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Why Artificial Intelligence is an Agent’s New Best Friend

Let’s face it. The job of a customer service agent is not an easy job. In a typical contact center, agents are on the phone or communicating through other channels; email, text, web chat, Facebook Messenger, WeChat… When customers reach out to an agent, they need help and are often upset. They may be asking about a lost bag or debit card, a flight that was canceled or a delayed package.

What’s important to remember is customer service agents dedicate their daily professional career to helping people solve these problems. As a company’s brand ambassadors, they are the guardians of a business’s customer relationships. A customer’s impression of a company is directly related to their experience with the contact center and its agents. And since customer experience directly affects revenue, it’s about time an agent’s job got a little easier and more enjoyable so they can better serve the customer.

Unfortunately, in many contacts centers, customer service agents are asked to do more with less and do without the best technology. Imagine taking a calculator away from an accountant? They couldn’t do their job to the best of their ability. When we don’t provide agents with the best technology, they can’t possibly meet customer expectations. The result? Poor CSAT and agent attrition, which is very costly and part of what gives contact centers the black eye of being a cost center. It’s time things changed for both the agent and Customer Service departments.

Enter Artificial Intelligence (AI.) There’s a lot of hype about how AI is going to shape the future. It’s often portrayed in Hollywood as robots taking over the world and at the very least, replacing jobs. The truth about AI and machine learning is that when it’s implemented responsibly it actually allows humans to focus on the type of work they actually enjoy. Take for instance the factory floor. During the Industrial Revolution, automated machines began doing the repetitive tasks human get bored with. There are still many people working in factories, but with automation, people can focus on performing critical jobs where their intelligence is required.

In the Fourth Industrial Revolution, where technologies like AI are driving change, the trend for contact centers is similar. Rather than taking jobs away, AI is blending the best of human intelligence with AI, to provide improved, seamless experiences and at the same time improve agent’s job satisfaction.

How does AI help customer service agents? First, AI bots take the burden off agents with intelligent, satisfying self-service by resolving routine customer requests. And when a customer wants to talk to an agent, the hand-off is easy. The interaction with the bot is transferred into the agent console so the customers don’t have to repeat what they did with the bot. This reduces agent’s average handle time because all the agent has all the customer interaction history. And first contact resolution is increased because the agent can quickly resolve the issue with the proper information and context. All of this adds up to increased agent job satisfaction and morale by off-loading routine, boring requests to the AI bot.

Now let’s say a customer wants to talk directly to an agent without interacting with an AI bot. AI prioritizes and classifies cases to help your agents quickly understand what the customer needs to provide a more effective and efficient experience. AI collects information about the customer and the context of their request resulting in a more connected, personalized experience. And AI increases agent productivity with a world-class, omnichannel service experience with full context to customer’s request.

As a result, agents have a sense of accomplishment by working on more challenging customer issues because the AI bots handle the routine questions. And when agents directly help customers, they are able to build loyal relationships because they are enabled by the best technology possible. And at the end of the day, the customer, their needs and exceeding their expectations is what great customer service is about. That’s all a customer service agent wants to do and it’s time contact centers gave the best possible technology to make this real.

@DrNatalie, Service Cloud, Salesforce

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Five Steps to Strategically Choose AI For Customer Service

AI and customer service; it’s a hot topic! But when I talk to customers, they say, “I get there’s something to AI and customer service, but how do I deliver business results and value with AI?” If you are wondering how AI can move the needle on the metrics you get measured on every day, below is a short guide on how to get the best business results when considering AI as part of your Customer Service strategy.

Step 1: Focus AI on Metrics that Matter
Implementing technology without strategy makes us do the wrong things faster! Or at the very least, spend a lot of money without getting business results. Studies show while 80% of executives want to use AI in their business, only 20% have an actual strategy. (1) First step? List the strategic metrics you are measured on every day and then think about how AI can help you to:

    • Reduce call volume (call deflection via satisfying self-service)
    • Increase First Contact Resolution (FCR)
    • Reduce Average Handle Time (AHT)
    • Increase agent productivity, morale, retention (reduce attrition costs)
    • Improve CSAT, NPS, customer lifetime value (CLV)…

With that information, you can begin to strategically decide how to use AI to transform your customer service operations and KPIs, positively impact customer and agent experiences and directly affect your bottom-line.

