Employee Communications

7 Easy Ways to Maximize Employee Lifetime Value

Picture of Sociabble By   Sociabble  

Employee Lifetime Value doesn’t get as much ink as Customer Lifetime Value, but it should. It’s just as important. But how can an employer maximize it while keeping employees engaged? We’ll give you 7 simple solutions.

For years, people in the business community have discussed the importance of Customer Lifetime Value. That is to say, ways of enhancing and increasing the value of any given customer to the brand. However, one similar concept that is often overlooked—and that has slowly begun to receive more attention—is Employee Lifetime Value. Here, we’ll explain what Employee Lifetime Value is, and discuss simple ways any employer can increase it among their workforce.

In this article, you will learn:

1. What is Employee Lifetime Value and why is it so critical?

2. How does Employee Lifetime Value work?

3. The Employee Lifecycle

4. Raising the bar on workplace culture

5. How to maximize Employee Lifetime Value

6. How to download Sociabble’s white paper to learn more

 

1. What is Employee Lifetime Value and why is it so critical?

At its heart, ELTV (Employee Lifetime Value) is basically a new way of looking at what employees can bring to an organization, and vice versa. That’s right, it’s a new way of thinking about how you value your employees, and what they can add to your company. But rather than a metric that looks at the profits generated over a customer’s lifecycle along the lines of CLTV (Customer Lifetime Value), ELTV looks at the value your actual workforce can contribute—which is essential at a company looking to engage in rapid growth.

And the premise of this brilliant theory, first proposed by Maia Josebachvili while working as VP of Marketing at Greenhouse, is that it pays to invest time and capital in hiring the best talent at the start. Because that investment will pay off over time. Adding in a little extra upfront will yield dividends in the long run.

 

2. How does Employee Lifetime Value work?

The graph below gives an idea of the fundamental theory behind ELTV. Case in point: investing in an efficient and effective recruiting and onboarding process right from the beginning will help an employee to create positive value for the company earlier as well, not to mention attract other top talent from their network. That early investment in the employee is an example of how ELTV can be maximized. Investing resources in the finding and recruitment of top talent, coupled with the initial training and inclusion of that talent, will help to add employees who contribute significant value over time.

 

Employee life time value

3. The Employee Lifecycle

When it comes to maximizing Employee Lifetime Value, it’s critical to understand the larger Employee Lifecycle as a general pattern that most members of your workforce will experience. At the very beginning and very end of an employee’s tenure at a company, their net value will be lower—initially, because they’re just starting out and have yet to be trained, and at the end, because they’ve reached their decision to leave and are toning down their activities and involvement. The maximum potential is reached at the interval spanning those two points—and extending that plateau and minimizing the low-value portions before and after it will ensure that you’re maximizing the ELTV.

 

4. Raising the bar on company culture

In this second graph, Maia emphasizes that if an organization seeks to optimize their employees’ full potential, they need to start focusing on maximizing the ELTV by making the shaded area taller and broader, as shown in strategic “People Practices” to increase the ELTV right from the beginning, i.e. via an effective recruitment process and a well-designed onboarding program. It may increase employee retention by as much as 82% and productivity by 70%. Not only will employees start creating value for the company earlier, but as previously stated, they may also attract other great performers from their networks. The next phases to further add significantly more value include developing a strong, positive company culture, instituting constructive management practices, and creating a rapid development plan.

 

ELTV

5. How to maximize Employee Lifetime Value

Now that we’ve established what ELTV is, it’s time for the next question: what’s the secret to increasing the lifetime value as much as possible for every employee, to ensure that they’re happy and productive and that the company is as well?

Well, there isn’t just one secret. However, there are simple steps you can take to help that maximization take place. And most have to do with investing in and recognizing the value that employees inherently bring to the company.

They include:

#1. Help them hit the ground running. Starting at onboarding, keep them aligned with values and culture. This is an especially crucial step, because it sets the stage for everything else to come. The initial investment in proper training, guidance, and integration will be well worth the advantages it provides. Introduce the company mission and overall strategy, as this is the foundation upon which all other aspects of being an employee are built.

#2. Help them become part of the team. Break down the silos and create a collaborative environment. By transcending barriers between offices, regions, and departments, you create a common identity and sense of purpose. Must-read company-wide news channels, real-time language translation, live virtual events that the entire company can attend—these can all help to keep silos from forming.

#3. Help them stay in the loop. Keep them informed and updated about new projects, internal changes, small achievements, and critical news via newsletters. A well-designed newsletter engine can make generating newsletters simple and easy, putting the power to create and send them in the hands of your own admins. Monitoring data on the newsletters, like open rates and reading stats, will help you to determine what content generates the most engagement.

#4. Help them be engaged. Don’t just inform them but engage them in your activities, like promoting campaigns, jobs, etc. An effective Employee Advocacy program can add an entirely new dimension to your communication and create a mutually beneficial relationship in which employees share company content, while also enhancing their own online profiles.

#5. Help them grow. Educate them, launch e-learning initiatives, quizzes, and other educational tools. Communicate clearly when it comes to opportunities for growth and promotion, and when employees express an interest, encourage them and provide the resources they need. This can extend beyond the company as well—encouraging employees to pursue personal interests and passions will strengthen their commitment and engagement at the workplace.

#6. Help them be heard. Give them a voice, so they can share freely, and show you value their input by asking for their feedback and opinions via polls & surveys. Make sure that the results of polls and surveys are analyzed and put into action. If employees have concerns or suggestions, address them. Make it clear that you are listening and taking steps to optimize the employee experience.

#7. Help them feel appreciated. Show recognition with kudos, badges, rewards, all of which are a great way to increase morale, collaboration, and job satisfaction. And most importantly, make this recognition public, so other employees can see the benefits of a job well done. Rewards can be tangible prizes, but consider adding a CSR element, as employees are often looking for opportunities to give back to good causes.

Maximize Employee life time value
Employee life time value and recognition
The Sociabble platform comes with a built-in peer-to-peer praise feature that allows employees to give each other kudos and feel good about a job well done.

 

6. Download Sociabble’s white paper to learn more

In an increasingly competitive and fluid job landscape, successful organizations are able to attract and retain their best employees—and the creation of value it encourages goes both ways, boosting value for the employees and the organization alike. The points covered in this article are just a glimpse of the full potential that boosting Employee Lifetime Value at your company can bring. The right tools, proven strategies, and continuous improvement can unleash tremendous performance when applied to your workforce.

In our latest guide, The Secret of Hypergrowth Champions, we cover all this and more, including detailed use cases and issues that need to be addressed by any organization that is growing at a fast pace.

You can click here to download the white paper for free.

 

Employee life time value

 

And here if you’d like to receive a customized demo of the Sociabble Employee Communication platform.

 

 

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