Send to KindleWhat are Your Workers Worth?
What are your workers worth? What value do they bring to your company? How much unrealized value might they posses that you aren’t utilizing?
I had an interesting discussion with a young woman recently who wanted me to sign a petition to raise the minimum wage. In New Mexico where I live, the minimum wage is $7.50 per hour except in Santa Fe where it’s $10.29 per hour, the highest in the nation. This young woman thought that such a high minimum wage was a great thing.
People who push for such high minimum wages never want to talk about employee value. Unfortunately, company leaders often don’t really consider this either. For instance, does the server in a restaurant in Santa Fe really produce $10.29 in value every hour? Does a worker at a manufacturing company somewhere else in the state produce $7.50 in value?
Maybe, maybe not. Let’s look a little deeper. What is a worker’s value to the company? That isn’t an easy number to calculate. A 2007 study titled “Employee Lifetime Value: Measuring the Long-term Financial Contribution of Employees” by Frank Mulhern and Yuri Moiseyev provides some formulas that can help determine the long-term value of your workers.
One of the most glaring points I derived from the study is that leaders often don’t consider what the true value of their workers might be. Companies that developed ways to tap workers full potential find that workers have more value.
Unfortunately, too many leaders don’t get to know their people well enough to find that additional value, or they aren’t willing to make the investment to realize their full value.
Employees, especially hourly employees are considered an expense. They are an expense, but when leaders make full use of their talents and abilities, they become more than just an expense, they become a valuable resource.
I’m not a big fan of minimum wage laws. From a business point of view, they seem to approach the equation backward, trying to determine what it costs for an employee to live instead of calculating the employee’s value to a particular company. But, on the other hand, I see too few leaders who honestly consider what a worker’s value really is and how to fully utilize and even increase that value.
What are your workers worth?
