The BLG Blog

Posts & articles that have helped thousands build performance through pragmatic leadership.

The Dollar Value of Leaders

Next time your boss gets mad at you, show him or her this chart.

According to the research presented–it takes an employer about $5,500 to replace one $8 dollar-an-hour employee. If you’re lucky enough to make more than $8 an hour–imagine what it would cost your company to replace you.

If I knew this a few years ago I would have been a far worse retail employee.

Anytime my manager would demand I that I put my cellphone away, I’d bring up the $5,500.

Anytime I’d be caught taking a long 15 minute break, I’d bring up the $5,500.

And if I happened to arrive late–I’d cough, $5,500.

I wonder how far that would have got me. Probably exactly where I am now. Sitting in an office, remincing about the good old days in retail where lunch breaks were one hour long, by law.

The graphic wants to warn small business and HR departments that firing and hiring aren’t cheap processes. Time and money goes into finding and training new people as well as making sure the person on the way out has all his paperwork in order.

But that’s obvious. However, seeing a dollar amount attached to the process makes the obvious startling.

The chart also revels something else, but not directly. It shows small buiness owners and HR departments the value of good leadership.

Good leaders create retention. People like good bosses that communicate goals, push movement, and create some space for creativivity. If people are happy, they tend to stick around.

Now we can look at the chart a different way.

Every talented leader creates value–$5,500 dollars or more of it–every time they rally a team together, get things done, and make people feel good about themselves.

Again, this might be obvious, but it’s helpful to see, in real dollars, how much money a good leader can save a company.



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