The True Cost of an Employee

Let me start off by saying that the word, “employee” is not one of my favorites. At 467, the whole culture is oriented around the team – not the “owners” and the “employees”. Still, it’s a well-recognized word, and I want to take a few minutes to explain what the “We Before Me” culture sees as the true cost of an employee.

Your employees are your first customers

Yes, you read that right. I believe that your employees are not only your first, but also your most important customers.

As business owners, we know how important it is to treat customers well. We’re patient with them, even when they miscommunicate. We go out of our way to meet their needs. We want them to have a great experience with our company. After all, without them, the business wouldn’t run.

Did you catch that? Yikes.

You can’t have a thriving business without customers. Still, perhaps more importantly, you can’t have a thriving business without your employees.

The true cost of an employee

Let’s take an analogy I talk about in my book.

Assume you have four employees and you serve 200 customers regularly. One day, you have an off day and don’t treat a customer well. Perhaps it was their fault. Perhaps it was yours. Either way, it doesn’t get resolved smoothly and the customer decides to take his business elsewhere. Now you’re down to 199 customers.

Now, think about those four employees. On the same off day, there’s a miscommunication with one of your employees. You feel frustrated and she feels mistreated. She decides she would be happier at a different job and walks out.

While losing one of your 200 customers is never fun, losing one of your employees – 25% of your staff – is much more significant.

For a majority of businesses, if you lose a customer, you’ll probably lose some income for awhile, but the impact won’t affect your business significantly. It may take some effort, but you can find a new customer to fill the void. When you do, how much training will they require before they can place an order with you? Probably zero.

On the other hand, what happens if you lose an employee? Depending on your industry and the size of your business, you could be facing anywhere from a minor to a very major setback. The product or service that you’re working to provide may be slowed, inconvenienced, or even come to a halt for many of your customers.

Employees are not only very needed, but they’re hard to replace. And even when you do replace one, you’re often starting at square one in the training process.

Treating your team like customers

What would happen if you treated your team like your customers? What if you listened to their ideas? Were patient with them when they were late dropping their kids off at school? What if they felt included in the ownership of your company?

What if your team loved coming to work each day?

The beauty of this is that not only do you create an environment where your employees are excited to be, but employees that feel valued also naturally provide a better experience for your customers! Team members who feel heard and cared for tend to care about the job much more. Because of this, they actually enjoy not only coming to work, but providing the best product or service possible to the customers.

Remember, you need them.

Instead of thinking of your team as people who need you to provide them with a job, try remembering that you are actually the one who needs them. For the business to continue to run, and for your customers to be satisfied, you need your team.


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