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  December 15, 2014  

Strategic HR Weekly "Sales" Tip #6

If you don't have a cost of problem, you don't have a problem!

That line above is so true in business to business sales, or if you have to "sell" something internally to the C-suite. If we can't attach a financial impact to an issue, it's hard to get any action on it. And in HR Employee Productivity is one of the toughest areas. It's hard to talk about in a convincingly business-like manner, but it's an area where SMBs leave a lot of money on the table.

So how can we heighten the importance of the issue in a CEO's eyes?

The picture above starts to address the cost by showing the "wasted wage dollars" of a company with a $1,500,000 labor cost and employees engaged at an estimated 75% Employee Productivity level. Whether it's 70% or 81% or 85% really doesn't make a huge difference. The reality of it is is that the employer is paying for 2080 hours of work per year, and only getting 1,560 hours (at 75%). So that's $375,000 of wasted wages.

In a 30 employee company (which is what this illustration is based on), a 2.5% increase in Employee Productivity is equal to the work they're getting now from 1 employee. And 1 employee (in this example) costs them $50,000! So they could either let someone go, or not need to hire a new person as the work level of their business increased. And why not drop those savings to the bottom line with the help of your HR services?


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

phone: 866-868-5885