5 ways to improve the Employee Lifetime Value of your team

Getting your people to stay longer, engage better, and contribute more

Almost every company is struggling to attract and retain the best people, according to researchers. Through our work with HR and business leaders designing high performance cultures, we know there are 5 key areas of focus which significantly increase employees’ contribution to your business.  

 In this article, I’ll outline what those are and how you can use them to get people to stay longer, be better engaged and contribute more. This adds considerable value to your business beyond the ROI you expect. 

Maximising Employee Lifetime Value

Maia Josebachvili describes all the ways colleagues’ interactions add up during their tenure with you as Employee Lifetime Value (ELV).  

 This way of thinking about all the added value people bring through interaction with customers, contributing ideas, and being part of the team as well as fulfilling their own role shows the importance of your Employee Value Proposition (EVP) – the promise of ‘give and get’ between employer and employee.  

 You want to maximise the positive contribution your employee makes for the duration of their employment and extend the amount of time they stay with you. 

 

What classic ELV looks like

 

In Josebachvili’s framework, we see the gap that exists before a new hire starts fully contributing, during the early stage of the classic employee life cycle. You’re not getting the full benefit of your people until they get to grips with everything, that’s when you see an upturn in their productivity. This is often followed by a plateau when they’re settled in, comfortable and know what they are doing. But after a while, they start thinking about their options, become demotivated, and then they leave.  

During the period between deciding to leave and leaving, an employee’s performance reduces dramatically. This is made worse if their exit is not managed well with a robust exit interview. You need to take the time to understand how their needs were not being met or what the real reasons for them leaving were. 

There should be a ‘revolving door’ approach now. For example, if there isn’t a more senior role for someone to move into, they may leave for a growth opportunity. If they leave now, you at least want them to consider coming back to the company for their next promotion. They have so much company knowledge and you thought they were great to hire in the first place so why not encourage them to come back? 

When you maximise ELV, you shorten the time it takes a new hire to start fully contributing – and extend the time they stay with you. You can get people contributing more swiftly through accelerated pre-boarding, onboarding, and induction. Now you have a lifecycle that looks like this: 

The ELV upside

 

It’s important to understand that there are always going to be natural dips in performance. Things happen in people’s lives, it’s inevitable, like having children or going through the menopause. If you support them through the dip, you will see their performance increase again.  

At some point an employee may decide to pursue other opportunities and you hope their performance doesn’t fall off a cliff so you can leave the door open for them to return in the future.  

That’s what you’re aiming for, so how can you make this happen? 

5 levers to increase ELV

At Culture Consultancy we work with organisations to create award-winning cultures, a large part of that is developing experience employees love so you can maximise your ELV. When you look at the employee lifecycle, there are easy quick wins that will help to increase ELV across the whole employee base, such as shortening the time to be fully contributing by using pre-boarding tools as well as accelerated onboarding and induction.  

Here are 5 levers you can pull:  

1. Know your population

Constantly listening and gathering feedback at all stages of the lifecycle, right from pre-hire through to exit is vital. What do candidates think? What was the interview experience like? Why did candidates turn down offers? All of this will help improve what you do to generally improve ELV. 

 The real key though is to understand your population in as much detail as possible so as to adapt the support you give, and the motivation tools you use. You want them to be happier, stay longer, be more creative and contribute more. 

 Gathering this insight is part of the Discovery process we undertake when we start putting together an EVP. 

2. Understand people’s motivation

You can’t assume everyone in your company is motivated the same way though. For example, there is a shift in what people are looking for from work as they get older.

 

 

This is where personas come in. We build persona profiles of employees based on different criteria. You could build personas by age or stage of life such as, new parent, carer, returning from leave, going through IVF, menopause etc. as these might prompt different support mechanisms from their manager or the company. 

Alternatively, you could build the personas based on where people are on their employee journey. For example: graduate recruit, 2nd jobber, newly promoted manager, aspiring leader or approaching retirement. The end of their employee lifecycle is a good time for them to coach and mentor juniors or pass on key company knowledge, so it isn’t lost. This extends the benefit you get from their contribution as people don’t have to learn things afresh or end up in the weeds unnecessarily. 

Sometimes it also pays to understand the career aspirations of employees. Are they a highflyer, or solid and steady? 

3. Support your employees’ growth

As I mentioned, people’s experiences and expectations throughout their time with your organisation will change and you need to support them. A key part of this is identifying opportunities for employee growth.  