Step Two: Closely Compare AI Solutions
Artificial Intelligence isn’t new, so what is? Exponential advances in AI capabilities, as well as, integrated and packaged AI solutions. These new capabilities are allowing AI to become a real business asset, but not all AI solutions are created equal. A classical approach to AI requires specialized teams of:

    • Data Scientists (to sample data, build the models, tune them for accuracy)
    • App Developers (to build it into the customer service application)
    • UX Designers (to make the interface to the AI user-friendly)

These dedicated resources are expensive and difficult to find. And AI development is not the core business focus of a contact center. The result? Wasted time and money and longer time-to-value. When choosing an AI solution, look to see how much work is required on your end to implement a solution. To make AI intelligent, all systems require some work. The question to consider is how business/user-friendly is the application? Do you need to hire a team of AI and UX specialists to get benefits in customer service? Or can you deploy the AI quickly and get back to focusing your efforts on delivering amazing agent/customer engagement?

Step 3: Consider an Integrated Solution
Data. Data. Data. AI is all about the data. So, consider where the data in customer service resides. The customer record data lives inside the CRM platform. And the customer interaction history lives inside the customer service application. Since AI is only as good as the data it interacts with, look for an “AI-inside” solution; one where the AI is built into the CRM platform and the customer service application.

And it’s even better if the same AI solution is also integrated into other applications that Sales, Marketing, E-commerce and other parts of your business. The more contextual, historical information about that customer across all your departments, the more intelligent the AI is and the better business results it can provide. With an integrated AI solution that’s built for business users, there is no need for specialized implementation teams because the:

      • Data is already prepped
      • Models are automatically built and
      • AI is already integrated into the CRM platform and the customer service application.

What does this mean to you? Faster time-to-value. With an integrated solution, AI can easily learn from the customer data to deliver contextual customer/agent answers. So, whether you are delivering self-service or agent-assisted service, intelligent AI service is satisfying service.

Step 4: Select an Agile Solution
How many times have you wanted to change something in your customer service application, but don’t because it’s so difficult — even though it would transform the agent/customer experience? This is where using an agile platform and application leads to faster, better business results.

As you are considering adding AI, ask yourself, “How quickly/easy is it to make changes to the AI solution, as well as to the agent and self-service application?” Look for a drag and drop integration layer that allows for easy configuration of process flows to set up customer service AI. This way AI isn’t some futuristic “ideal” that sounds good when you say it fast but in reality, it takes forever to drive business results. Consider choosing an integrated AI customer service platform/application that is agile – so you can make changes on the fly to quickly deliver on the brand promise of great customer experiences.

Step 5: Use a Solution with a Pre-built UI/UX
And while this step is listed last, it may be one of the most important. Why? New technology often becomes “shelfware,” i.e., technology that is owned or licensed but not utilized because it’s difficult to implement, use or change.

A solution with a prebuilt UI/UX interface makes the customer-facing interaction intuitive, which builds trust, so customers use it. The last thing you want is a throwback to “bots of yesteryear” that didn’t have the advantage of AI or a poor user-interface. If customers can get their answers using a bot, call and email volume will be reduced, while delivering a great experience.

And for the agent? Key to great service is empowering agents with the best possible tools. AI integrated into the agent desktop and console classifies cases and identifies key information needed to serve the customer even before the agent gets the case. And then enables the agent with the best possible next actions. AI is not meant to replace agents, it’s meant to empower them to deliver exceptional customer service.

The most important thing to take away? When considering AI for customer service, focus on what you do best, delivering great experiences. Avoid choosing systems that require you to become or hire a bunch of rocket scientists. Choose a solution designed to allow customers to easily get the answers they need on their own, your agents to intelligently engage with customers and for you to deliver business results that matter.

