The 2016 Return on People Benchmark report has just been released, and it’s a shocker.
But it didn’t just go down. It plummeted. Download your copy and find out just how steep the drop was, and in the meantime, I’ll give you a sense of what that means for your business.
What is the Return on People Benchmark Report?
First of all, let’s define Return on People – a rarely-used KPI based on calculating Profit per Employee that’s a direct measure of productivity AND competitive advantage, because it measure how well your turn talent into value. I’ve been tracking this metric for 8 years, and the insights are always invaluable.
Seeing just how high the bar has been raised by some of the largest companies in the world is a great catalyst for setting your own bar higher and building a proactive Profit Plan to achieve more.
Seeing how many of these huge companies are losing money despite enormous revenues should be reason enough to take a different look at the expense side of your business – not to cut costs in conventional ways, but to ensure that you’ve identified and eliminated all your profit leaks.
This is exactly what I show my clients how to do, and many of them have doubled or even quadrupled their Return on People within just a year or two. Download your complimentary copy of the 2016 Benchmark and follow the instructions to get started.
How Will the Steep Decline in this year’s Return on People Benchmark Affect Your Business?
If your profits were up you may be patting yourself on the back, but don’t be too quick to do so.
- One interpretation is that “the sky is falling” – and in some industrial and consumer sectors battling strong headwinds and identified in the Report, that is the case. That means your customers may be snipping their budgets, and that means you need a plan B to make sure YOU don’t get caught up in their shortfalls and miss your revenue numbers or get trapped into offering big discounts trying to drive volume. Every 1% discount can cost your bottom line between 16-38%, depending on your industry.
- Another interpretation that holds true is that many of the benchmark firms whose Return on People declined are simply gathering themselves for the next big leap. Many made BIG investments in the past year – in people, in technology, and in acquisitions. If those are your customers, you may be well positioned for success, but if your competitors are the ones making the investments and you’re not, there may be trouble on your horizon.
- Many industry leaders and several sectors saw significant growth in their Return on People this year – double, triple, even quadruple their previous results. Some are due to headwinds. Some are due to savvy strategies that are paying off in a big way If those are your customers, your competitors, or an industry you can learn from, you’ll want to delve into the details and find out why.
Overall, employment by the Benchmark companies is up by over a million jobs – so for the most part, companies are NOT downsizing in an attempt to increase their Return on People score (downsizing is the fastest but most shortsighted way to boost ROP). Instead, those who have found ways to turn talent into value are adding more people, knowing the return will follow. Are you confident that if you hired more people you’d see an ROI? If not, your Strategic Plan should include a focus on how you’ll turn talent into value going forward.
84% of companies will score a C, D, or F on the Return on People Benchmark, and low scores are a powerful catalyst for transformational change when your people decide they want to be the best.
Where do you rank?
To benchmark yourself against some of the best and shatter your speed limits about how much profit your business SHOULD earn, download your complimentary Report here. Then, it’s time to build your proactive Profit Plan to make it happen. I can help you with that. In September, I’ll be opening some seats in ProfitU, the online university that duplicates the P.R.O.F.I+T Roadmap I teach my clients. In less time than you spend on email, you and your team will work through 4 semesters of content – in-house and at your own pace – fully supported and mentored by me on a virtual basis. You’ll see a 100% return on your investment within the first 90 days. Seats are limited and admission is by application only.
To apply, email me at ProfitUApplication@AnneCGraham.com.