How to Measure the ROI of an Employee Experience Platform

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We get it – it’s tough to show how internal communications and an Employee Experience Platform (EXP) truly benefit the business. How do you measure the real impact of better communication and engagement? It’s tricky to directly link these improvements to boosts in productivity or efficiency. But when you can show numbers, the benefits to stakeholders become crystal clear.

This guide will help you present these benefits in a way that even the most skeptical stakeholders will appreciate. With our ROI Impact Framework, you’ll turn abstract improvements into concrete dollar values, making it obvious how your project will economically benefit the organization.

Building a strong business case for an employee experience platform: the ROI Impact Framework

One of the best tools for this is the ROI Impact Framework. It translates improvements into dollar values, helping stakeholders see the financial benefits of your proposed projects. It’s your ticket to securing budget approval from decision-makers, like your CFO.

In this blog, we’re going to focus on one of the most common problems facing frontline teams: high turnover.  It also happens to have the clearest ROI and demonstrable track record of success after implementing an employee experience platform.

Step 1. Identify the problem (-s)

Alright, let’s dive in and pinpoint the headaches. First up, you gotta know what’s broken. Think of it like a game of whack-a-mole, but with business issues. If you don’t know which mole is the problem, you’ll just keep whacking blindly. So, let’s look at some juicy stats of employee turnover rates per industry:

  • Construction: 54%
  • Manufacturing: 37%
  • Trade, Transportation, and Utilities: 49%
  • Information: 32%
  • Financial activities: 29%
  • Professional & Business Services: 57%
  • Education & Health Services: 39%
  • Leisure & Hospitality: 79%
  • Government: 18%

These numbers are a cry for help. High turnover means higher costs and chaos. When employees feel disconnected, they’re more likely to ghost you. And who can blame them?

Poor employee experience, bad communication, scattered tools, and hard-to-find documentation are big culprits. When employees feel disconnected, their engagement and productivity take a hit. Crappy onboarding doesn’t help either – new hires who don’t get the company’s vibe and values are more likely to bail, thinking the company isn’t committed to them.

Step 2. Identify the Root Cause(s) of the Problem(s)

Ok, so you’ve identified a problem.  In this case, higher than acceptable turnover.  But what is the real cause of this problem?  And can you fix it?  This is the question your CFO is going to ask and it’s time to come with the receipts… 

Now is not the time to be careless – really think about what’s causing these problems.  If you’re paying below-market wages, you’ve got to fix that first.  If you’re not investing in the right safety programs and employee well-being, that should take priority.

But if you’re the 99% of companies that this doesn’t apply to, let’s go deep.

Example. The hidden impact of frontline managers on retention

According to a study by Workday, frontline managers are one of the largest contributors to frontline retention.  A good manager? Employees stick around. A bad one? They're outta there. Let’s break it down:

  • How do you scale positive frontline managers who support employees? Without proper training, managers might be clueless, making employees miserable. Inconsistent evaluations? Yep, unfair treatment city. No mentorship programs? Managers feel lost and pass that along to their teams. Yay, chaos!
  • How do you ensure they’re all aligned with the business goals? Poor communication means managers and employees are running in different directions. Misalignment, confusion, and disengagement – the holy trinity of workplace disasters.
  • How can you support frontline managers with the content and platform for supporting their teams? No digital platforms? Managers are stuck in the Stone Age. Miscommunication and lack of cohesion follow. Feedback mechanisms missing? Managers can't address team concerns, leading to grumpy employees.
  • How do you give managers the ability to have regular feedback with their teams, even when they’re not working the same shifts? Without regular check-ins and feedback tools, managers and employees are like ships passing in the night. This leads to missed issues and reduced engagement.
  • How do you empower frontline workers to do better work? No clear career paths? Employees feel stuck and unmotivated. No training or connection opportunities? Employees feel like cogs in a machine. Recognition programs missing? No motivation to go above and beyond.