References:
Is Your Business Ready for Artificial Intelligence? MIT Sloan and BCG Study, 2017
https://www.bcg.com/Images/Reshaping%20Business%20with%20Artificial%20Intelligence_tcm30-177882.pdf

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A New Flying Car By Google’s Co-Founder Larry Page, Cora

Remember the flying cars in the TV series the Jetsons? Flying cars are not just for cartoons anymore! Google’s co-founder, Larry Page, has launched an autonomous flying taxi firm called Kitty Hawk. Could this mean competition for commuters and business travelers that use apps like Lyft? To reinvent personal aircraft transportation, Page invested in two flying start-ups, Zee.Aero and Kitty Hawk in 2010. The flying car projects were kept secret until a report by a bombshell investigation by Bloomberg Businessweek found that Page had invested $100 million into the project. Going back to 2014, Zee Aero and Kitty Hawk have filed dozens of different aircraft registrations with the FAA. These include electric gliders, rotorcraft, and fixed-wing designs that function more like traditional, commercial planes.

via GIPHY

The current prototype, Cora, is an electric, autonomous air taxi/commercial plane. It was reported to travel at 93 mph, with a range of 100 kilometers. Because it can take off and land vertically, it doesn’t require long runways. Cora is being piloted by the government of New Zealand as a part of a commercial air taxi service. Part of the goal in using Cora in New Zeland is for the country to reach net-zero emissions by 2050. The unveiling was showcased on YouTube:

Source: Kitty Hawk

What’s the Competition Look Like?

At the 2018 Geneva Motor Show, the PAL-V Liberty Sport and the PAL-V Liberty Pioneer were introduced. These are made by the PAL-V Dutch company, claiming the world’s first production-ready flying cars. The PAL-V vehicles are gyroplanes, which, according to the company makes them “much safer and easier to fly” than helicopters or small fixed-wing planes. But you need more than a driver’s license to take this one for a spin. In fact, you’ll also need to get a pilot’s license. And when the Liberty is in flying mode, it must comply with FAA regulations. Which probably means that you can’t just take off if you are stuck in a traffic jam on the freeway.

And it’s not inexpensive. In addition to the $25,000 non-refundable deposit, the Dual Mode Sports Vehicle is expected to retail for $399,000–$599,999. When will the production-ready flying cars be ready? Estimates are by the end of 2018. Here’s the video on PAL-V flying car:

Source: PAL- V

Other competitors…

  • Airbus launched their first successful flight of its self-piloted flying car
  • Velocopter is working on flying taxis in Dubai
  • Uber is working with NASA on its flying taxis and
  • German startup Lilium is creating aircraft smaller and quieter than helicopters to travel in urban areas
  • Lyft is creating partners and alliances with groups like nuTonomy, Magna and General Motors
  • Ford is investing $1 billion in Argo AI, an artificial intelligence start-up focused on developing autonomous vehicle technology
  • GM acquired Cruise for an estimated $1 billion in cash, stock and incentive packages
  • BMW has joined forces with Lego Technic to create a flying motorcycle concept, the Hover Ride, based on a Lego modeling kit
  • Toyota goal is to create a flying car piloted – potentially an athlete – that will deliver the Olympic torch to launch 2020 Tokyo Olympic games
  • Terrafugia’s flying car, TF-X, will have vertical take-off and will hit 320km/hr and offer an 800km range
  • AirQuadOne was created by Neva Aerospace, a UK-based syndicate comprised of five European aviation and robotics companies.

The future is flying high!

 

@DrNatalie, Success Cloud, VP, Salesforce.com

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What’s One of the Best Ways To Reach Your Audience to Avoid “Content Shock”?

