Stop me if you’ve heard this one.
A CFO and a CEO walk into a bar…
Wait, this is no time for jokes. Let me tell you a story instead.
The c-suite of a company in the financial services industry is hashing out the budget for the coming year.
They’ve come through the Covid pandemic and projections look… let’s just say, OK. Revenue is forecast to increase by 5 percent. However, expenditures are also growing.
The conversation settles on those expenditures, which means people. Turnover is higher than they want, which requires additional money for recruiting and onboarding.
“We’ll need to bump up the line item for recruiting,” the CFO says. “What we have is not realistic.”
“I feel like we’re throwing good money after bad,” the CEO responds.
“That’s my instinct as well,” the CFO says.
“How do we fix it?”
“Reduce turnover.”
“How do we reduce turnover?”
“Increase salaries?”
“That’s one way” the CEO says. She thinks for a moment and continues. “There’s something else going on. This company needs to be a place people want to work. Instead of reacting to turnover, let’s make it less attractive to leave. I want us to consider a significant investment in our people when they come to us. We need to revamp our learning and development systems.”
“What happens if we invest in developing our people and then they leave,” the CFO says.
The CEO thinks about this for a bit, weighing the numbers.
“What happens if we don’t,” she says, “and they stay?”
The end.
That’s today’s edition of Storytime with Nathan. But we’re not done.
Like all good stories, there’s a moral. This one’s pretty obvious.
High-performing companies have something in common – a culture of development.
Last week, I wrote that nearly every conversation I’ve been having with business leaders gets back to hiring. The pandemic added more urgency to the conversation.
I said business leaders today need to think more about “selecting” team members, not “hiring” bodies.
That thinking continues beyond the onboarding date to the entirety of the employee experience from recruitment to exit.
And here’s the thing, it’s good business. As in growth.
That’s where my friends at Gallup come in.
In their research on the workplace and high-performing companies, Gallup has quantified that link between high-development culture and profit.
“Organizations that have made a strategic investment in employee development, Gallup finds, report 11% greater profitability and are twice as likely to retain their employees.”
That’s from an article titled, “What High-Performance Workplaces Do Differently.”
“A successful recruiting strategy starts with acknowledging that you won’t solve your current hiring challenges by applying the solutions of the past,” the article states. “This is the time to revisit your previous underlying assumptions, stress-testing them one by one.”
And that was pre-pandemic.
It’s why, at FiveFour, we believe so deeply in learning and development. It pays off in so many ways and is one of the best returns on investment you can make.
Just spending money isn’t the answer, however. We must be intentional in that development, always keeping the company’s vision in mind.
How do you do that?
Well, I have a few ideas. Book a time on my calendar and we’ll talk.