Employee growth isn’t always about promotions. These aren’t always possible in companies with lower employee numbers. 

A simple way to think about the growth is: what could the employee learn or do that would benefit the company and increase their market value? Even if an employee doesn’t want to leave, they want to know that they are growing and learning enough that if they did leave, they have extra skills and experience that would get them a better or higher paid job in the market.

This can look like stretch assignments, internal secondments, shadow board positions, being invited on to external or internal committees – alongside the more typical manager and leadership development. 

4. Managing performance is better than being ‘nice’

The desperate need to attract and retain talent can lead to an unintended consequence: a reluctance to give constructive and candid feedback for fear of people leaving. This can lead to managers trying to be ‘nice’ which in turn can be quite passive aggressive and eventually toxic. Employees want feedback on their own performance and want their colleagues to be called out on any poor behaviour. 

48% of UK employees have seen their manager allow others to get away with bad behaviour, according to the Global Culture Research Report 2022. Not giving feedback on positive and negative performance is damaging to your culture, your people and will not encourage them to stay/be productive. 

Rather than be nice, it’s better to be kind. Kindness is about giving people the help and support they need. Concrete help is clarity on goals, objectives and behaviours, direct communication and active listening. 

5. Ask if your people managers are equipped with the right skills

One of the greatest needs we’ve seen over the last few years, is for managers to be more effective than ever before. Hybrid and remote working, managing 5 generations in the workplace, the increasing pace of change, and a tough economic outlook all make management skills even more important for retaining your talent. 

 

 

The typical skills managers need: 

  • Excellent communication skills in everything from 1-2-1 to all team meetings.  
  • Managing performance 
  • Setting clear expectations and delivering feedback 
  • Gravitas & managing upwards 
  • Creating an inclusive and psychologically safe environment. 

 

 There’s also a training piece there on how to understand your people, their strengths, what they bring to the team, and their personalities. In addition, managers need help to delegate and build their own personal resilience.  

A quick note about Culture Consultancy...

You guessed it, we are a culture consultancy… We help clients create award-winning, high-performing workplace cultures. If you need help with a culture challenge get in touch!

Back to the blog…

Creating your Employee Value Proposition (EVP)

EVPs weren’t really a topic until about 3 years ago. Your Employee Value Proposition is the promise of give and get between the employer and the employee. It’s you saying, we’re going to give you all these benefits, this pay and reward, it’s going to be a challenging environment, and you’re going to knuckle down, work hard, and perform well. 

It’s partly about your culture, it’s partly about the employee experience that you want to offer as an employer, it’s partly about compensation and benefits, it’s partly about employer brand reputation and it overlaps a lot with internal comms. So, if you’re sitting in the HR team, I would advise you to pull in a few colleagues to work on this with you because I think it sits in more than one team. 

What you need to avoid is painting a picture that makes them think they are going to get one thing, and then when they start the job they say, this isn’t what you told me it was. 

This is why it is important to be clear on your 5 focus areas, so you know how you are developing people, what your culture is, what support you have in place, how you measure productivity, and that your managers have the skills they need to lead their teams well. You’ll be secure on all these elements and you’re able to be transparent and honest about what people coming into your organisation can expect.  

Who are you trying to attract?

When you’re putting your EVP together, you want employee-specific design principles in place. For example, you could split people by life situation. 

You will have different people in your organisation. Some might be hungry high performers who are going for rapid career growth, others are strong contributors who are going to do a steady job for you every day, but they don’t want that fast tracking.  

They are all part of your team but the messaging, training, and to a certain extent, the pay you give them will be different.  

You need to identify these personas both for the people you already have and for the skills and attributes you want to attract.  

How to get started with your EVP 

Look at any employee survey data you have got. Exit interviews will enable you to build a picture of why people are leaving. You can do a quick calculation of how long people are staying from recruitment data. See if you can spot any patterns.  

 Then follow these four steps: 

  1. Have a clear business strategy and clearly defined culture and values 
  2. Define your EVP design principles to run through everything employee related 
  3. Identify current and future personas 
  4. Create your detailed proposition 

Make your EVP unique but also go beyond the obvious. There are things you can do that go beyond what’s usually on offer and don’t cost a lot of money. For example, one company had bereavement leave available if a pet died. This meant a lot to their employees. What can you do that resonates with your people, something quirky? 

 You need a red thread running through your HR, internal comms and your marketing so you are consistent. Refer back to your EVP when you are creating your messaging. 

About Culture Consultancy

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