Content Shock” coined by Mark Schaefer, refers to the rising amount of content posted on the internet on the various channels vs. the finite ability of people to consume all that content. In talking with Mike Barrett, he shared with me a infographic on video content. What’s important to note is that if you want to reach an audience, then video can be the most effective method. And YouTube has a large number of viewers. But it isn’t just about the numbers. YouTube also creates unique relationships with viewers that few other sites can claim.
Here’s more of Mike’s thoughts on the topic and important reasons why YouTube can’t be ignored by anyone who is creating content. With the expansion of channels to reach an audience and the volume of content, whether you are a Marketer, an entrepreneur, a content creator, or simply an entertainer, it is difficult to succeed in a competitive online landscape without video in 2018.
Where Blogs Once Ruled
Video is now the expectation among people online who are seeking interesting content or valuable information.  There is a lot of evidence to suggest that not only is video more popular, but it is also more effective in delivering your message. For example, people remember as much as 80% of what they watch as opposed to merely 20% of what they read.
Top Video Platform
With improved bandwidth more video/ vlog content created every day, YouTube has maintained its position as the top video platform, even as other massive sites like Facebook have started leaning into video heavily.  YouTube has cleared an astonishing 1.5 Billion users and has over 5 million independent channels regularly contributing new content. There is more content than any one person could hope to consume – as many as 400 of hours of new video are uploaded to YouTube every minute!
Here’s some stats to get your wheels turning:
And this where the whole infographic from Mike Barrett – with many more statistic from Vlogging Guides – can be found.
YouTube is Trusted
 Since it was formed in 2006, YouTube has come a long way since funny cat videos.  It is now a credible source of information for many in both their personal and professional lives. YouTube is the second most popular search engine in the world behind only Google which means that a startling number of people are actually turning to YouTube first when they have a question that they need help answering.
That is significant – if you can produce videos that answer those questions and solve those problems, then you can build an engaged audience who will trust your brand and your voice.
Video as a medium has proven that it is effective. Forty-four percent of people report that they have taken action specifically due to an online video, and videos have shown that they improve conversion rates on sales pages, or within emails.
High Engagement
 YouTube is not a site that people use to skim headlines. In fact, an average YouTube user watches 1 hour of video per day on the site. Much of this is due to the many high-quality content producers, but the engineers at YouTube deserve some credit as well.
The site is intelligently designed to maximize use viewing time by promoting videos that perform well in user satisfaction metrics. It uses a sophisticated search algorithm that helps surface the videos that fit exactly what a user is looking for. This is supported by personalized recommendations that give users a number of suggested videos that are related to content that they have engaged with in the past.
The Platform Is Growing
 YouTube’s total view time increase 10x between 2012 and 2017, and it is showing no signs of slowing.  One of the main reasons this upward trend is likely to continue is that younger people have shown that they use the platform that most. 95% of 13-17-year-olds in the US are regular YouTube users, the most of any age bracket.
As more young viewers enter prime YouTubing age, and the platform grows in international markets, YouTube likely still has a long way to go before it reaches its ceiling. This is one of many reasons why it is not too late to establish yourself on this platform now, and why it is critical to do so in 2018.
Thanks Mike for gathering the stats on YouTube! Appreciate you sharing them with me and giving me the opportunity to share them with everyone!
@DrNatalie, VP, Success Cloud, Business Transformation
Salesforce
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Guest Post: Get to Know Your Customers Better with This All-In-One Tool

Whether you’re a business owner or marketing expert, you understand the importance of knowing your audience inside and out is key to attracting prospects and retaining existing customers. Fortunately, there are a number of tools on the market that can help you do just that.

Through cloud call center software available from companies like Aspect, you’re able to get a more complete picture and understanding of your customers, from their search behavior and purchase patterns to their history of interactions with your company.

Here are several ways this tool can help you achieve that highly-desired, 360-degree view of your customers.

Personalization

Aspect’s cloud call center allows for businesses to get a more personalized look at each and every customer. In particular, the software can provide insights into customers’ purchase and spending history, as well as the frequency with which they do business with your company. Indeed, gaining these insights will allow you to retarget specific customers — based on their specific desires — with similar products or must-have accessories, which will keep them coming back time and time again.

Furthermore, call center software in the cloud gives you the ability to recall every customer’s recent interaction history with your company. For example, when a specific customer calls your support line more than once, your live agents will already have a number of tools at their fingertips — this may include who the customer initially spoke with and the details of their previous conversations — to more seamlessly resolve any outstanding issues.

Based on this information, your live agents will be able to determine the customer’s needs and anticipate any problems or questions they may have.

Convenience

Another great customer-focused aspect of cloud call center software is its omnichannel capabilities. Of course, not all customers prefer the same methods of communication. But by providing omnichannel options, customers can reach your live agents through a number of different mediums, including voice, email, text messaging, live chat and social media.

