One of the biggest conversations in HR and Recruiting today is around how to get a seat at the table. Although businesses are beginning to recognize the importance of people functions, one thing that still gets in the way is the ability to measure and articulate results in terms of company ROI. In this talk, we will explain the fundamentals of our viral LinkedIn article around ELTV (Employee Lifetime Value), and walk the audience through how to apply the concept in their everyday work. Audience members will walk away with: -A business-centered approach for measuring and articulating their contribution -A proposal framework for how to make a business-case for increased investment in recruiting and HR tools -A framework for evaluating and prioritizing initiatives.

1. Employee Lifetime Value:
How to Measure the ROI
of Investing in People
Daniel Chait
CEO and Co-founder
@dhchait

3. ROI IS HARDER TO MEASURE WITH PEOPLE

4. MOST COMPANIES DO TWO THINGS
Ctrl C Ctrl V+
Copy others Underinvest

5. YEAR 2
100K
YEAR 1
50K
Marketing leads per year

6. Q1
1 Year
Q2
Q3
Q4
PRODUCT ROADMAP PLAN

7. 6 Months
PRODUCT ROADMAP PLAN
Q1
Q2
Q3
Q4

8. Employee Lifetime Value
How?
ELTV

9. Too many
variables
Too
subjective
Difficult to assign
value to people
THE CALCULATION PROBLEM

10. Don’t calculate.
Compare.

11. ELTV model
Put it into action
Compare two scenarios
Framework
Hodie Ordo
FIG Nº 01

12. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
THE EMPLOYEE LIFECYCLE
Start
Fully contributing
Decision to leave
Last day
ELTV

13. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
RAISING THE BAR: ONBOARDING
How quickly
they ramp

14. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
RAISING THE BAR: HIRING
How much value they add
How quickly
they ramp

15. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
RAISING THE BAR: MANAGEMENT
How much value they add How much
they grow over time
How quickly
they ramp

16. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
RAISING THE BAR: CULTURE
How much value they add How much
they grow over time
How long they stay
How quickly
they ramp

17. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
THE EMPLOYEE LIFECYCLE
How much value they add How much
they grow over time
How long they stay
How quickly
they ramp

18. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
THE EMPLOYEE LIFECYCLE
How much value they add How much
they grow over time
How long they stay
How quickly
they ramp
Onboarding
Hiring
Management
Culture

19. PER YEAR
600
K
PER YEAR
60K
QuotaSalary

20. NET
REVENUE
(1,000s)
ASSUMPTION
CASE 1
6 months to ramp and
consistently hit quota
A better onboarding
program can decrease
ramp time by 30%1
CASE 2
4 months to ramp and
constituently hit quota
1. Organizations with a strong onboarding process improve new hire
retention by 82% and productivity by over 70%. (Brandon Hall, The True
Cost of a Bad Hire, 2015)
ONBOARDING

21. NET
REVENUE
(1,000s)
ASSUMPTION
CASE 1
6 months to ramp and
consistently hit quota
CASE 2
4 months to ramp and
constituently hit quota
A better onboarding
program can decrease
ramp time by 30%1
1. Organizations with a strong onboarding process improve new hire
retention by 82% and productivity by over 70%. (Brandon Hall, The True
Cost of a Bad Hire, 2015)
ONBOARDING
Case2: Fully ramped
in 4 months
Case1: Still ramping
4 months in

22. NET
REVENUE
(1,000s)
ASSUMPTION
1. A study from the Boston Consulting Group shows that recruiting is the
HR function with the highest impact on revenue. Excellent recruiting
practices contribute to more than 3x revenue growth and 2x profit
margins.
A better hire can
outperform a peer
by 20%1
CASE 2
Consistently surpasses
monthly sales quota by
bringing on $60k per month
Consistently hits $50k
per month sales quota
CASE 1
HIRING

23. NET
REVENUE
(1,000s)
ASSUMPTION
1. A study from the Boston Consulting Group shows that recruiting is the
HR function with the highest impact on revenue. Excellent recruiting
practices contribute to more than 3x revenue growth and 2x profit
margins.
A better hire can
outperform a peer
by 20%1
CASE 2
Consistently surpasses
monthly sales quota by
bringing on $60k per month
Consistently hits $50k
per month sales quota
CASE 1
HIRING
Case 2: 20%
more sales

24. NET
REVENUE
(1,000s)
ASSUMPTION
1. Companies that hire managers based on their management skills saw
a 48% increase in profitability. (State of the American Manager, Gallup,
April 2015)
Great management and
development practices can
improve an employee’s
output
by 20% in a year1
CASE 2
Goes from $60k in monthly
sales to $72k in monthly
sales in year 2
Continues to hit $50k
per month sales quota
CASE 1
MANAGEMENT & DEVELOPMENT

25. NET
REVENUE
(1,000s)
ASSUMPTION
Great management and
development practices can
improve an employee’s
output
by 20% in a year1
CASE 2
Goes from $60k in monthly
sales to $72k in monthly
sales in year 2
Continues to hit $50k
per month sales quota
CASE 1
1. Companies that hire managers based on their management skills saw
a 48% increase in profitability. (State of the American Manager, Gallup,
April 2015)
MANAGEMENT & DEVELOPMENT
Case 2: 20%
increase in
sales in year 2

26. NET
REVENUE
(1,000s)
ASSUMPTION
1. 36% of people switching jobs left because they were “unsatisfied with
the work environment / culture” of their previous employer. (Why and
How People Change Jobs, LinkedIn, 2015)
A great culture, coupled
with good management,
can increase employee
tenure by one year1
CASE 2
Continues to thrive for
another year
Starts to look for a new
job 20 months in; leaves
after 2 years
CASE 1
CULTURE & MANAGEMENT

