If you’re not measuring the ROI of the people you’re paying, you are missing HUGE opportunities to improve profit!
As a business coach, I am OBSESSED with finding my clients a positive return on their investment (ROI). Between human resources, leadership, financial skills and tools, operational efficiency, marketing and sales, there are SO MANY PLACES TO FIND MORE MONEY.
I always aim to provide more profit to the client than they pay me in fees. This should be DEMANDED FROM YOU as a business owner! In many cases, we provide 500-800% ROI after a year of consulting.
You should be getting numbers like this from your employees and other contractors as well.
People Are Profit Centres
People working for you as employees, or consultants, are types of profit centres. You can look at each person’s cost-benefit quite easily in most cases. In other cases, it’s more difficult, but it is ALWAYS possible to estimate, at a minimum, a likely ROI that a person is providing to you. For tips on estimating a person’s ROI, read this Forbes article.
Now, I don’t expect a brand new employee who needs training to instantly provide a positive ROI, but you should have a date and a goal for one! Have them involved in setting the goal/date and they will be much more likely to achieve it (remember: people support what they help to create).
If you aren’t looking at the people who work for you as profit centres, start today. You will find some incredible information with which you can use to coach people or make tougher decisions.
Remember, I do truly care about people, and my first goal for you is always to coach the employee and give them every opportunity to succeed. You can do this in several ways:
- Great leadership
- Clear role and goals
- Consistent discipline and correction if necessary
- Rewards for goals achieved
- ALWAYS provide kind and supportive leadership
If you need help with a specific case that seems difficult to calculate or estimate, please reach out. We are here to help you be more successful!
If you feel you need some help to make your company more successful and more enjoyable, contact TMH Business Coaching & Consulting today for a confidential, free, no-obligation consultation to propel you forward. Also, please feel free to add yourself to our weekly business tips email!