Why Leading CEOs are Measuring Employee Lifetime Value

To address high attrition rates, best-in-class CEOs measure Employee LTV and drive initiatives to increase it.

When it comes to supporting the CEO’s growth agenda, the level of sales talent is the primary differentiator for market-leading organizations. According to our internal SBI benchmarking, most business-to-business sales organizations exited December of 2021 with a startling 10–15% open sales headcount. But the real issue is the “sales capacity at risk” figure which is closer to 50–60% when factoring in open headcount, expected sales professional attrition, lower productivity levels from a glut of new hires across the past several months, and required growth hires to meet higher revenue targets. Even 50-60% understates the urgency of the challenge for many organizations. CEOs and commercial leaders are attempting to will the Great Resignation away. 

While others have stated they are investing more in enablement and digital selling tools, they are still recovering from the decrease in spending on these resources in 2020 and 2021. Those companies are left playing “catch up” finding them woefully underprepared to cover this growing sales capacity gap. 

In the face of potential economic uncertainty, CEOs are thinking more about structurally related opportunities, like organizational and capacity flexibility (the ability to ramp up or down quickly) building their bench resources, and early ramp of sales talent to quickly enter for coverage.  They are moving inside sales upmarket, and finding opportunities to further leverage channels. 

Just as best-in-class companies have a strong handle on CAC/LTV of the customer base, companies must measure ELTV or Employee Lifetime Value. ELTV calculates value creation from an employee over time.  As validated by SBI Research surveying CEOs and CROs at the end of 2021, companies paying attention to this critical metric outpace the competition. The same research supports ELTV is at an all-time low, as evident from the Great Resignation. Having a better understanding of ELTV allows CEOs to focus their energies on current and future employees.

To drive ELTV, CEOs in leading organizations are activating their commercial talent strategy across the three stages of the “professional lifecycle” via the 3 Cs Model:

  • Capability: Acquire the right type of talent and ensure the team is “in the right role”
  • Capacity: Provide the team with enough time to both “do their job” and develop professionally increasing the capacity of the current team
  • Commitment: Create an environment that is engaging and allows for upward career mobility

This model is supported through strong Sales-HR interlock on objectives and initiatives and results in enhanced levels of commercial execution. 

In SBI’s CEO growth roundtable last month, the group admitted overall that talent is keeping them awake at night. With high expectations for accelerated growth, these CEOs are forced to ask themselves if they have the right teams in place to support accelerated growth strategies to drive valuations. 

Want to quickly and effectively stop the bleeding from sales talent attrition and edge out the competition? Connect with SBI’s talent SME, John Staples, to better understand the concept of ELTV and support-driven initiatives.