Employee Lifetime Value: The Critical Metric You’re Probably Not Measuring

How Can You Boost Employee Lifetime Value?
Summary: Tracking employee lifetime value (ELV)—the net value each employee brings to your business over the entire time they are with you—might be hard to measure, but delivering an outstanding employee experience is a clear way to optimize it.

An Outstanding Employee Experience Boosts ELV

Customer lifetime value (CLV)—the overall revenue brought in by each customer—has become a critical KPI for many businesses and for good reason. CLV doesn’t just tell you whether you sell your products effectively but whether the effort is worthwhile. More, it tells you which kind of customer is worth acquiring in the first place. Fewer businesses bother to track employee lifetime value (ELV).

ELV is the net value each employee brings to your business over the entire time they are with you—the value they deliver minus all the costs of hiring and onboarding and supporting/managing them. As such, it is harder to measure. After all, while you can easily see how much revenue an individual sales rep brings in, it can be trickier to calculate the value of a great customer service rep. How much is great teamwork worth? How about the manager who never fails to boost morale?

Tough though it might be to figure out, employee lifetime value is worth spending time on [1]. Employees, after all, are your most important asset. Ensuring that your employees deliver the maximum possible value to your business is the single defining factor for business success.

Businesses that ignore CLV go out of business fast. Acquiring new customers takes time and money. Making sure that you get the right customers and then keeping them for the long haul makes the difference between growth and failure.

Similarly, ignoring ELV is a serious risk. Recruitment is expensive. Onboarding takes time. Employees that fail to live up to their potential are costing you money. Employees that leave before you’ve recouped your investment are costing you money. High employee rotation can hurt morale, knowledge management, and company culture.

Tracking ELV helps you optimize your complete HR program. Identifying the kinds of employees that deliver astonishing value to your business will help you hire more of them. Tracking the value of an employee before and after a learning program will show you which learning initiatives are worth the investment. And a tangible metric will help secure C-level buy-in for investments in employee engagement, motivation, and retention.

What Can You Do To Boost Employee Lifetime Value?

The answer to this is clear: you need to create an outstanding employee experience.

Employee experience is the bedrock of modern HR best practices. Jacob Morgan makes the case that employee experience is the current evolutionary stage of organizational development [3]. In previous eras, employers focused on utility: making sure the employees had the necessary tools to perform their tasks. With the arrival of automation, the focus shifted to productivity: how to optimize employee tasks to outperform the competition. With the prevalence of knowledge work came the rise of employee engagement: the recognition that creative and innovative employees deliver their best work when happy and motivated.

And finally, in today’s globalized job market, companies that wish to attract and retain top talent must deliver a world-class employee experience. The employee experience begins with the first interaction between the candidate and the employer and ends with the exit interview. It is the overarching term for what it’s like to work in your organization, from the physical space to the technology you use, to the Learning and Development programs you offer, to the culture you promote.

Or, as Morgan puts it, “Employee experience is creating an organization where people want to show up.”

What Makes An Incredible Employee Experience?

To upgrade your employee experience, you need to focus your attention on 3 interlocking environments—physical space, digital technology, and corporate culture. These 3 environments create every experience an employee will have in your company.

1. Physical Space

Your office space can dictate a great deal about how your employees interact. Do you promote collaboration with open-plan offices or support focus with closed-door cubicles? How do you demonstrate your unique brand and company values within your office space?

The pandemic we’re currently living through presents additional challenges. How can you support interaction while preserving physical distancing? How will you help your employees feel safe? Will you be shifting to remote work?

2. Digital Technology

The tools and technologies you provide to your employees can make the difference between a great employee experience and a terrible one. Forcing your employees to use outdated or clunky software to do their jobs will have a major impact on both productivity and morale. By contrast, user-friendly, up-to-date technology will help onboard employees quickly and keep operational efficiency high.

