments in employees will always yield great things for the organization. 

The Sourcing/Recruiting Mesh