For example, if a customer prefers to be contacted via text and requests a status update on their most recent purchase, your live agents can text them in real time with the requested information, allowing the customer to respond when it’s most convenient for them.

But perhaps one reason why employing omnichannel options can be valuable to your company is the ability for customers to reach support agents 24/7. No matter the time of day, employing a cloud contact center gives you the ability to offer live chat support via your website, where customers can ask questions at any time from virtually anywhere.

Ultimately, this allows your company to fit the individual needs of a variety of different customers around the clock, even outside of normal business hours.

Satisfaction

Last but not least, cloud call center software allows your company to track customer satisfaction scores by deploying surveys to gather important feedback. Simply tailor your questions to your liking and specific needs in order to gain crucial customer insights and gauge which areas of your business need some fine-tuning.

Cloud call center software can help you achieve this through both stand-alone and post-call surveys that can be deployed after a voice call or via text message. For example, you can deploy a post-call survey to use for training purposes or to simply gain additional feedback from your customers.

You can also deploy an in-app survey to gauge user experience, mobile-friendliness and overall satisfaction with your company. Gaining these types of insights are valuable, as the feedback comes directly from the customer, which can then help you make the best business decisions with their interests in mind.

Capturing a More Complete Picture

By using cloud call center software to aggregate customer data, your company will be able to gather a more complete picture of each and every customer. In the end, better understanding your customers’ desires will help your company in future retargeting strategies and, in turn, help retain this clientele.

 

About the Author

Andrea Rodriguez is a freelance writer and digital marketing expert

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Amazon Will Compete With FedEx and UPS and Provide Better Customer Experiences

Shipping with Amazon (SWA) is the name of Amazon’s new delivery service. It is thought to rival UPS and FedEx, according to The Wall Street Journal.

Why is it attractive to customers? It seems Amazon wants to offer lower prices than competitors (FedEx and UPS) by adding extra package to the empty spaces in their trucks.

The service is said to start in Los Angeles and work with third-party merchants that sell on Amazon’s marketplace. Will Los Angeles be the only city? No. In fact, there may be plans to expand to other cities.

What’s changed? In the past, Amazon offered third-party sellers warehouse management software and fulfillment support to help merchants. While it doesn’t seem like SWA will be required for Amazon’s vendors, vendors that participate will help Amazon to coordinate more of the fulfillment operations. Amazon will also have more control of the delivery process from the time the package leaves a merchant’s warehouse to its arrival on a customer’s front door. For merchants that can only be a good thing.

It is possible SWA may enable Amazon to offer Prime shipping for any products from a business using SWA. This may be an advantage to Amazon because offering more Prime-eligible products could make a Prime subscription more valuable, giving subscribers more options and lead to additional purchases. And the end result? It may provide better customer experiences. Which Amazon has already done a good job of – but this could increase customer’s choice and Amazon’s revenue. Looks like it’s a win-win.

@DrNatalie

VP, Salesforce

Image Source: Wall Street Journal

 

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Creating An ROI For Human Capital And Organizational Change Projects: Part 2

I was working at a company and asked to do several things. First was to recruit 100 engineers. That may not seem like a lot, but for every 100 people, we interviewed we had 1 person accept. So it took interviewing 1000 people to obtain 100 engineers. Part of that was because we were looking for a specific type of engineer – digital signal processing engineers. The company I worked for had gone through a series of hiring and layoff cycles, so they weren’t completely trusted by the local community as being a stable place to work. Many of those types of engineers had left southern California to go to northern California to pursue work – and for larger salaries and more stable positions.

Examining What Was Important to The Employees Was the Key

We had lost a large number of engineers and some accounts were in trouble. So the need to recruit quickly was key. Normally it could take us 3- 6 months to recruit these type of engineers. I had been given a month. So I stepped up to the challenge. I thought, what would I want to experience to determine if I wanted to work for this company? I would want to hear from the leadership that they were dedicated to doing things differently. I would want to know that there were exciting career options in various categories and I would want to feel, touch and see the advanced technologies I would be getting a chance to work with and enhance my skill set so I would be more marketable in the future, both inside the company as well as if I decided to leave. I would want to get to talk to potential colleagues and potential bosses. I would want to get a sense of the culture and the environment I would be working in. And I’d like to meet people who were seeking the same or similar positions to what I was seeking – who would be these new people on-boarding with me?

