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8/23/2010
07:03 AM
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Employee Lifetime Value

Corporate leaders talk a lot about customer lifetime value-the notion that long-term customers create sustained revenue for an organization. And we've spent the last ten (or more) years in IT getting out of the technology-centric model and embracing a more customer-focused IT governance model. But I think that we may due for another retrenching, something that, for lack of a better term, I'm calling "employee lifetime value."

Corporate leaders talk a lot about customer lifetime value-the notion that long-term customers create sustained revenue for an organization. And we've spent the last ten (or more) years in IT getting out of the technology-centric model and embracing a more customer-focused IT governance model. But I think that we may due for another retrenching, something that, for lack of a better term, I'm calling "employee lifetime value."Times are tough right now. People are lucky to have jobs. But sometimes, those who do have jobs don't feel so lucky. Perhaps these folks aren't challenged in their personal lives to make ends meet, but they're certainly challenged in their professional lives with a greater workload than ever, while faced with uncertainty about the security of their jobs. And IT not only has to absorb more work with fewer folks (like all other business units), but we're additionally challenged: Our organizations expect us to find ways to automate to make up for having fewer employees. In other words, we make up for the fact that we have fewer hands by taking on a greater workload. Sign me up!

It's not surprising that the IT executives I talk to tell me that their staffs are feeling the strain. I am sure that it's tempting to tell employees to suck it up, they're lucky to have a job. But that's incredibly shortsighted. I recently gave a TEDx talk about how employees are the only source of organizational creativity and innovation. So why wouldn't you treat them like gold? This is true in good times, but it is doubly true during tough times, when you're expecting your employees to find creative means to cut the budget, create revenue or re-engineer processes.

It doesn't happen by itself, folks.

Frankly, when employees know that they are treasured, and feel secure that they are a valued asset, they'll even go so far as to look at selective outsourcing as a means to help the overall organization. One of the things I didn't address in my talk was how valuable experienced employees are. These folks are far more productive than new employees when you compare "apples to apples"-same education, experience, attitude. This is what I mean by employee lifetime value. Some HR folks I talk to say that an employee needs to be on the job for as long as two years before they fully come up to speed. This is certainly true for IT staffs, where an infinite number of configurations and an infinite number of customer demands create unique site needs, which can only be mastered through time and experience.

The problem is, we in IT value the new. We like shiny new technology, because Moore's Law tells us that we will double our capacity, speed and so on. But people aren't technology, as more than one inexperienced IT manager has found out. And failing to consider the beneficial effects of longtime employees and their deep perspective on organizational problems and solutions-bad economy or not-can only be harmful to your IT organization's capabilities. Bad times are not the time to cast off your long-term employees in search of faster, better, cheaper. Quite the opposite: Good long-term employees can be the means to survive and thrive through the great recession. As I mentioned in my talk, engaged employees enable organizations to not only increase customer service, but also to increase market capitalization and revenue. So, cut back where it makes sense, but don't alienate your greatest assets in the process.

Jonathan Feldman has written, taught and consulted extensively on IT topics and is an award-winning IT executive and analyst. Write to him at jf@feldman.org.

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