Boost Employee Lifetime Value (ELTV) & ROI with Rewards
This article looks at how you can optimize the various stages of your employee lifecycle. Employee recognition is worth nothing on paper, but is an important asset when it comes to employee development and lifetime value - not to mention how high the ROI can be when there's such a low initial investment.
Attraction & Recruitment Stage
No, you’re not expected to reward people that don’t work for you yet. Unless they’re customers. However, that doesn’t mean that your employee recognition and rewards program doesn’t have an impact on this stage. Having some nice perks for your existing employees is a great way to attract top talent.
The power of an employee recognition and rewards program is immeasurable. Without even rewarding, you can increase interest in your company as an employer by as much as 170% when you regularly reward and recognize your employees.
How? Think of any family or friends you have that work for top employers - the likes of Apple & Nike. Do they ever fail to mention it? Didn’t think so. This affects potential employees, and it gives your company easier access to a higher caliber of talent without any extra direct expenditure.
Training & Development Stage
Okay, now they’re on board - time to get to work. This is the first stage in which you can use your employee perks program directly on your new hires, and potentially to the greatest effect. This stage is all about your employees' learning & development, furnishing them with the knowledge and resources to do their job as effectively as possible.
Post recruitment, the most important thing is the onboarding program - this either sets you up for success or failure. More importantly, it can make or break your ROI and employee lifetime value. Motivate employees within the training and development stages with rewards, gamification, recognition & more.
The key to making your recruitment, onboarding & training stage as fruitful as possible for both you and your employee is to maximize engagement. What does that mean for an employee recognition or rewards program? Healthy competition. Healthy competition generally leads to higher results for everyone than if there were no competition, which translates to higher employee output in the long run.
Gamification can make a huge difference to the engagement levels of your employees within the training and development stages. Think about setting badges or rewards for certain achievements, high scores for training activities, and points leaderboards for your top employees - simple things can go a long way when they trigger the child inside of us.
Add Value & Avoid Problems Stage
Adding value works both ways here - on one hand, you’re adding value to the working environment for your employees. On the other hand, you're adding value to your employees to achieve your business objectives. Most importantly though, you’re ensuring that both you and your employees get the most out of their tenure at your company - you don’t want to spend that time and resources for nothing.
Don’t think it’s plain sailing just because you’ve gotten this far. Maintaining a loyal and motivated employee base can only come from people leaders and consistent investment in people. Taking your foot off the pedal at this stage and failing to reward or recognize your employees can result in them leaving - putting your effort and expense in training them to waste.
Within this stage, connection is key. You should focus on providing as positive of an experience as you can for your employee, while still ensuring that they’re as productive as their potential allows.
You can recognize, reward, train, develop, even give hugs and kisses - but if you have a poor work environment and culture, people won’t stay. In this stage, it’s all about fostering a culture that’s conducive to a happy and productive workforce, and subsequently rewarding based on the values of this culture. Why? This will have a positive impact on your culture, add purpose to the work of your employees, and ultimately lead to a greater level of connection and engagement among your employees.
It’s results time. This stage will see you either sink or swim, stand tall, or crumble. Why? While you can observe employee behavior, many unhappy employees are not particularly forthcoming with their issues. Once they’ve reached this point in their employee lifecycle, the wheels are starting to fall off the bus if they haven't been trained, developed, or treated properly.
If you manage to successfully implement employee recognition and rewards, this is where you can enjoy the fruits of your labor. You’ve engaged your employee during training, connected them to your culture, and rewarded and recognized them on a personal basis. Safe to say that they’ll be staying put - or that it wasn’t because of you if they don’t.
Due to the increased employee engagement during training and their connection to your company's culture and values, your employees are likely to be engaged, motivated, and so will stay with the company for you to enjoy a maximal return on your investment in them and their development.
Remember, though - don’t take your foot off the gas. Employees won’t be slow to realize that they’re not receiving as many rewards as before.
The ROI Stage
Time to sit back and relax (kind of). With employee recognition and rewards, your work is never done. However, when your employees are at this stage of their lifecycle, all the “heavy lifting” is done per se. Your employees are well trained, work harmoniously with other employees, are integrated and invested in your culture, and are both motivated & fully contributing to the business goals.
What more can you do? Keep it up. The alternative scenario in this stage of the employee lifecycle is ugly exit interviews and frantic searches for replacement employees. As soon as you take your foot off the proverbial pedal, you’ll notice your employees noticing - trust us.
This is a position that very few employers can achieve. In today’s ultra-competitive employment market, as much as a third of employees are thinking of leaving their job within the next year. A whole third of employers can’t be that bad, can they? Luckily, they’re not. The reality is that most employers offer so many benefits, perks, and cushy conditions that workers are now in a position whereby they’ll simply leave if they’re not having these things offered to them. You have to compete with that. How? With a structured employee reward and recognition program, custom built to be perfectly on-brand for your company and goals. Sound interesting?
If you reach this stage, it's already too late. After failing to give employees the rewards or recognition they deserve and seek, they’re now leaving you. Within the training and acquisition phase, rewards and recognition were not employed in a way that enabled employees to maximize their potential.
Following this, there was a lack of employee recognition and rewards in the subsequent phases. This resulted in your employee being disengaged, not connected with the culture, not taking ownership of their work, and merely seeing their employment as a means to an end. Employee lifetime value is subsequently lower for two reasons. The first reason is simply that employees’ tenure is shorter, while the second is equally as simple: their value is lower. Why? Disengagement, a lack of ownership, lower than potential productivity, and a lack of connection to the organizational culture.
Within this phase, the employee's output is negative, virtually. They're not fulfilling their potential, are demotivated, and are not motivated to work towards your business goals. This is understandable. The goal is to give employees an incentive to work for certain business outcomes. Whether this is through getting employees to buy into your company mission and vision, or simply gearing rewards towards more concrete goals like sales targets, you should be using both recognition and rewards to get the most out of your employees.
There should be a clear message here. Employee recognition and rewards aren’t for exceptional circumstances, they’re not something that should be made an event. Employee recognition and rewards should be a central part of your employees' experience. Moreover, a lack of structured employee recognition is not just a sign of lacking due diligence, but a threat to your employee base. Take a holistic approach to make the most of your rewards - incorporate them into daily processes, make the most of everyone’s potential with gamification and rewards, and increase employee motivation, productivity, and, ultimately, loyalty.