For most companies people represent the highest asset, but also the highest cost. Making people better or more efficient at what they do without having to invest loads of cash is an obvious win for all companies caring about people. But making people better is a qualitative target. This text highlights the quantitative benefits of implementing a talent and knowledge sharing platform.
With such a platform employees can ask any question, advice, any specific short training, or share or assign a task, saving a lot of time every time they do. Each time they would have to go out for an external training, that might not be focused to the exact problem they are trying to solve and that would not be as effective they would like it to be, they would lose hours. Every time they would lose time trying to find the answer to their business problem by themselves, they now find it in minutes. Leveraging your company’s experts via a talent and knowledge sharing platform drives work completion quickly, efficiently and effectively.
Let’s try a very conservative quantitative approach to savings:
In a company of 1 000 employees, if everyone saves the equivalent of one hour of external training or consultancy during the year, the company saves between $65 000 and $120 000 each year.
Of course, as the training or help is given by an employee, the time spent by this employee is a cost for the company too. Although real life shows that most of the help, in average between 10 and 20 minutes, is given during lunch time or immediately after hours, we will take the full cost into account for this exercise. Also, on average, an expert spends 1 minute of his time where a requester would need 7,7 minutes. Thus, in an organization of 1 000 employees, if everyone exchanges 1 hour during a year, the company wins 7 700 hours in efficiency.
The platform requires a one time 5 minute investment from each user to indicate his skills. No training whatsoever is required and therefore no training cost has to be taken into account. SkillDeal provides communication templates to encourage platform usage and communication of the benefits to the new users. Thanks to this and a SSO integration included in the fixed fee, the cost of deploying and administrating the platform is immaterial.
This is the hypothesis for the above cost saving:
The cost for an external trainer balances between $100 and $125 per hour, an external consultant between $100 and $150 per hour. Average employee cost at $45 per hour. (41 EUR/H in Belgium — Industrial sector — in 2012).
Several SaaS cost models exist but we believe we got it right for both the customer and the supplier. This is new software and although the adoption rates are promising (read article on this next week), companies might fear to invest in solutions that might not turn out successful in their organization. The lines above show that the more the platform is used, the higher the ROI for the company. If the platform is not used, the risk of the investment should be reduced to a minimum. SkillDeal has adapted its platform price to this logic. There is a small entry fee which is not depending on the number of employees allowed to login and there is a capped utilization fee, guaranteeing that the ROI of the investment is in line with success, and that in case of poor adoption no harm is done. This fixed costs is outweighed from the 150th exchange showing a growing ROI for each additional exchange of knowledge or talent. For a company that has deployed the platform for 1 000 employees, 150 exchanges are as little as one out of 7 persons using the platform only once a year. Imagine how high the ROI would be when the platform is widely adopted and the majority of the employees use it on a regular basis.
In conclusion, next to the qualitative benefits, we see here a rare phenomenon of a platform showing a positive ROI without requiring to add the hard to quantify qualitative benefits into the equation.