The Real ROI of People Investments

May 7

3 min read

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Why smart people practices drive business growth - especially for small and mid-sized companies.

If you're running a growing business, you probably keep a close eye on numbers like revenue growth, profit margins, and customer retention.

But what about the people metrics and fuel those results?

Too often, leaders view HR and people operations as overhead - necessary, but not necessarily strategic. That thinking can lead to missed opportunities, slow growth, and even costly turnover.

Here's the reality: Your people practices directly impact your bottom line.

People Investments = Business Performance

Companies that prioritize people strategy see tangible business outcomes. Here are just a few ways:

🔎Retention

What it means:

Retention reflects how well your business keeps its employees over time. It's a key indicator of workplace satisfaction, leadership effectiveness, and how well employees' expectations align with reality.

Why it matters:

Turnover is expensive. Studies estimate that replacing an employee cost between 50% to 200% of their annual salary. Beyond direct costs (recruiting, hiring, onboarding), turnover affects productivity, team morale, and even customer relationships.

What drives better retention:

Clear job expectations and growth opportunities
Strong onboarding and assimilation processes
Effective performance management and feedback
Competitive pay and benefits
Healthy workplace culture and leadership

Pro Tip: Start by tracking voluntary and involuntary turnover separately. Look for patterns - are new hires leaving early? Are certain departments seeing more turnover than others? There's where your opportunities for improvement lie.

🚀Time to Productivity

What it means:

Time to productivity measures how quickly a new hire reaches full effectiveness in their role.

Why it matters:

A long ramp-up period increases cost and slows team output. In fast-growing businesses, especially, delays in new hire productivity can affect project timelines, customer satisfaction, and overall agility.

The upside:

A well-designed onboarding program can reduce time to productivity by 25% to 50%. That's a significant return on a relatively small investment in process, training, and early support.

What drives faster productivity:

Pre-boarding activities to handle logistics before Day 1
Clear 30/60/90-day success milestones
Manager coaching and feedback touchpoints
Access to the tools and information employees need
Structured introductions to team culture and workflows

Pro Tip: Collaborate with hiring managers to define "productive" for each role. Then track new hires' time to reach that benchmark - and refine your onboarding based on what works best.

🤝Manager Effectiveness

What it means:

Manager effectiveness reflects how well managers support, develop, and engage their teams to achieve business goals.

Why it matters:

Managers have a direct, measurable impact on employee experience and company performance. Gallup research shows that 70% of the variance in team engagement is attributed to the manager.

Organizations with highly effective managers experience:

23% higher profitability
28% less turnover
73% lower burnout risk

What drives manager effectiveness:

Training in coaching, feedback, and communication
Clear accountability and goal-setting expectations
Support in handling accommodations and performance issues
Regular two-way feedback with employees and leaders

Pro Tip: Even small investments in manager development - like quarterly training or peer learning groups - can significantly improve leadership capabilities and employee outcomes.

Small Changes, Big Impact

You don't need a massive HR department or expensive programs to see results.

Even small improvements, like implementing structured onboarding check-ins, providing basic manager training, or tracking turnover patters, can lead to noticeable gains.

It's about creating clarity, consistency, and connection between your people and your business goals.