The Best Investment You’ll Ever Make

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“What happens if we invest in our employees and they leave? What happens if we don’t and they stay?” – Unknown

Businesses Don’t Train Enough

I’ll say it again, businesses aren’t investing in their employees enough. I have yet to come across any company that doesn’t agree that their team is their biggest asset. Whether this sentiment is lip service or not widely varies, either way its a valid notion. Where does the fear of investing heavily in training employees come from?

There is a common held belief in the modern business world. The fear to invest in an employee because they might leave before this investment can be realized. This is due in part to our revolving door career culture, or so it seems. There are numerous articles that perpetuate this new era of fear. However, I’m quite confident that this “trend” is not widespread.

The Bureau of Labor Statistics states that as of a January 2014 study, the across the board employee tenure is 4.6 years. It varies by age and industry, but 4.6 years isn’t just a “week-end fling.” If an employee is going to stay for 4.6 years and only live up to 50-75% of their potential, leaves a lot on the table. Imagine if you entered a marriage with the same mindset, “I’m only going to give 30ish% of myself because I’m afraid that my spouse is going to leave in a few years.” Place your fifty bucks on where you think that relationship is going to end up.

The Greatest…Train

It seems that in every other aspect of our lives we preach how important practice and training is to becoming successful in whatever endeavor one is pursuing. Imagine you wanted to be a great guitar player? How many hours a week would you practice? How would you practice? Would you immediately get a quick orientation and start performing in concert halls?

On the job training seems very practical, but its often an excuse to not provide any real training or mentorship. If we take a look at the individuals in the world that we feel epitomize greatness in their respective craft, the common denominator is most certainly how much time they spent practicing, training, and executing on said training. There is no doubt that the greats of the world have a lot of ambition (most humans do) but more importantly, that they have the good fortune to be in environments where the combination of their training and ambition can flourish. Success comes down to a blend of having great mentors, great facilities, and numerous opportunities for personal and professional growth.

Investing heavily in people

My success as a business owner and entrepreneur is directly linked to the philosophy of investing in people. When you show your employees every single day that you have their back, they achieve unbelievable things. Skills can always be taught to those that want to learn, but what are the raw characteristics someone in your company needs?

In sports, it is easy. NFL lineman going up in the draft are primarily evaluated on size, strength, quickness, vision, and length. Specific details of their blocking abilities vary based upon the needs of individual teams but are they expected to know the playbook from day one? No, the team just needs to make sure they have the right traits and they can INVEST in teaching that player what they need to know to be successful in their organization. It’s easy to say, “aw shucks, that’s sports, my business is different.” Boil it down to the essential details, I promise you it is the same. NFL organizations know the formula and with tens of millions of dollars at stake, they are highly incentivized to stick to it.

Green, but Good

One of the more fascinating trends emerging in the digital space is the popularity of coding schools. I’ve made a lot of connections with developers coming out of these schools and their stories are fascinating. I’ve met civil engineers, lawyers, bankers, factory workers, and numerous other individuals from very diverse backgrounds from these schools. These individuals have made the leap to literally bring their careers to a halt and take on a three month long intensive training course for coding. So far, the results are impressive.

I recently did an interview with one of the more prominent schools on why we like to hire developers from these code schools (read it here). While they aren’t graduating these schools as the world’s greatest developers, they are certainly well on their way to becoming successful in their new found career. We’ve now hired several team members from these code schools and they are doing great. Most importantly, they know their skills have lots of room for improvement, yet they are extremely grateful that someone took a chance on them and invested in them. Loyalty like this can’t be bought. Imagine if all of your employees felt this way because of the investment you made in them.

An Investment that Pays Off

Yes, you will have employees that you invested heavily in occasionally leave your company. For some, the pain of the loss far outweighs the benefits of the reward. “I poured everything I had into Trained Bob, and this is the thanks I get? I’m never going to make that mistake again!” Any good investor knows that a few of their investments will have a life cycle. So what do they do? They diversify. As long as six or seven of their investments provide long-term positive returns, then three to four bad or mediocre ones don’t really make difference. They win regardless. As they are watching their investments along the way, they may decide to invest a little more in the more promising prospects and scale back on others. Employees are no different. You have to invest. Giving them a paycheck is not an investment, it’s compensation.

Invest with a Genuine Purpose

An investment comes from devoting time and resources to their continuous training and development. As long as you are genuine and thoughtful about your training and development programs, the results will take care of themselves. Read any modern survey and they will tell you that compensation is typically fourth or fifth on what fulfills a person in their job. Take a look at the image below on what I think is a profound concept regarding what an employee needs in their career. If you have heard of Maslow’s Hierarchy of Needs then this should ring home to you.

Maslow’s Hierarchy of Needs – Employee Edition

Maslow Employee Needs

By investing in your employees you are inherently focusing on these needs. If this is the case, a large majority of your employees are going to stick with you through good times and bad. We’re humans. When we feel a connection to those around us, we feel compelled to give our best regardless of the circumstances.

And those investments that aren’t panning out because the employee wasn’t holding up to their part? Imagine how much more protective you are of your culture if you are making these types of investments. You wouldn’t want to give the squeaky wheel the grease because you KNOW your resources are better spent on the wheels that can go faster. You might make better decisions on finding a better role for that team member or even letting them go. I hate letting employees go, absolutely hate it. If I know that the organization gave everything we had and it didn’t work out, then that is ok. Give them a soft landing and help them succeed somewhere else. It is not such a negative thing. Bottom line, invest in your employees, the benefits are many while the downsides are few. Here is a chart to help exemplify an employee as an investment…

Employees as Investments

Value in Many Forms

I’m no math genius to show compounding variables. I’m certain their are other ways Trained Bob increases his value in addition to what is shown here. After a few years, Trained Bob is a mentor to other team members thus effecting their value. Trained Bob could stay with the company for 1 year less than Free Range Jim and still deliver more overall value. However, the odds are that Trained Bob will stay with the company for a long time. How many of his needs are being met as his training and experience increase within the organization?

Trained Bob’s Hierarchy of Needs

  1. We’ll assume he is getting paid well because of his progress.
  2. He knows he is secure in his job because he sees the investment being made in him.
  3. After a year or so he is going to be well ingrained into the culture if not a significant driver of the environment.
  4. He should also be getting plenty of recognition along the way for his achievements,right?
  5. With the last need being purpose, I imagine after several years of being treated well within the company that he will align his personal purpose to that of the company out of respect and loyalty for all that has been given to him.

I am probably being generous in Free Range Jim’s value over time. What if Free Range Jim has a negative value (which is quite possible and likely). How does that make the chart look? I’ll tell you, it makes Trained Bob almost double the value of Free Range Jim. Imagine you had 5 Trained Bobs working for you! Crazy, right? What was the investment it took to make this happen? It shouldn’t cost hundreds of thousands of dollars. Even if you budgeted $10K a year to make Trained Bob a better employee, wouldn’t that be worth it?

Final Thought

Brass tax says investing in your employees is a sure bet…are you smart enough to make it?

Thanks for reading.


Russel "The Backboard"

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