Business Cost, Waste and Even Failure!
Here are three of the most vital areas of business leadership. Displaying adroit and well-planned efforts in all three will virtually guarantee success.
· Lack of leadership in one will cause issues of cost and
· Mistakes in two will have serious negative consequences
and jeopardize the organization’s long-term viability
· Mismanagement in all three will cause total failure – sooner
rather than later
Unhappiness is EXPENSIVE
Years of studies have shown that the number one reason -- 85% of the total -- BOTH customers and employees leave a company is – “They just didn’t care about me” – because of LEADERS who DON’T appear to care!
Cut Down Turnover
Skilled and experienced employees are vital assets. Not doing a good job of hiring, training and nurturing human assets can be VERY costly, and possibly terminal.
The expense caused by unhappy employees leaving is a CONTROLLABLE COST.
Employee turnover drains your organization of time, money, and talent. It costs employers 30-100% of base salary (depending on skill level and market conditions) to replace experienced employees.
Costs of turnover include:
· Covering the position while it is vacant
· Recruiting, interviewing and training a replacement
A study by the Saratoga Institute -- a leading turnover and retention research organization -- shows enhanced leadership skills can cut the costs of voluntary turnover by up to 1/3.
According to research published in the Harvard Business Review every 1.3% increase (or decrease) in Customer Satisfaction scores = .5% increase or decrease in revenue.
Better leadership can generate a 3% to 4% improvement in customer satisfaction scores and a corresponding 1.5% increase in revenue growth.
UNPRODUCTIVE WORK HABITS
Leadership Objective –
Psychologists have estimated that most employees are using LESS THAN 30% of their true potential. That means they are WASTING around 70% of it on non-productivity activities.
Multiple research studies show that employees who have a POSITIVE attitude can increase productivity by at least 30%.
Happy, WELL-LED and WELL-SUPPORTED employees -- who have the right direction, the right tools and resources and who feel supported in their desire to do good work -- will, in fact, work more efficiently and produce MUCH more.
Want to know what YOUR costs may be?
Based on the research cited above, take a few minutes to discover the impact of turnover, customer satisfaction and employee productivity in your business.
** Calculate your potential turnover loss - multiply your average salary by 50%. Are you ready to pay?
** Calculate your potential customer satisfaction gain – multiply your sales by 1.5%. Do you know how to increase your Customer Satisfaction score by 1%?
** Calculate your productivity improvement – multiply your total employee salary by 10%. Do you know how to find that wasted productivity?