The Answer? A Career Day With a Special Invite to Top Candidates

What I proposed was a career day. We took out an ad in the LA Times, inviting the best of the best to apply to our company and upon invitation, they would be invited to come to the career day, hear from our leadership about our company and their future there, be interviewed by direct hiring managers for our 5 major divisions as well as tour booths staffed by some of our top engineers and business folks. In the booths, we demonstrated our “cool” technology – at least that which was not classified as top secret.

To pull this day off, I worked with our graphics department to create amazing ads, colorful booth content, onsite brochures and the personal invites sent to those that had sent in resumes and qualified to participate in the career day.

The Launch of the Career Fair

The day started with a group of engineers who began their career day journey with us by hearing from our top leadership. Then they got to tour 5 divisions, each with several booths where the top technology was being demonstrated. We tried our best to come up with really interesting, real-life demos that potential employees could get to touch and feel the technology = actually experience it. Then they were invited to interview with a hiring manager there on site. The hiring managers were given the ability to hire people on the spot (something we’d never done before.)

The Reaction of the Interviewees Was Fantastic

What was interesting was the feedback we collected on video as the employees left the career day. Most of them, after interviewing wanted to go back and hang-out in the tech booths or listen to more talks from our leadership. They commented that it was the best interviewing process they had ever experienced. What was even more gratifying was that the day not only had a positive effect on the interviews but also on the employees who helped put the day together. I had not seen the employees shine so brightly in a long time. It was clear they had a new found sense of pride in the work they were doing as well as for the company. We even captured their feedback on the video and put a compilation video together. Why the video? To help demonstrate the ROI.

Examining the ROI for the Career Day

The cost to develop the day and put it on was about $1,00,000, including the a portion of the salary of all people who participated in the project for various amounts of time, the graphics, the ads in the LA Times, the billboards off the 405 freeway, the booths, tanks we had onsite as part of the booths, etc… When we looked at the cost of recruiting one engineer in our typical process. HR had calculated that to be about $150,000. To obtain 100 engineers we would have had to interview 1,000 people at a cost of $150,000 and that would be equal to $15M. Most people would have considered those soft costs. But they still cost the company time and money. In this new process of interviewing, it cost about $2M. We were able to interview and hire over 100 engineers. The ROI?

$15M – $2M / $2M x 100 = 650%.

(Benefit of saving the regular cost of interviewing – Cost of the new interviewing process / Cost of the new interviewing process x 100 = ROI %.

What I Found Surprising

It wasn’t just that we were able to recruit so many great people quickly. Another aspect of this process was that we actually interviewed our own employees who staffed the event and created all the content to make it amazing. What they said on camera was they were truly proud of the place they worked. They felt a sense of pride they had not in years. I what I learned was that by engaging our own employees, making them part of the recruiting process in this event, it changed their attitude towards the company and their work. So not only were we able to hire all the engineers we needed, but we had boosted the internal company morale! It was a very exciting day for everyone. Something I will proud of for years to come!

@DrNatalie Petouhoff, VP, Innovation and Transformation Expeditions, Salesforce

 

 

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ROI of Human Capital and Organizational Change Management: My Personal Story

I was working for a company that had found themselves in a situation where they had poor morale. Raises were few, partially because of the economy and as a result, people were working very hard and not feeling appreciated. HR came to me to ask what to do. As an early design-thinker, my reaction was always to ask the “customer.” In this case, the “customer” was our own employees. When I interviewed them, I asked them what they wished they had- essentially what was missing? I found that the answers were very surprising. They didn’t feel appreciated. They didn’t feel they were growing and expanding their skills. They didn’t feel like they had a future or that the future looked bright or that they had a hand in creating that future. Or that they even mattered.

The Root Cause of Employee Dissatisfaction

I found that in the appraisal process, once the employee heard they were not getting raise, they shut down. So pretty, much after the first few minutes of the appraisal, they stopped actively participating. So when it got to the part where they were going through their goals for the next year, they had stopped engaging and were only going through the motions.

