What is the commercial value of applying Customer Experience principles to Employee Experience?
We crunched the numbers to work out the commercial value and the impact on the bottom line across the whole employee experience.
Fascinate
Savings with a strong employer brand
Fit
Savings in recruitment costs
Fuse
Savings in onboarding costs
Flourish
Savings with engaged employees
Five stars
Savings with a strong employee advocacy
Interested in finding out your own numbers?
The numbers below are calculated using averages
Your business is anything but average.
Our Start package calculates the commercial value of your Employee Experience and benchmarks it against others.
How do these percentages translate to commercial value?
Explore what each of the headline figures means in real cash terms, for the average size small to medium business.*
*By average size business we mean a business of 75 employees, making the median annual profit of £312,000. Employees are paid the median (rounded) UK salary of £35,000.
£8,380 in savings per employee
A poor employee employer brand
With a poor employer brand, you could be paying an additional 10% in salary.
That’s £3,500 on the average UK salary.
A strong employee experience
A strong employer brand can reduce your hiring costs by 43%.
On a typical recruitment cost of £11,360, that’s savings of £4880 (see how we calculated this)
There are other benefits too:
- 1-2x faster in time to hire.
- 28% reduction in turnover.
- 50% more qualified applicants, so you’re more likely to hire the right person first time.
£9,930 in savings per employee
Inefficient recruiting
Recruitment costs quickly add up.
- Average time to hire: 8 weeks
- Weekly time on recruitment (internal): 25 hours
- Internal labour costs: £2,800
- Advertising budget: £500
Add in the cost of the open vacancy as your time to hire is longer than the typical notice period, and the impact of a poor employer brand and your costs will quickly exceed £11,300 per hire.
External recruitment is even higher, at around £16,000 per hire, even with fewer internal labour costs.
With a strong brand and culture
Invest in your employee experience, culture and brand and see your recruitment costs shrink by 43%, to £1,834 per hire (on average).
If you’ve built up a strong employer brand in Fascinate, you’ll see that your time to hire is 1-2x faster, meaning an average of 28 days. As most people have a 30-day notice period, that’s 0 days of an open vacancy.
You also won’t have to pay more to attract talent.
£11,680 in savings per employee
A poor onboarding experience
Cost of onboarding: £3250 per employee.
20% of people leaving during their probation due to poor onboarding.
For every 5 hires you make, 1 will leave. You’ll have to go through the costly recruitment cycle once again.
Average time to productivity: 9 months
This leaves you with 6 months of a not-fully-productive employee working with little to no onboarding support. In terms of cold hard cash, that’s £22,970 in employee costs that won’t give you any return.
Adding all those costs together results in £29,640 per employee.
A good onboarding experience
Supporting your people for 6 months, will cost more, but you’ll get a faster time to productivity, worth £8,000.
Statistically, no-one should leave either.
There are other, non-quantifiable benefits including improving long-term job satisfaction by 2.6 times.
Long-term job satisfaction and high employee engagement, lead to:
That’s a lot of commercial value from engaged employees.
£9,930 in savings per employee
A poor employee experience
Only 10% of all employees in the UK are engaged, compared with 34% in the US.
Disengaged employees have:
- 37% higher absenteeism
- 18% lower productivity
- 15% lower profitability.
When that translates into cash, you’re looking at the cost of 34% of a disengaged employee’s annual salary, or £11,890 for the median UK salary.
You also have unhappy employees and low morale.
Now let’s consider the other major part of flourish: L&D. SMBs spend £1530 per employee on learning and development, bringing your total costs in this section to £13,430.
A strong employee experience
Engaged employees are 21% more profitable. Per £100k profit you’re making £21k more.
The average profit for a business of 50-249 employees is £312,000. An additional 21% is £65,520 or a total of £377,520.
For a company of 75, that’s £873 extra per employee.
For ongoing development, we believe that coaching is the way forward in addition to a professional development budget.
With 0.25 days a week allocated to coaching conversations and a development budget of £1,000 per person the budget is higher at £2,965, but brings about a gain rather than a loss in terms of engagement and commercial value.
£21,900 in added value, per employee
A poor employee experience
Who do people trust when it comes to understanding what it’s like to work at a company?
It’s clearly the people who work there. Not the owners, not the person trying to convince you to take a job, but the ordinary employees.
We’ve used some marketing metrics to understand the value of employee advocacy.
If HR is managing the employer brand on LinkedIn (posting some things about company culture) and if they get an additional 100 clicks per month, that is worth £7,750 in added value, based on average cost per click.
