Overview: Nearly +£18 million with a 750-strong workforce.

Choosing a random number of 750 employees, which represents an average, decent-sized company:

  1. You hold onto an extra 48 people in an engaged and high-performing workforce with 750 employees compared with a low-performing one.

  2. Those 48 people alone make your company an extra £2,618,016 when engaged.

  3. Plus, if you prevent 48 people from leaving, it stands to reason that all 750 employees will have benefitted from your leadership efforts (not just the 48 people). Your company then stands to gain an incredible and an eye-watering £17,946,000 in extra money.

….not bad when you consider the money is there for the taking. All that stands in the way is a robust Leadership and Employee Engagement Programme.

WOW – talk about being surprised:

I was playing around with the internet and my calculator one sunny afternoon last week and I

I threw about some figures, based on some research I had been conducting and here are the results.

Albeit this isn’t a scientific experiment, even if I’m being cynical and my calculations are only half right, you still can’t avoid the fact that the numbers run into the millions.

On the one hand you save money by not losing talent.

On the other you gain from more employee engagement:

I calculated the actual physical saving of not losing talent in the first place plus the combined effect of the increase in their productivity / collaboration having stayed in the first place.

The combined results are literally astounding. Over £2.6 million.

If you’re a senior leader, these figures might make your skin have goosebumps with excitement of the potential.

How accurate is this blog?

The internet is awash with articles about Employee Engagement and the cost to business. So, I thought I’d have some fun and do a quick calculation based on figures I found online.

I’ve put all the names of the sources below so that you can see that they all come from respectable sources.

  • Christine Beodker et al. and the Australian Business School (University of South Wales).

  • Ideal.com drawing upon results from a survey conducted by DePaul University’s Sales Effectiveness Survey 2015-16.

  • Oxford Economics.

First, the cost savings:

Let’s start first of all with how much you save when you have fewer people leaving:

Our calculations show that you can save £1.5 million simply by engaging in some powerful leadership / employee engagement techniques (see bottom of this blog).

£1.5 million. Quite incredible!

Here is how we calculated it:

  • A report by Oxford Economics shows that on average, it costs £30,614 per employee to replace them (which includes the cost of lost-output during the training phase of a replacement plus the logistical cost of absorbing a new worker).

  • Let’s work with this figure however please do read on if you manage a sales force as the figure seems to be far higher:

    • One report by DePaul University’s Sales Effectiveness Survey 2015-16 puts the figure at $97,690 (£76,457) for a sales person.

    • To me, this does make sense. Lost performance for a sales person surely has a far greater financial impact on the bottom line?

  • According to Christine Beodker in her report on Leadership, Culture and Management Practises, it states that high-performing workplaces have a lower attrition rate of 23.3% compared with a low-performing workplace.

  • According to an infographic on the ideal.com website, again quoting a DePaul University Survey result, the average rate of attrition in a sales force is 28%.

So, out came the calculator:

  • 28% of 750 employees is 210 people that leave the business each year

  • Let’s take 210 as a number to work with.

  • This can be reduced by 23.3% in a high performing company. That’s 48 fewer people leaving each year.

  • 48 people multiplied by £30,614 = a saving of £1,469,472

£1.5 million. Unbelievable.

What if you employ more than 750 people?:

  • 7,500 employees. £14,694,720

  • 75,000 employees. £146,947,200

….I’ll stop here as the figures just get out of this world.

However, that’s only half the story.

That’s just the cost saved, but when these people stay, and if they have stayed it’s fair to assume that they are more engaged, then this means we will have 48 multiplied by the increase, per employee, of highly engaged people compared with disengaged people (which is £23,928).

  • Again, thanks to Christine Boedker’s study, from a sample of 5661 employees across 78 Australian Organisations, the profit margin difference between high-performing workforces and low-performing workforces is AUS$40,051 (£23,928) per employee.

Out came the calculator again……..

  • So, if those 48 people were to stay in the company thanks to your efforts as a leader, and their performance is also uplifted, then you have saved yourself £1,469,472 plus you have received an extra £1,148,544 in increased productivity.

  • Put those two figure together and that gives us our figure of £2,618,016

So, where did the £18 million come from?

  • Well, one overall figure that can’t be ignored, over and above else, is that if you apply Christine Boedker’s logic across all 750 employees:

    • 750 x £23,928 = £17,946,000

Even as a leadership and employee engagement coach, this figure blew me away.

So, how do you go about engaging your workforce?

For me, the easiest way to look at this is to consider two words:

  • Trust

  • Relationships

At the heart of these incredible figures above is a concerted effort to set about building trust, which has a knock-on effect on building relationships. For me, this is the way forward.

Colleagues who trust each other have stronger relationships. They then start to open up. They share ideas, concerns, new perspectives and start to collaborate more effectively. We then start to see the emergence of “A Learning Organisation”. This is where, as I see it, process should now kick in.

I’ve seen a lot of companies use process to try and control behaviour. Let me re-frame this and show you how I think it should work:

  • Set out to build trust and improve relationships

    • if process has to be used due to the size of the workforce then, by all means use it, but use process to promote relationship-building and not to control behaviour.

  • Then use processes, procedures and structure to facilitate the work of the employees.

    • Let these things be a by-product of the emerging culture, not the driver.

This is the fundamental difference, I feel, that separates a highly effective team from a low performing one.

  • Process and procedure, in simplistic terms, is the 2nd step in the equation. Not the first one as I see it.

    • Process doesn’t create a culture. Humans do, and this comes about through connections between people and betweens teams.

    • Once the culture is created, performance increases automatically. Processes and procedures simple make the workflow more fluid for the team and makes life easier for them.

So, for me, it’s all about focussing first of all on getting relationships working and then get those people to co-create with you the processes and procedures that will make their job easier and get everyone following a consistent path

What do we do and how can we help?

We’re specialists in Leadership, Change and Employee Engagement and use a number of tools and a heavy dose of behavioural psychology to achieve results for our clients ranging from live training, live events, corporate film, 1-2-1 and team coaching, motivational speaking, internal communications programmes, to name but a few.

My name is Nik Moore and I’m the MD. I’d love to connect with you to find out more about your business and tell you more about how we can get results which can transform your bottom line.

I’m a Live Event and Video Executive Producer as well as a trained Business Coach, Member of the Association for Coaching, a Language and Behaviour Profiling Practitioner, Multiple Brain Integration Technique Practitioner and Neuro-Linguistic Programming Practitioner.

Please feel free to contact me. I’d love to catch up.

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