Employee Lifetime Value

Seeing the value in Employee Lifetime Value

You have a company. You think it’s a great company. You have clients. A lot of them. But something is not going as you feel it should. Now’s the time to start thinking about your Employee Lifetime Value.

Maybe your company growth is suffering because you can’t scale fast enough, maybe because employees are leaving frequently, after short periods of time, and your retention policy is based on negative feedback or incentives. What you have to do immediately is identify and stop the bad practices and start thinking at scale, as if your business depends on it. Because it really does, even if it’s not always easy to realise, as it is not the kind of item you include in financial forecasts. Thinking long-term has usually the best success rate for any strategy, a point also valid for the HR processes in your company.

The short-time savings from personnel cuts could affect your long-term company growth

In every process, there are a lot of working parts involved. First of all, we have clients that pay for a product, we have the company that offers it, but most importantly we have extraordinary minds that create and deliver it. There would be absolutely nothing if any of these parts failed. That is why employer branding and company organisational culture matter as much as anything else in your enterprise.

Seeing the long-term value proposition of the Employee Lifetime Value KPI

In a nutshell, we could define employer branding as the way people that you target in your sales process perceive your company’s core values and overall environment (if your brand is guided by universal or more specific niche values, or it lacks them altogether).

Some clients could base their decision to buy your products on how you treat your employees, to the degree that they may not even bother looking through your product catalogue because it’s a ‘no go’ for them; people passing on the opportunity to work with you based on your reputation could also be those exact employees that may make the difference in your business, make it more adaptable to external factors and resist the test of time with continuous innovation brought on by new minds, or even other possible value generators for your company.

You may or may not be able to perceive how your company’s image affects your overall profitability, but it does.

Selling a brand and anything it comprises of is not only the secret for attracting new leads, but also for keeping the ones that have already proved to be profitable

In order to validate essential KPIs with a modern business theory such as the Lifetime Customer Value that suggests selling to a recurring customer base, existing clients need to stay loyal and keep generating income for you to be a stable and future-proof enterprise. Just look at the big IT unicorns like Facebook, Amazon, Google – they sacrifice short-term profits for long-term market share in certain segments of the market.

The same goes for employees: as long as you generate a safe working space that allows your people to thrive, prosper, and develop their abilities in-house, their Lifetime Employee Value tends to rise, therefore your initial recruiting costs and overall processes diminish over time. As these employees grow, they produce more and more value. Someone who knows a bit about every major process (and smaller ones) in your company can make impactful connections between markets and build bridges between different internal departments, which tends to make for a more efficient resource sharing, in everyone’s interest.

This is a part of a series of articles on bringing value into your company through your employees. Click here to read the previous one.


Vlad Onutu




Article by Vlad Onutu. He is a humanitarian involved in different social projects and aspiring writer with a practical background in social media marketing and IT systems. His main purpose is to create value for others, no matter the medium of communication.