Measuring the Unmeasurable: The True Value of Your People
How to connect people spend to business outcomes and your bottom line
Stop me if you’ve heard this one before: A company starts growing. Fast. Resources are stretched to the breaking point. The keepers of the company’s coin decide all those resources need to go into growing the company’s top line, while simultaneously shrinking the bottom line. Talent development? Gone. Training programs? Gone. Diversity and inclusion? Later.
But soon enough, the company has a problem beyond just “stretched resources.” Employees are leaving. Fast. The company has to hire to expand and replace all the talent that’s fleeing. Those who do stay are disengaged. Productivity begins to crater. Glassdoor reviews turn decidedly negative.
Executives are left scratching their heads. Their Human Resources people know what the problem is: ineffective people spend. But they have no way to show what the positive return is for different kinds of people spend.
And so the cycle continues. No wonder the length of employment at tech companies like Facebook and Tesla is less than 2.5 years. No wonder 66% of employees in America are not engaged with or completely disengaged from their work. It’s bad enough when critical talent leaves, killing the innovation and creative momentum at a company; but it’s apathy that’s really the silent killer of a business.
Speaking the Language of Results
If you’re envisioning a terrifying tableau of living dead slowly typing at their workstations, good.
This is what I and my colleague Tammy Sanders have been seeing, over and over again, in our work. Our V/G ethos has always been about looking at talent holistically — not just putting good candidates in front of a hiring manager, but managing the entire lifecycle of the employee.
Yet, when we talk about talent design with our human resources partners, we’re constantly met with the same lament: “We don’t know how to show the value of this to our CFO.” “Our CEO needs to see financial results.”
What’s happening here is that HR has been trained to speak the language of human capital. The decision-makers at the company are speaking the language of financial capital.
What our human resources partners need is a translator, because effective people spend does produce immediate financial results. As just one example, Tammy loves to tell the story of a company that was saved $2 million in legal fees because of a single manager who remembered a lesson learned during a 3-day development initiative for new managers.
There’s just no way to effectively capture that return on investment, no official way to connect those two events of “training module attendance” and “saving $2 million in legal fees.” Well, there wasn’t. We’re now working on that solution at V/G.
We Call It Equilibrium
There are a couple of different ways to explain Equilibrium. If you live in a consumer-oriented world, I like to compare it to Mint, the personal finance app that shows you exactly what you’re spending in certain categories every month, and helps you budget. If you’re more business-focused, think about Marketo. It’s the marketing automation software that helps CMOs and their teams make informed decisions about their marketing spend.
Both platforms are about visibility and accountability: visibility and accountability for every dollar spent. That’s what Equilibrium will do for people spend. We’ll take data from human resources partners and translate that to monetary spend and business results. The goal is for people both inside and outside the company — CEOs, prospective employees, and investors alike — to have this transparency.
We’re not the only ones who are interested in this kind of visibility and accountability: Recently, the SEC approved the disclosure of human capital metrics for selected public companies, and a new ISO standard just published provides globally agreed ways of doing just that.
We’re still building and testing Equilibrium, and we want to do it with you. We’re looking for partners to help us bridge that gap between human capital and financial capital — partners who will do a people spend audit with us that will help us refine the equations that connect people spend and business outcomes.
We’ve spoken with plenty of Chief Human Resource Officers who protest that making this connection is simply too complex for them to manage alone. It’s true that this is not an easy process.
But it’s not impossible, and the cost of ineffective people spend cannot be ignored. It’s time for a solution — Equilibrium.
Are you ready to join our mission for good people spend? Yes, I’m ready.
V/G is a strategic talent search & development consultancy partnering with the world’s most renowned technology companies to help them find, retain and cultivate top talent in tech.
