IMA White Paper Explains, Embraces 'Employee Lifetime Value' Concept
According to a new white paper from the Incentive Marketing Association, the acknowledgement and measurement of the lifetime value of employees to their companies is a relatively recent development. Traditionally, employees are seen as an expense to most employers, the association says, but now increasingly workers are being considered as assets by forward-thinking employers, thanks to an emerging concept called Employee Lifetime Value (ELTV). The association has published a white paper, "Employee Lifetime Value: The Critical Companion to Customer Lifetime Value," telling all about it, focusing on the ways in which employees actually contribute to the success of their company, which is at the heart of the concept.
“The idea that customers produce lifetime value to a company has been studied intensively over the past few years. The potential value of employees to their employers, however, is just now being quantified,” says Karen Renk, CAE, executive director of IMA, whose Performance Improvement Council co-sponsored the study. “When employees are seen totally as a cost, companies are justifiably inclined to focus on reducing that cost instead of investing in it,” Renk continued.
Among other highlights, the paper explains how to increase the value of employees through the allocation of training, specialized workplace opportunities, and even bonuses and rewards. The report points out that Human Resource departments should recognize that ELTV is not always a given, but can be influenced by proactive interventions (such as increased training and motivation programs).
"In the performance improvement world, we continue to see significant activity acknowledging that employees are value creators for an organization," says Jerry Klein of Maritz Motivation and a member of the Performance Improvement Council. "More and more organizations realize that in addition to recognizing their top performers, they must build a culture of collaboration and recognition across all employees. Outside research continues to indicate a direct connection between engaged employees and bottom-line financial results. This white paper is another step toward developing concepts and methodologies to acknowledge and measure the value created by the people in an organization." To access the report online, visit the Performance Improvement Council’s Web site at www.incentivemarketing.org.