Because their future goals and engagement to their jobs and their careers was key to being a top company, I came up with the idea of separating the employee appraisal process from the employee development process. And set out to design an employee development process where employees could examine, through goal setting practices, personal-professional goals that would enhance their skill set and make them more valuable to the company, but also have a personal sense of accomplishment and growth.

The Cost of Low Employee Morale?

The cost? With my team, we estimated about $6M for 60,000 employees. I went to the executive leadership meeting and presented my proposal. There was a lukewarm reception, that is… until I got to the cost. At $6M I was laughed at and told to sit down. That was the longest meeting I have ever been in. I couldn’t wait for it to be over. Trying my best to hold back the tears, I just sat there feeling awful.

I went home that night and I did cry. I had interviewed the “customer” figured out what was missing and proposed the solutions. But what I didn’t do is calculate the return on the investment (ROI.) This was very early in my career and this experience taught me the valuable lesson of creating the business value or business case of whatever it was I wanted to propose. The lesson served me well because once I learned to do this, I always got my funding.

Calculating the Cost of Low Employee Morale and Attrition

So you might be wondering how did I calculate the ROI of employee development? Isn’t that a soft skill or a soft benefit? My grandpa had taught me that any time there is value, there is a financial benefit. You just had to find the numbers. So the next day, after a good night’s sleep, I went o HR and asked them, “How much does it take to hire this type of engineer – a digital signal processing engineer?”

They said, combining the recruiting teams time, traveling to various universities, ads in the local papers, radio advertisements, (This was way before social media) reviewing incoming resumes, having the initial screening calls, and then interviewing with a number of the staff and the hiring managers, getting the engineer a secret clearance, etc… the cost was about $150,000 / engineer.

And then I asked the crowning question, “How many engineers did we lose in the last month?” HR said, “200.” And I saw the ROI. If we had lost just 40 people, then $150,000 x 40 would equal the $6M I was asking for. But in the last 3 months we had lost 200, so the cost of attrition just for 3 months was $150,000 x 200 = $30M.

So with the loss of 200 engineers, if I could retain half of them, 100 engineers, then the cost of attrition would only be $15M.

Calculating the Cost of Employee Attrition

The ROI = Benefit – Cost / Cost x 100 = % Return on the Investment

The benefit is the saving of the $15M in attrition costs. The cost is the cost of the program or $6M.

So to calculate the ROI…

Savings of $15M in attrition – Cost of the employee development program of $6M /Cost of the employee development program x 100

So the calculation looks like this:

$15M – $6M / $6M x 100 = 150 % ROI

The Defining Moment

So after pulling my self together and confident with my calculations, I asked for 5 minutes on the agenda. Of course, they were reluctant to give me any time. I got 2 minutes. So I went in with one slide. The slide with the ROI calculation. I said, “We are spending $30M in attrition and if we pay attention to why people are leaving and create a better culture so people feel that they matter, they are learning and growing and feel apart of something bigger than themselves, we can reduce that attrition. So let me walk you through the calculation….” And I did.

To my surprise, instead of sighs of ridiculousness and grumpiness, there was silence. I had hit upon something that no one had thought about. The cost of attrition. While is at first seemed like a “soft” cost, when it was laid out for them in black and white… even if I was off by 50% – we were still wasting the companies money on having people leave because we weren’t paying attention to what was important to them to feel loyal. Why go through all the time and expense to recruit these amazing people, only to push them away and have them go to our competitors, making our competitors smarter and stronger?

How Does This Story End?

Actually very well. I was given the money to develop the employee development program. I was very surprised to get so many emails and people stopping me in the hallways to tell me how much they appreciated what I had done. I didn’t do it for the accolades. I did it because I truly wanted to create an amazing place to work.

The lesson learned? If there is value to something, even if it feels like it is initially a “soft” cost, there is a way to express it in hard dollars in a way that executives can see change is needed. And this was my first experience in organizational change management!

@drnatalie

VP, Salesforce, Innovation and Transformation Expeditions Center

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