You need a combo of smart process improvements and understanding the real issues to keep your team happy and engaged. That's why it's so crucial to dive deep into the root causes, because if you don't do that, then you'll just keep putting out fires instead of preventing them.

Step 3. Negative impact - look at the big picture

Next, evaluate how this is impacting your business by looking at the big picture. 

  • 3200 Full Time Employees
  • 15000 Part Time/Seasonal Ambassadors
  • Average Hourly Wage: $15.00
  • Average Hours Worked per PT/Seasonal Employee per Week: 15 (higher during peak season, amortized for an entire year)
  • Calculated Full-Time Equivalents (FTE): 8825 (based on the above)
  • Average Annual Wage Increase: 5%
  • Annual Turnover Rate: 25%
  • Average Cost to Replace One FTE: $4320

*SHRM reports the average cost to replace one FTE equals 20% of the annual salary.  For this calculation, we have assumed 15% of the FTE annual wages of $28,800, excluding benefits.  This is inclusive of ‘hard’ costs such as recruitment fees and salaries and ‘soft’ costs like impact on productivity, time to full proficiency in the position, and emotional toll of engagement dropping.

Using the figures above, we can assess the financial impact of employee turnover for the business:

  1. Total FTEs: Combining the 3200 full-time employees and the part-time/seasonal ambassadors (converted into FTEs), you have a total of 8825 FTEs.
  2. Turnover rate: That means with an annual turnover rate of 25%, you are looking at replacing 2206.25 FTEs each year.
  3. Total annual turnover cost is: 2206.25 FTEs×$4320/FTE=$9,534,000

Step 4. Position the Employee Experience Platform as the solution

Alright, time to dive into how the EXP (Employee Experience Platform) is going to save the day. This is the juicy part where you show exactly how the EXP tackles the issues head-on and boosts your operational efficiency.

Make sure to give specific examples of how an employee experience platform can solve problems:

  • It enhances communication, reducing feelings of isolation and ensuring everyone is on the same page
  • It boosts engagement by fostering a sense of belonging through employee recognition and feedback tools, improving employee satisfaction and retention. 
  • It provides structured employee onboarding, showing new hires the company cares and is committed to their growth, reducing early turnover.
  • By offering career development resources and regular public acknowledgment, the EXP helps employees see a clear career path, feel appreciated, and stay motivated.

These real-world examples make it crystal clear to stakeholders how the EXP can deliver specific, tangible benefits.

And hey, fun fact: An EXP is cheaper per employee than toilet paper (seriously, it is).

Step 5. Show Them The Money 💰

Now, let’s talk dollars and cents. Calculate the potential return on investment (ROI) to show the financial benefits of the EXP. This is crucial to demonstrate the value of the EXP and justify the investment.

Let’s continue with the same numbers we used in step 2 and calculate the ROI. By reducing turnover by just 1.25% - from 25% to 23.75% - you're saving 110 jobs every year.

This ROI  shows a killer return on investment, highlighting the major financial and operational wins from implementing the employee experience platform, including the big bucks saved by reducing turnover.

How to convince your CFO to invest in an Employee Experience Platform

Got a CFO who needs convincing? No problem. Arm yourself with real-world success stories and case studies. Show how other companies improved productivity, reduced turnover, and enhanced overall business performance with an EXP.

Read more about how to convince your CFO to invest in an employee experience platform

Here are the key 3 takeaways you need to remember when building your business case for an EXP

  1. Show the Financial Impact: Use our ROI Impact Framework.
  2. Address Objections: Have answers ready and back them up with examples.
  3. Align with Goals: Show how it fits the company’s big-picture strategy.

Ready to quantify the benefits a dedicated employee experience platform can bring to your organization? 

Plan a free demo with Speakap's employee experience platform today and see the difference. We'll help you identify your specific internal communication challenges and tailor a solution that drives measurable results.

Speakap doesn’t just show numbers; we empower you to build a thriving workplace environment where employees feel valued, informed, and empowered to contribute their best. 

Speakap empowers you to do your job even better.