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  April 13, 2015  
 

Strategic HR Weekly "Sales" Tip #20

Business Acumen...

Often, how we say things to another party will have a dramatic impact on whether the point we're trying to make is accepted by them or not. (and whether you're viewed as just a vendor, or trusted advisor business consultant)

An HR consultant told me the other day that her boss - the owner of the HR firm - tells prospective clients "We're going to save you money by increasing your profitability." I really had to scratch my head when I heard that. You don't "save" money by increasing profitability; you increase profitability by saving money (assuming you can legitimately lower a business's expenses). So the original sentence is bass-akwards, compared to how most business people would expect to hear it. And if you say something weird like that to the C-suite, prepared to get grilled on it.

If this person wasn't in a position to save a prospective client money immediately with the suggested HR service deliverables, and what she really meant was, "We're going to "get" you more money by increasing profitability.", she'd also obviously need to be prepared for the "How are you going to increase my profits?" question. And she'd have to be able to put some meat on that bone to be credible.

Another example - Turnover. How often have you heard the sentence "Turnover costs your company $xxxx dollars per year." I just had a CPA recently say to me, "How's that "high" cost of turnover determined? Phhh!! That's all just black magic." What he meant by that - typical CPA mentality - is that if you don't write a check for it, it's not a "cost". While that's a bean counter's mindset, it's very short-sighted because it misses the point of other profit impacts.

A business hires an employee with the expectation that what that employee brings to the table, when financially quantified, is going to be greater than the expense of the person. It's ROI on wages; and ROI on wages is driven by optimizing Employee Productivity; and Turnover is a HUGE drain on Employee Productivity.

So next time you're conveying the financial impact of Turnover to the C-suite, maybe try, "Turnover has a negative financial impact on your profits of about $xxxx dollars per year." Phrased this way, in the subsequent conversation you can not only capture the actual hard checks that are written, triggered by a turnover event, but also the loss of upside profits (higher ROI on wages, no loss of customers, etc) due to poor retention.

Need a great tool for illustrating the comprehensive financial impact of Turnover in companies? Check out / click on the option above.

Cheers!


Rob Blunt       View our profile on LinkedIn
President, 4-Profit-HR

phone: 866-868-5885