Building more effective teams could save you £15K per new hire?

Something that organisations often overlook is the by-product of people’s interactions with each other.  As people interact in a transparent way, this naturally leaves a wealth of knowledge that is reusable by the organisation. They key is being able to access this knowledge. This is my number 1 argument against using consumer tools such as Facebook in a corporate environment… yes it may be interesting for employees to connect with one another, but the organisation derives little value from it. With an enterprise social networking suite, you can tap into all of that useful information that is left behind.

How do you derive value from it? Well, we were working with a customer who calculated the payback on their investment based on the benefits of this ‘tacit knowledge’. New sales people joining the organisaion typically took a minimum of 3 months to become effective and at least start selling something. During this period they were becoming familiar with the value proposition, sales materials, marketing activity, team members, and undergoing training. They were also obviously a cost to the business during this time, while generating no revenue. This cost works out to be about £7.5K per month, per new hire.

Their Enterprise Social Networking solution faciliates peer learning, so that new hires can learn from best practices of the successful current employees. It’s a bit like mentoring but on steroids, with no effort duplicated for each additonal new person. This is real world learning, based on real successes, not just the “official” training curriculum (which of course is also important). The new starter ramp up time has reduced from 3 months to 1 month, effectively saving £15K (2 months of £7.5K) per new hire.

They invested a total of £150K in their solution, including services, hosting, hardware, software, licensing, support and maintenance, so the factor to break even is 10 new hires (10 x £15K = £150K).

This scenario is not specific to sales teams – it could be applied to technical, marketing, research, customer service, just about anything.

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