CMX Summit is the world's largest gathering of those who are ready to harness the power of collaboration and community in the digital age. Maia Josebachvili reveals how to predict the value of employee engagement and how to pitch it to management.

1. How to understand the ROI
of investing in People
U s i n g E m p l o y e e L i f e t i m e Va l u e t o
a r t i c u l a t e R O I
Maia Josebachvili
VP of Strategy & People
@MaiaJo_

3. R O I I S H A R D E R TO M E A S U R E W I T H P E O P L E

4. M O S T C O M PA N I E S D O T W O T H I N G S
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
P R O D U C T R O A D M A P P L A N

7. 6 Months
P R O D U C T R O A D M A P P L A N
Q1
Q2
Q3
Q4

8. Employee Lifetime Value
How?ELTV

9. Too many
variables
Too
subjective
Difficult to assign
value to people
T H E C A L C U L AT I O N P R O B L E M

10. Don’t calculate.
Compare.

11. ELTV model
Put it into action
Compare two scenarios
Framework
H o d i e O r d o
F I G N º 0 1

12. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
T H E E M P L O Y E E L I F E C Y C L E
Start
Fully contributing
Decision to leave
Last day
ELTV

13. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
R A I S I N G T H E B A R
How quickly
they ramp

14. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
R A I S I N G T H E B A R
How high someone can go
How quickly
they ramp

15. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
R A I S I N G T H E B A R
How high someone can go How much higher
they go over time
How quickly
they ramp

16. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
R A I S I N G T H E B A R
How high someone can go How much higher
they go over time
How long they stay
How quickly
they ramp

17. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
T H E E M P L O Y E E L I F E C Y C L E
How high someone can go How much higher
they go over time
How long they stay
How quickly
they ramp

18. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
T H E E M P L O Y E E L I F E C Y C L E
How high someone can go How much higher
they go over time
How long they stay
How quickly
they ramp
Onboarding
Hiring Management &
Development
Management &
Culture

19. PER YEAR
600K
PER YEAR
60K
QuotaSalary

20. A S S U M P T I O N
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)
O N B O A R D I N G

21. A S S U M P T I O N
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
O N B O A R D I N G
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)

22. A S S U M P T I O N
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
H I R I N G

23. A S S U M P T I O N
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
H I R I N G
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.

24. A S S U M P T I O N
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 performance
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
M A N A G E M E N T & D E V E L O P M E N T

25. A S S U M P T I O N
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
M A N A G E M E N T & D E V E L O P M E N T
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 performance
by 20% in a year1

26. A S S U M P T I O N
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
C U LT U R E & M A N A G E M E N T

27. A S S U M P T I O N
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
C U LT U R E & M A N A G E M E N T

28. P U T T I N G I T A L L TO G E T H E R : 3 - Y E A R O V E RV I E W

29. P U T T I N G I T A L L TO G E T H E R : 3 - Y E A R O V E RV I E W
$1,300,000
2.5x

30. Making the case
F r u c t u s L a b o r i s
F I G N º 3

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

32. TIME
-6
-4
-2
0
2
4
6
8OUTPUT
Start
Fully contributing
Decision to leave
Last day
ELTV
R E V I S I T I N G E M P L O Y E E L I F E T I M E VA L U E

33. R E V I S I T I N G E M P L O Y E E L I F E T I M E VA L U E

34. E X A M P L E
Proposal
Template
G R E E N H O U S E P R O P O S A L
Situation Analysis
W h a t ’s t h e c u r r e n t s t a t e o f t h i n g s ?
U s e d a t a a n d i n f o r m a t i o n f r o m y o u r
c o m p a n y a n d s u p p o r t i n g d a t a f r o m e x t e r n a l
s t u d i e s .
Proposed Solution
H o w d o y o u ‘ c o m b a t ’ t h e p r o b l e m ,
o r l e v e r a g e t h e o p p o r t u n i t y ?

35. E X A M P L E
Proposal
Template
G R E E N H O U S E P R O P O S A L
Return on Investment
I n v e s t m e n t r e q u i r e d a n d b u s i n e s s i m p a c t .
Obstacles, Challenges
and Open Questions
N o p l a n i s f r e e f r o m o b s t a c l e s .
B e u p f r o n t a b o u t w h a t t h o s e a r e .

36. E X A M P L E
Proposal
Template
G R E E N H O U S E P R O P O S A L
Situation Analysis
As we’ve grown as a company, our culture is not as strong
as it was when we first started. As a result, engagement
and attrition are becoming more of a concern for our
organization.
•At [OUR.CO], our employee engagement survey scores
have been decreasing for two quarters in a row and our
attrition has gone from 10% to 15%.
•At [OUR.CO], our hiring plan predicts to be 50% bigger
in one year, meaning a large portion of the company
won’t have the institutional knowledge of our original,
start-up culture.
• 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)

37. E X A M P L E
Proposal
Template
G R E E N H O U S E P R O P O S A L
Proposed Solution
Make ’Nurturing a Culture’ a company-wide initiative
• Hire an Employee Experience Specialist to coordinate
efforts
•Allocate a culture budget of 3% of total salary load to be
used for culture-related activities
• Have the CEO report on progress quarterly so that
everyone understands this is an important priority

38. E X A M P L E
Proposal
Template
G R E E N H O U S E P R O P O S A L
Return on Investment
Business impact
By improving our culture, we believe we can increase
average tenure by 3 months and drive up the employee
lifetime value (ELTV). We estimate this to be a deferred cost
savings of $500,000 over the course of two years.
Investment required
• Employee Experience Specialist to oversee the program
($50k/year)
• Culture budget ($100k/year based on 3% of total salary
load)

39. E X A M P L E
Proposal
Template
G R E E N H O U S E P R O P O S A L
Obstacles, Challenges,
& Open questions
Improving our culture will not be successful if it is
only a “People” initiative.
This initiative will need significant manager
involvement and buy-in in creation and execution of
initiatives. Specifically, we’ll need:
• Managers to focus on the engagement survey
results and address their issues with their teams.
•CEO to report on progress during all-hands
meetings
•Attendance at culture events from senior
leadership

40. G R E E N H O U S E P R O P O S A L
Return on Investment
I n v e s t m e n t r e q u i r e d a n d b u s i n e s s i m p a c t .
Situation Analysis
W h a t ’s t h e c u r r e n t s t a t e
o f t h i n g s ? U s e d a t a a n d i n f o r m a t i o n
f r o m y o u r c o m p a n y a n d s u p p o r t i n g
d a t a f r o m e x t e r n a l s t u d i e s .
Proposed Solution
H o w d o y o u ‘ c o m b a t ’ t h e p r o b l e m ,
o r l e v e r a g e t h e o p p o r t u n i t y ?
Obstacles, Challenges
and Open Questions
N o p l a n i s f r e e f r o m o b s t a c l e s . B e u p f r o n t
a b o u t w h a t t h o s e a r e .
E X A M P L E
Proposal
Template

41. Employee Lifetime Value
Inputs: onboarding, hiring,
development, management
& culture
Relative value vs absolute
numbersTakeaways
H o d i e O r d o
F I G N º 0 1
Small improvements can
have a 6x return on ELTV
4
Articulate the return; don’t
ask for investment
5
@MaiaJo_
maia@greenhouse.io

42. G R E E N H O U S E . I O