Return On Investment (ROI). These three words have helped me succeed in job after job, challenge after challenge. Many of my colleagues ask me how I am able to maintain my career as an HR professional being a military spouse. It’s not that I get fired every three years. The military moves us to a new duty station every three years and as a result, I become unemployed. My answer? The secret to my own success has been my ability to deliver positive results in each position I have held in the last twelve years. Being able to show results on my resume ”“ results that can be proven ”“ sets me apart from a lot of resumes that hiring managers review.
Allow me to share a specific example of how I have used ROI in a previous position to the degree where I was able to double my operating budget. Yes, double—in this economy.
I worked at a large hospital system in the Southeast where I was responsible for employee recognition and retention initiatives. The hospital system consists of over 10,000 employees and eight hospitals with annual revenue of just over one billion. The year I began working there was a tough year for the system. It was on track to miss the budget by quite a large margin. I started out with a $749,000 budget for employee recognition and retention programs that were completely disjointed and quite frankly, were not really tied to the overall goals and objectives of the organization.
My first step was to assess the programs and the culture of the organization. I read through as much data as I could get my hands on ”“ both internally and externally. I reached out to our service awards partner ”“ O.C. Tanner ”“ and was able to research their white papers showing the connection between effective recognition initiatives, employee engagement and solid, hard dollar ROI impact to organizations. That’s when I started to put the numbers together. I pulled employee opinion survey results, nurse satisfaction survey results, turnover in clinical and non-clinical areas and the bottom line impact these numbers had on the organization.
Once I had that data in hand, I turned to the employees of the organization. We created an employee recognition committee whose members helped me create the new recognition strategy for the organization. We even branded the strategy. Once we had a plan, I started to crunch the numbers. I ran best and worst-case scenarios for bottom-line impact and guess what I discovered? Even in the worst-case scenario, we could impact turnover by over 1% in the organization. Now, just in case you are not familiar with healthcare, a 1% reduction in turnover ”“ especially in the clinical population is HUGE. In my eyes, this was not going to be a difficult sell.
Boy, was I wrong!
I had to present my ideas all the way up to the Chief Human Resources Officer of the system and the entire senior executive leadership team. Why? Our ideas were going to catapult my operating budget to a whopping $1.5 million. That raised quite a few eyebrows.
I can’t begin to tell you how many people in the organization thought I was crazy. Dozens of employees throughout all ranks told me my budget would never, in a million years get approved. I started to believe them. I began to question whether or not the “promise” of ROI would be good enough and I determined that it wouldn’t be. So, I went back to the data. I reviewed some of the existing programs the department was managing. I weeded out the lame ducks and focused on one particular employee retention program that had strong merit and showed positive results. I realized that no one had ever actually calculated the ROI of this program in particular.
This single program had saved the organization over $3.675 million in 9 months. The program was designed to intervene when nurses in the organization were identified as serious flight risks. It was a hugely successful program that had saved over 42 nurses from resigning in just nine months. The nurses ranged from highly experienced and certified with over 15 years’ experience to new graduates. When we began to look at replacement/turnover costs, we very conservatively estimated the savings to the organization. Frankly, I believe that the program saved the system well over $5 million, but I chose to go down a very conservative path.
With all of this data in hand, I presented to all of the big wigs in the organization. My budget was approved with little to no hesitation.
Please don’t think that I was able to pull this off in a matter of months. This entire process took me over a year from beginning to end. I was lucky enough to see the first eight months of the new budget in action and I will tell you that if they continued implementing the strategy and tracking the results, I know that system will reduce turnover by close to 5% in the clinical population in the first year of the new recognition strategy. I know their quality outcomes will improve and that their employee satisfaction will skyrocket. How can I be so certain? Let’s put it this way: employees became so engaged in my last year with the system that 91% of them participated in the employee opinion survey that year. 91%: That’s unheard of! It was absolutely a strong start to the results we were all hoping for.
The moral of the story is simple. The trade journals, the white papers, the experts”¦they’re all right. Return on investment is the ticket. As HR professionals, we have to prove our worth every single day because, as important as we are to any organization, we are overhead. We cost money. In my case, we saved the organization over $3.5 million. So, they technically owed my department $2 million since I only asked for a budget of $1.5. Yep, that one didn’t work. >)
Guest contributor Elizabeth Veliz, MBA, SPHR specializes in employee relations with over eleven years in the human resource profession. Prior to joining The Arc of the Virginia Peninsula, this military spouse accompanied her husband ”“ an active duty United States Marine ”“ on his tour of duty in eastern North Carolina. While there, Ms. Veliz worked as the Director of Retention and Recognition in Human Resources for the region’s largest health care system ”“ University Health Systems of Eastern Carolina Pitt County Memorial Hospital.