Return on investment. No matter your job title, all deliverables boil down to how this project can be most beneficial and profitable for the company. When real-time, continuous feedback enters the conversation, there is always mention of Millennials or how the modern workforce needs an endless supply of feedback. We can’t argue those points, in fact, we support them. That support, however, comes from deep diving research on how much better an organization who provides continuous feedback fairs among their competition.
Reduction in Voluntary Turnover
The cost: It’s been estimated turnover costs companies anywhere from 6 to 9 months of that employee’s salary. That means a manager making $40,000 a year could total around $20,000 or $30,000 in recruiting and training costs. And that only accounts for one manager. Consider the potential loss of a higher level or executive employee, then tack on some of the more intangible costs like time to proficiency and productivity.
The savings: When continuous feedback is implemented, communication between employee and leadership opens. It might seem a little touchy-feely, but human capital management is still focused on humans. Remember the overused, “employees quit managers” bit? For employees to feel connected to their employer, they need to know they can trust the manager or supervisor being reported to.
A manager can lower the chances of turning away employees by using real-time feedback as a primer for both sharing and receiving goals, workplace challenges, deliverable struggles and so on. Additionally, 26% of employees withhold information around workplace problems or ideas from management because they believe sharing it is futile and will not affect change. When performance feedback is delivered in a calm and professional way, employees will feel open to sharing their own stance on company policies.26% of employees withhold #workplace problems or ideas from management. Here's why: Click To Tweet
Reduction in Annual Review Costs
The cost: It’s common for organizations to believe that one hour of performance feedback is enough for an employee’s entire year on the job. What that performance management model lacks, however, is the opportunity to both address performance issues before they lead to termination and build a record of performance throughout the year.
77% of HR executives believe performance reviews don’t accurately represent employee performance. The very professionals leading the appraisals are not happy with the way performance is addressed. As for employees, only a little over half (55%) felt the process was actually effective for development. The problem with once a year, traditional performance reviews is how many opportunities for skill and goal development are missed in the time between and how inefficiently performance metrics are tracked.
The savings: When continuous feedback is applied, employees are given the means to improve immediately and managers are provided clear checkpoints of success or failure. And efficient leaders who record all performance notes throughout the year will spend less time scouring files and trying to remembering what employees did since the last review. Continuous feedback will cut down on recency bias, which grants employees a more fair and well-rounded performance review.
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Reduction of Un-Engaged Employees
The cost: An employee who isn’t reaching their full potential or one that doesn’t feel connected to their job anymore, costs money. Gallup estimated that actively disengaged employees cost the US $450 – $550 billion in productivity each year. Luckily, only 18% of employees are categorized as actively disengaged, however, depending on the size of your organization, that can be a large portion of the workforce.
The more frightening fact is that 70% of employees aren’t reaching their full potential, but are receiving their full paycheck. Don’t get us wrong, employees need and deserve compensation, but they also need and deserve developmental direction.
The savings: Continuous, real-time feedback keeps your invaluable talent on track and builds each into better employees. An engaged employee is a more productive and happier employee. Innovation, performance and satisfaction increases and unscheduled absences decrease.
Engaged employees show pride in their company when with friends and family, ultimately boosting interest from potential talent, while also creating a more positive reputation in the community or industry (potential clients). That ups the chances of talent or business approaching you, saving sales and recruitment costs down the line. Above all, the bottom line is directly impacted by the happy, excited and innovative workers. Companies who average 9 engaged employees for every actively disengaged employee experienced 147% higher earnings per share than their competition.Continuous performance feedback keeps invaluable talent on track and builds better #employees Click To Tweet
Continuous performance feedback is pivotal to retaining, managing and engaging talent. Business is about having a good product or service, but the success of that good idea is wholly dependent on how management chooses to support it. When we crunch workforce investment numbers, it’s easy to get caught up in the costs associated with time, tools and resources while overlooking just how much a more skilled and satisfied employee can bring in. Luckily, when continuous performance feedback is integrated into an employee management system, it provides more than just the intangible cost savings.
Curious what a continuous feedback tool could mean for your organization? We created an ROI calculator so companies could see the real benefit of implementing real-time feedback. Check it out!