Technology is also a key factor in monitoring, managing, and improving the employee experience. With the right tools in place, you can track people from their first application to their final exit interview, in the same way that you optimize the end-to-end customer journey.

3. Corporate Culture

To attract, inspire, and retain top talent, it’s key to build a company culture where employee engagement, satisfaction, and development are clearly placed front and center. Company culture can be somewhat intangible–Herb Kelleher described it as “what people do when nobody’s looking.” But culture is expressed in behaviors, which can be measured, encouraged, and developed. Creating a culture that supports the employee experience means taking a step back and considering which behaviors you wish to incentivize at all levels of the organization, and then designing systems to provide those incentives.

The 3 Keys Of A Great Employee Experience

Employee experience is a part of every business activity. Every meeting, every email, every interview, every action point, each interaction between you and your employees defines what it’s like to work in your company. However, we’d argue that to improve your overall employee experience, there are 3 key areas you should be focusing on.

1. Learning And Development

More than 1 in 3 workers, and nearly 50% of millennials, would leave a job that didn’t provide learning opportunities [4]. In other words, building a great employee experience must start with a strong L&D program.

This is why we evolved Learn Amp into a combined learning, engagement, and performance platform. It no longer makes sense to treat these spheres as separate. Employees who are learning, progressing, and developing in their chosen role are employees who are more engaged, and as a result, more productive. Employees who see that their employers are invested in their progress and growth feel valued, and in return deliver greater value to the employer.

2. Rapid Feedback

Employee engagement has become too often a question of perks and benefits—the cliché of the office with pool tables and free food. The employee experience is more complex—what it’s like to work in your company every day. Measuring employee experience is the only way to track and improve it. However, endless, wordy surveys just aren’t going to cut it. Survey results capture how employees feel at a single moment, but results can be skewed by recent events, or even the weather [5]!

To check on the employee experience you’re providing, you’d be better off with quick “pulse polls” or even single-answer surveys. At Hyland, for instance, employees are simply asked how likely they would be to refer a friend to the company. By getting constant feedback throughout the year, they can spot any drops in employee morale and move to address it. You can couple quick polls with focus groups, 360-degree performance reviews, even just casual conversations to get a full picture.

Make sure that all feedback is publicly addressed. There’s nothing worse than providing feedback and then feeling as if you’ve been ignored. That doesn’t mean that you have to give employees everything they’ve asked for. But be sure to communicate which employee requests you are responding to now, and which areas will have to wait until you have the time or the budget for them.

3.  Alignment

In their 2020 Human Capital Trends report, Deloitte suggests that creating an exceptional employee experience requires companies to foster a sense of belonging in their employees [6]. This can be best achieved by increasing the alignment between individual goals and company objectives:

​When workers appreciate how their individual work helps to advance goals they support and find meaningful, they will likely be more engaged, more motivated, and more likely to perform at a high level.

In today’s increasingly polarized world, with remote working on the rise, a positive employee experience depends on clearly communicating this alignment and sense of connection to each employee from Day 1.

To sum up, the employee experience you create is delivered across 3 environments—the physical, digital, and cultural. Creating a winning employee experience requires you to bring together Learning and Development, feedback and engagement, and alignment across the individual, team, and organization. Putting the whole picture together will collectively lead to better performance, better retention rates, higher employee lifetime value scores, and happier, healthier employees.

Improving the employee experience can be tricky. Learn Amp can help. We provide structure to the journey that each employee goes on and the ability to personalize and enrich each employee’s experience.


[1] Google, “What is employee lifetime value, and how can measuring ELTV improve your organization?” 2020

[2] Gallup, “What is employee engagement, and how do you improve it?” 2019

[3] Jacob Morgan, “The evolution of employee experience,” 2019

[4] Access Perks, “Millennial employee engagement and loyalty,” 2019

[5] SHRM, “Creating an optimal employee experience,” 2019

[6] Deloitte, Human Capital Trends 2020