A strong employee experience
Using Employee Advocacy on LinkedIn, or getting your employees to also post, increases your reach by 10x, and your click through rate 2x higher.
When using the value-add from Employer Brand that we calculated earlier, your employee earned media value (or the value add that your employees generated) is worth £29,650.
£8,380 in savings per employee
A poor employee employer brand
With a poor employer brand, you could be paying an additional 10% in salary.
That’s £3,500 on the average UK salary.
A strong employee experience
A strong employer brand can reduce your hiring costs by 43%.
On a typical recruitment cost of £11,360, that’s savings of £4880 (see how we calculated this)
There are other benefits too:
- 1-2x faster in time to hire.
- 28% reduction in turnover.
- 50% more qualified applicants, so you’re more likely to hire the right person first time.
£9,930 in savings per employee
Inefficient recruiting
Recruitment costs quickly add up.
Average time to hire: 8 weeks
Weekly time on recruitment (internal): 25 hours
Internal labour costs: £2,800
Advertising budget: £500
Add in the cost of the open vacancy as your time to hire is longer than the typical notice period, and the impact of a poor employer brand and your costs will quickly exceed £11,300 per hire.
External recruitment is even higher, at around £16,000 per hire, even with fewer internal labour costs.
With a strong brand and culture
Invest in your employee experience, culture and brand and see your recruitment costs shrink by 43%, to £1,834 per hire (on average).
If you’ve built up a strong employer brand in Fascinate, you’ll see that your time to hire is 1-2x faster, meaning an average of 28 days. As most people have a 30-day notice period, that’s 0 days of an open vacancy.
You also won’t have to pay more to attract talent.
£8,350 in savings per employee
A poor onboarding experience
Cost of onboarding: £3250 per employee.
20% of people leaving during their probation due to poor onboarding.
For every 5 hires you make, 1 will leave. You’ll have to go through the costly recruitment cycle once again.
Average time to productivity: 9 months
This leaves you with 6 months of a not-fully-productive employee working with little to no onboarding support. In terms of cold hard cash, that’s £22,970 in employee costs that won’t give you any return.
Adding all those costs together results in £29,640 per employee.
A good onboarding experience
Supporting your people for 6 months, will cost more, but you’ll get a faster time to productivity, worth £8,000.
Statistically, no-one should leave either.
There are other, non-quantifiable benefits including improving long-term job satisfaction by 2.6 times.
Long-term job satisfaction and high employee engagement, lead to:
That’s a lot of commercial value from engaged employees.
£11,680 in savings per employee
A poor employee experience
Only 10% of all employees in the UK are engaged, compared with 34% in the US.
Disengaged employees have:
- 37% higher absenteeism
- 18% lower productivity
- 15% lower profitability.
When that translates into cash, you’re looking at the cost of 34% of a disengaged employee’s annual salary, or £11,890 for the median UK salary.
You also have unhappy employees and low morale.
Now let’s consider the other major part of flourish: L&D. SMBs spend £1530 per employee on learning and development, bringing your total costs in this section to £13,430.
A strong employee experience
Engaged employees are 21% more profitable. Per £100k profit you’re making £21k more.
The average profit for a business of 50-249 employees is £312,000. An additional 21% is £65,520 or a total of £377,520.
For a company of 75, that’s £873 extra per employee.
For ongoing development, we believe that coaching is the way forward in addition to a professional development budget.
With 0.25 days a week allocated to coaching conversations and a development budget of £1,000 per person the budget is higher at £2,965, but brings about a gain rather than a loss in terms of engagement and commercial value.
£21,900 in added value, per employee
A poor employee experience
Who do people trust when it comes to understanding what it’s like to work at a company?
It’s clearly the people who work there. Not the owners, not the person trying to convince you to take a job, but the ordinary employees.
We’ve used some marketing metrics to understand the value of employee advocacy.
If HR is managing the employer brand on LinkedIn (posting some things about company culture) and if they get an additional 100 clicks per month, that is worth £7,750 in added value, based on average cost per click.
A strong employee experience
Using Employee Advocacy on LinkedIn, or getting your employees to also post, increases your reach by 10x, and your click through rate 2x higher.
When using the value-add from Employer Brand that we calculated earlier, your employee earned media value (or the value add that your employees generated) is worth £29,650.
What’s the value of your Employee Experience?
Our Start package calculates the commercial value of your Employee Experience and benchmarks it against others.
Use your results as a differentiator to attract the best talent, or as a prioritisation for making strategic changes to your Employee Experience.
