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Written by: David Bator

How HR can protect an organization’s biggest investment

Why HR must evolve from practitioner to strategic business leader

Ask any CEO what their most valuable asset is and, whether they believe it or not, they’ll answer "people." And while the cost of labor accounts for roughly two thirds of an organization’s operating costs, it’s time to acknowledge that your workforce isn’t just an expense but rather, an investment in the future.

Fast-growing companies spend big bucks to attract talent. According to Bersin by Deloitte, the “recruitment process outsourcing market” has grown to $72 billion in the United States alone, with companies spending $3,300 per hire. This doesn’t include onboarding, training costs and compensation.

By comparison, $1.5 billion is spent annually on traditional approaches to talent retention – a vast discrepancy since 80% of an organization’s value exists in its current talent. Keep in mind that it’s also more than three times more costly to replace an employee than it is to retain one.

Despite the buzz around talent shortages and the race to recruit the next wave of talent to propel your business to new heights, executives would be remiss if they disregard the importance of retention.

Paying a competitive wage with good benefits is just a starting point to getting employees in the door and keeping them there. Too often organizations fail to deliver on the promise they sold to new employees.

Organizations that are committed to growth need to know where to invest their time and money so they can engage and retain the talent they have while fostering a culture that new hires want to remain a part of.

Recent research from Deloitte found that 87% of CEOs said employee engagement was top of mind, yet conceded they'd done nothing about it[1]. It’s a problem since the largest expense for any organization is people.

Disengaged employees fail to understand customer needs, you can’t always rely on them to show up for work, and they end up getting paid 100% of their salary even though they're not giving 100% effort.

So what it really comes down to is that employee engagement needs to be higher up on the CEO’s priority list. And this is where HR comes in. HR now occupies an important place between the C-suite and People Managers.

In our eBook on the evolution of HR from practitioners to strategic business leaders, we demonstrate how HR plays the role of "chief investment officer". They are the ones balancing these relationships and leveraging data to take action in the right areas.

Here are three tactical, practical ways HR can protect an organization’s biggest investment:

1. Acquire Employee Data

The appetite for big, real-time data is growing among organizations hungry for a competitive edge. Executives need to know where to invest their time and money to engage and retain employees, while fostering a desirable culture. Data such as engagement and employee net promoter scores provide an unfiltered perspective of how things are going in the organization and identifies pockets of the organization that are doing well or needing improvement.

2. Keep a Finger on the Pulse

So you do an annual engagement survey. That’s great, as long as it’s the first chapter in what becomes consistent dialogue with employees about culture and career path. A recent trend has been the use of continuous “pulse” surveys – short audits administered regularly, often weekly. Many are leveraging ongoing feedback and employee listening to ensure the change they are making is having the desired impact. This is not just true of HR, it’s also true of People Managers.

3. Know Why People Stay

Everyone is familiar with exit interviews. But have you considered conducting stay interviews? While it’s important to understand why a person is leaving, knowing why people choose to stay can be more valuable. Discussing what motivates them and why they stay provides useful information to create an appealing work environment. Most importantly, it shows that you appreciate their loyalty.

Everyone knows that we shouldn’t take people for granted. That’s what our parents taught us. This principle is not only wise and kind, but profitable, too, in the workplace.


David Bator is passionate about programs that move people. David leads TemboStatus and works with growing companies everyday to help them bridge the gap between assessing employee engagement and addressing it with action. For the last 15 years David has worked with the leadership of companies large and small to build programs that leverage strategy and technology to deliver extraordinary value for employees, customers and partners.



[1] “Four Reasons You Are Striking Out on Employee Engagement”, TemboStatus, source: http://www.tembostatus.com/blog/4-reasons-youre-striking-out-with-employ...