I’m back with our regular feature about the Return on Employee Investment (ROEI). Throughout the series I’ll speak directly to what ROEI is, how organizations can maximize it and how they can calculate it.
Each and every employee costs money. Organizations pay their employees’ wages and benefits. There is also infrastructure cost, including office space, tools and equipment, administration and other employee-related costs. Those are necessary costs, but are not always investments. An investment is a cost that creates future value and pays out over time. In other words, an investment in the workforce should help employees achieve their full potential, improve their motivation and strengthen engagement.
When a carpenter needs a saw, he has the option to purchase the cheapest one. Or he can achieve better results and get more years of use out of the saw if he invests in a more expensive, professional grade tool.
Similarly, the HR professional has his or her own ‘toolbox’ where it comes to optimizing the company’s workforce. Strategic investments in the organization and its employees can make a huge contribution to the bottom line. The right investments can both prevent unnecessary expenses, such as high employee turn-over, and boost the productivity and of workforce by better engaging the employees.
You know the saying, when you have a hammer, everything looks like a nail.
Are the tools you’ve invested in fit for the job at hand?