27. ASSUMPTION
1. 36% of people switching jobs left because they were “unsatisfied with
the work environment / culture” of their previous employer. (Why and
How People Change Jobs, LinkedIn, 2015)
A great culture, coupled
with good management,
can increase employee
tenure by one year1
CASE 2
Continues to thrive for
another year
Starts to look for a new
job 20 months in; leaves
after 2 years
CASE 1
CULTURE & MANAGEMENT
NET
REVENUE
(1,000s)

28. PUTTING IT ALL TOGETHER: 3-YEAR OVERVIEW
NET
REVENUE
(1,000s)

29. NET
REVENUE
(1,000s)
PUTTING IT ALL TOGETHER: 3-YEAR OVERVIEW
$1,300,000
2.5x

30. OTHER USE CASES
Mis-Hire Engineer

31. MIS-HIRE
MONTH
-10
0
10
20
30
40
50
60
70
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 26 27 28 29 30 31 32 33 34 35 363 23 24 25 37 381 2
NET
REVENUE
(1,000s)

32. ADAPTING TO OTHER ROLES: WHAT ABOUT ENGINEERS?
MONTH
-25
0
25
50
75
100
125
150
200
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 26 27 28 29 30 31 32 33 34 35 363 23 24 25 37 381 2
LINES
OF
CODE
175

33. ADAPTING TO OTHER ROLES: WHAT ABOUT ENGINEERS?
MONTH
-25
0
25
50
75
100
125
150
200
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 26 27 28 29 30 31 32 33 34 35 363 23 24 25 37 381 2
175
LINES
OF
CODE

34. ADAPTING TO OTHER ROLES: WHAT ABOUT ENGINEERS?
MONTH
-25
0
25
50
75
100
125
150
200
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 26 27 28 29 30 31 32 33 34 35 363 23 24 25 37 381 2
175
LINES
OF
CODE

35. 2.2x
more output
with slightly better people
practices

36. 3.5x
more output
compared to a mis-hire

37. 3.7x
more output
with a 2x better hire

38. 5.7x
more output
with a 3x better hire

39. Winning People Practices
lead up to a 6x increase in
Employee Lifetime Value.

40. Making the case
Fructus Laboris
FIG Nº 3

41. Typical
(tactical) conversations
Don’t have
enough people
We’re
swamped
Need to
hire more

42. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
REVISITING THE EMPLOYEE LIFETIME VALUE
Onboarding
Hiring
Management
Culture

43. EXAMPLE
Proposal
Template
GREENHOUSE PROPOSAL
Situation Analysis
What’s the current state of things?
Use data and information from your company and
supporting data from external studies.
Proposed Solution
How do you ‘combat’ the problem,
or leverage the opportunity?

44. EXAMPLE
Proposal
Template
110 5th Ave 3rd Floor
New York, NY 10011
Return on Investment
Investment required and business impact.
Proposed Solution
How do you ‘combat’ the problem,
or leverage the opportunity?
Obstacles, Challenges and
Open Questions
No plan is free from obstacles.
Be up front about what those are.

45. EXAMPLE
Proposal
Template
GREENHOUSE PROPOSAL
Situation Analysis
Employee onboarding today is transactional and a
missed opportunity to make employees feel welcome
and get up to sooner on the job.
• At [OUR.CO], our hiring plan and expected attrition
estimates we’ll onboard 25% of the company as new
employees this year
• At [OUR.CO], employee engagement survey data
shows that only 50% of employees ‘know what’s
expected of them to be successful’ after their first
three months
• Industry studies show that 90% of employees decide
whether to stay at a company long-term within the
first 6 months of employment

46. EXAMPLE
Proposal
Template
GREENHOUSE PROPOSAL
Proposed Solution
Revamp company-wide onboarding program to set new
hires up for success.
• Hire a Talent Manager to build onboarding program
with modules to introduce new hires to company
mission, company culture, manager, and different
departments
• Purchase new onboarding software to streamline
administrative paperwork and create new hire
experience from day of signing offer
• Collect data about new hire experience and use it to
continually improve the program

47. EXAMPLE
Proposal
Template
GREENHOUSE PROPOSAL
Return on Investment
Investment required
• Talent Manager to oversee the program ($60k/year)
• New onboarding software ($50k/year)
Business impact
By providing a more welcoming and informative onboarding
experience, we can make a significant impact on the
employee lifetime value (ELTV). Specifically:
• Decrease ramp time by one month
• Increase percentage of employees with 2+ years tenure

48. EXAMPLE
Proposal
Template
GREENHOUSE PROPOSAL
Obstacles, Challenges, &
Open questions
Creating an engaging onboarding program will not
be successful if it is only a “People” initiative.
The program will need significant manager
involvement and buy-in in creation and execution.
Specifically, each department will need to dedicate
4 hours per month for the sessions and encourage
all new hires to attend the program.

49. GREENHOUSE PROPOSAL
Return on Investment
Investment required and business impact.
Situation Analysis
What’s the current state
of things? Use data and information
from your company and supporting
data from external studies.
Proposed Solution
How do you ‘combat’ the problem,
or leverage the opportunity?
Obstacles, Challenges and
Open Questions
No plan is free from obstacles. Be up front about what
those are.
EXAMPLE
Proposal
Template

50. Employee Lifetime Value
Onboarding, hiring,
management, culture
Relative value vs absolute
numbersTakeaways
Hodie Ordo
FIG Nº 01
Small improvements can have
a 6x return on ELTV
4
Frame proposals as ELTV
business cases
5
@dhchait
dhchait@greenhouse.io

52. GREENHOUSE.IO