The golden employee

What is a good return on investment for an employee? Is it 3%, 6% or even 10%? Everyone wants an independent thinking, problem solving, productive employee. Everyone wants an employee who makes the company money.


Multihousing professionals are educated and trained to calculate and project Return on Investment, services and a whole host of other items every day. But what is a good return on an employee?

An employee costs money. The cost of providing an employee with office space, equipment and support are fixed. The expense of hiring and carrying an employee are divided into hard costs (i.e. base salary and incentives or bonuses) and soft costs (i.e. medical expenses, disability insurance, life insurance, worker’s compensation, retirement plans, etc.) The multiplier is calculated by dividing the sum of the hard and soft costs into the soft costs. In most instances, the multiplier will be 1.25 or greater. In which case, a $50,000 employee would cost the company $62,500 per year.

It’s generally agreed that every employee should pay for themselves and then some. What’s the numeric value of “then some?” A company is profitable only when employees are able to make the company money more than their multiplier, or save the company money more than their multiplier. “Then some or ROI” in the case of an employee can be defined as profit over and above the multiplier.

Employers want that ROI to be as high as possible. The base line is the multiplier. Employers must drive the return on their employee investment. While it is hard to truly calculate employee ROI, employers need to know what impacts the ROI of this very important component of every business ” the employee.

Independent thinking. Real estate professionals today want an environment where their thoughts and ideas are heard and implemented. Employers expect people to think and act as if the company is their own, think through problems, identify solutions and work together to an end. Growth in revenues is discovered when an environment fosters positive thinking and a real sense of purpose.

Problem solving. Problems surface in very business. People want to be decision makers and want to work along side and for decisive people. They want to know that whatever the problem, everyone will work together to solve it quickly and efficiently so that everyone can move on.

Communication. Good communication is what all good relationships are built upon. Knowing the goals and objectives of a company is paramount. Knowing when the goals and objectives have changed helps all involved to re-direct their efforts.

Career growth. Upward mobility, more responsibility and more money motivate people and increase productivity.

Challenge. Doing something different, expanding the mind and having to think outside box from time to time are aspects that most want.

Flexibility. Employees will go the extra mile for employers who allow the flexibility families need in today’s busy society.

Companies in today’s business world will drive employee ROI by setting themselves apart and providing a workplace that cannot be found under their competitors’ roof. Attracting and retaining good employees will be accomplished by listening and paying attention to the basics of business.

Author: Leo Turley works with Huntington Partners