People make all of those things happen. Companies are accustomed to paying competitive wages and good benefits to attract talented managers and professionals. Yet, many managers pay little attention to creating the best circumstances for individuals in a company to work to their potential.
All employees cost money. Organizations pay their employees with wages and benefits. There are also infrastructure costs, including office space, tools and equipment, administration, and other employee related expenses. Those are necessary costs but are not always investments.
An investment is an expenditure in money, time, or effort that achieves a worthwhile result or increased value in the future.
In terms of employees, an investment in the workforce should help employees to achieve their full potential, improve their motivation, and strengthen engagement, all of which will help an organization reach its goals. Companies that take a strategic HR approach to talent management see 40% lower employee turnover, twice the revenue per employee and 38% higher employee engagement.
Created by HR professionals for HR professionals, Sage HRMS provides all the essentials you need for hiring and managing your employees.
The effectiveness of HR software is regularly assessed in an isolated manner. A HRMS is judged by how much more efficient the HR worker becomes and how the software helps the HR department accomplishes daily tasks.
The Return on Investment (ROI) is measured as a result of the total costs saved or efficiency gained, divided by the Total Cost of Ownership (TCO).
But this approach is old fashioned and doesn’t do justice to the real value that modern human resource management brings to finding and retaining talented employees. From recruiting to onboarding, from motivating and developing talent to supporting people managers and creating an engaged workforce, the effectiveness of employee management has a direct impact on business results and competitiveness.
The cost of employee management technology is actually an investment in employees. These investments will reward the company with a return that will impress any CFO.
Employee engagement is a blend of job satisfaction, organizational commitment, job involvement, and feelings of empowerment. Engaged employees identify with and are committed to the goals and values of their organizations.
Organizations that can establish trust between the workforce and management, and between co-workers, can create an engaged workforce and the benefits that go along with it.
For organizations, the difference between engaged and disengaged workers can equate to success or failure. Disengaged employees are estimated to cost the U.S. economy as much as $350 billion per year in lost productivity, accidents, theft, and turnover.
A major opportunity for corporate performance improvement and employee retention lies in engaging the workforce to drive better customer engagement, better revenue, and higher profits. Engaged employees take fewer sick days, deliver increased productivity, are more likely to stay in their jobs, have a greater understanding of their customers’ needs, and are more likely to recommend their company and its products to other people.
Therefore, increased employee engagement results in a higher level of customer service, which leads to increased customer loyalty. All these factor into increased revenue and greater profitability. Investing in employee engagement increases workforce retention and thus decreases employee turnover costs. But the advantages of engaged employees goes far beyond the reduction of the turnover rate.
Increasing employee engagement correlates directly with a positive impact on key business metrics, which gives you better return on your investment in each employee.