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04/22/2019

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Interesting and timely relevance tangential to the concepts of product and brand loyalty and the intangible value of goodwill.

Coincidentally, since I'm writing a series of internal articles in an effort to increase employee participation in our defined contribution plan, I got to thinking more about this cost/asset equation question. While I agree about the need to better quantify the full spectrum of employee costs, the part that looked like it was missing, was quantifying the asset "value".

I think we've got a problem if we're unable to better quantify the added-value an asset contributes. We can do that pretty well for a rail car full of coal or an automated machine that makes waffle cones - but not quite as well for an employee. The machine will eventually depreciate in value, but the employee should continue to appreciate in value (well, theoretically).

I have a good (and bad) feeling that ability to better "value" employees is coming, probably in another 3-5 years.

A true "classic" Classic. I'd like to offer three points:

First, regarding "people are our most important asset!" Someone once told me that if you want to put that chestnut to the test, look at who the company has in its HR team. If people are truly an organization's most important asset, then it should have some of it's best people in HR. Present company excluded, how often do we see that borne out?

Second, we talk about the cost of attrition, but do we understand the real cost of retention any better? We know, intuitively, that it can cost you more to retain an awful hire than to prematurely lose a great hire. But, the cost of that retention is harder to quantify. And, if your retention is too high in a field or occupation that is rapidly evolving, what is the cost of losing out on the influx of new ideas, new innovations, or new ways of working? Or what if you need to overhaul the organizational culture? How much does retention cost then?

Third, if we look at the Cost-to-Value chart, wouldn't that suggest that we should view onboarding as an investment that should be used to minimize time-to-engagement? Yet, don't we see too often that onboarding is little more than an enervating parade of paperwork and poor presentations?

Just food for thought while we wait for Chris's employee value decoder to arrive!

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