Stop paying lip service to your “most important asset”

What’s your EBITDA? What are your retained earnings? What’s your customer sat rating? How many deals do you have in the sales pipeline? What’s your employee engagement rating? How much did your bad hires cost you last year?

Huh?

Almost every business owner knows the answers to the first questions, but no one can answer the last ones. Why?  Because most businesses don’t measure their people as tightly to their bottom line as they do every other function of their business. You can tell this by just looking at an organization chart. How many businesses have a CFO, CMO, COO, and also have a Chief People Officer or Chief HR Officer? Once finance and accounting have a seat at the table, a CHRO should also have a seat.

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I talk with dozens of companies every month about their people, and I am deeply disturbed by how few of them are clued into the truth around their “most important asset”.  If you create a deliberate culture around the team that you build, it will no doubt result in a company that is performing better. We all know this — almost every major leader of a successful organization will say this, but most of this is just talk. Very few organizations are truly measuring the performance of their people and then investing in them.

Let me give it to you straight — if you are not investing in your culture, your employees are costing you  about 25 percent more than they should.  Countless experts (and my own personal experience) tell me that one-fourth of the time, your employees are wasting time because they were never a fit and should have never been hired, they are mismanaged, don’t know the goal, or experience unnecessary conflict.

People hate their jobs. They hate their bosses, dread Monday mornings, and most likely are only your employee because they haven’t found another job. Is this what you want?

I’m fired up about this because there are so many easy things that you can do to improve your bottom line by investing in your people.  The No. 1 reason that people hate their jobs is because they don’t feel cared for by their manager and company. This is purely a management issue that can be fixed with well-trained managers. Yet, how many of you are investing in training your managers to be the best boss they can be?

Have you really analyzed how much it costs you to lose an employee? Every time someone leaves your organization, you should be asking “What could we have done differently?” About 90 percent of the time, the loss was because you didn’t do a good job hiring or onboarding. Rarely is it the employee’s fault. Yet, how many of you are actually treating recruiting as a business function? My experience has been that it is mostly a fire drill that you run when there’s an emergency.  This is expensive and doesn’t result in a good hire.

When was the last time you did a health check on your employees? How do you know how they feel about working for your organization? Are you listening to their concerns and taking action on them?

I know many of you, and I know that you’re a good person who’s trying like crazy to be the best you can be, but honestly, if you’re not measuring turnover and engagement as closely as you’re managing EBITDA, sales pipelines, and customer satisfaction, your organization is failing.

If you’re serious about this asset, hire a Chief HR Officer and hold him or her accountable for the people.   The job will be to think about how to get more from the existing team, invest in training your managers, put a recruiting process in place to hire slow to go fast, and will keep a constant pulse on the health of your culture.

It will be well worth the investment.  You’ll see it hit the bottom line.

Kendra Prospero is the CEO and founder of Turning the Corner, a Boulder-based organization that does recruiting the way it should be done for job seekers and companies.