Insight into the financial impact of investing in people

Bottom line impact
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Angelo Piccirillo is partner and co-founder at conveyancing firm AVRillo. The company ranked 12th in the Great Place to Work Best Workplaces list for 2017 and is a strong supporter of proving the value of investing in your piece. In this interview Angelo tells us about how best to go about proving the value.

Jamie Lawrence, Editor, HRZone: Why do so many companies struggle to prove the financial impact of investing in people?

Angelo Piccirillo, Partner, AVRillo: The majority of companies struggle because many look for immediate financial rewards.

They analyse profit and loss based on income and expenditure from month to month. Larger accountant-led companies focus on the immediate financial impact.

Small businesses often have insufficient, or believe they have, insufficient recourses to invest in people.

This has been worse since the 2008 economic crash, which the UK has not really recovered from, and also because of post-Brexit uncertainty in the economy.

Investing in people with a view to increase financial returns for the company requires a different kind of management thinking with strategic planning for at least two years, although a five-year plan is better.

It also needs a short-term drop in financial returns whilst investing in people, structure and processes.

Jamie Lawrence, Editor, HRZone: When did you start to make progress with measuring the financial impact of investing in people?

Angelo Piccirillo, Partner, AVRillo: Four years ago we started to look outside our own legal industry, and to learn about the most successful people-led businesses, such as Apple, John Lewis and Virgin Atlantic.

We took advice from senior management consultants, including speaking to keynote speakers of the calibre of those involved in turning Asda around and other big businesses.

They preached a change in management from a Dickensian, dictatorial style, to a pull structure, of giving responsibility to staff, leading by example and pulling your staff along to excel themselves and be the best they can be.

We started measuring our financial success based on this management three years ago.

Jamie Lawrence, Editor, HRZone: How do you choose metrics to use and how do you ensure your measurement is robust?

Angelo Piccirillo, Partner, AVRillo: We have many metrics in place, but these are just five:

3.1): Net promotor score.

Ours has increased to +65 (which is one of the highest NPS scores in the world).

In comparison: 

  • Wonga -80;
  • MacDonald’s -37;
  • Costa Coffee +17;
  • Waitrose +43
  • Apple circa +69 and
  • John Lewis circa + 70.

3.2): TINYpulse

This is where TINYpulse ask each of our staff one question every Wednesday, in confidence. Those results are fed back to management and the entire staff. Nothing is kept secret. We run an open company.

Staff also get to give suggestions in confidence. To give negative as well as positive feedback.

This openness is scoring us above the best UK engaged staff

3.3): Independent surveys/analysis from Great Place to Work

This asks employees many questions, from trust in management, to the extent they're listened to and heard, to how much management takes action on suggestions, how much they are paid etc. It is a rigorous process.

Last year we came 17th in the top 100 and this year we came 12th in the top 100.

3.4): Investors in People

Auditors judge us by interviewing our staff.

One of the reports commented that we have created 'mini AVRillo generals' in every member of staff.

Jamie Lawrence, Editor, HRZone: What advice would you give to organisations looking to replicate your success in measuring the financial impact of investing in people?

Angelo Piccirillo, Partner, AVRillo: The advice is:

  1. Firstly, it works, our profits have increased year-on-year
  2. Secondly, it's difficult to start, so don’t be put off. It was difficult for us
  3. Thirdly, pick a date and start it
  4. Fourthly, appoint a head person to work on the business and not in the business
  5. Fifthly, you have to give up some of your short-term profit for long-term profit
  6. Sixthly, spend time training your staff, at least weekly
  7. Seventhly, have regular one-to-ones.
  8. Eighthly, invest time in actually understanding your staff: what they want to achieve within work, outside work and how you can help them. We have a dream manager process where we try to help them achieve their outside goals inside the firm i.e. with a slimming club, or counselling help if they are anxious in driving, or by encouraging them to finish on time etc.

About Jamie Lawrence

Jamie Lawrence, HRZone

Jamie Lawrence is editor of global online HR publication and community HRZone.com. He is committed to driving forward the HR agenda and making sure that HR directors have the knowledge and insight necessary to make HR felt across the whole organisation. He regularly speaks to audiences of 250+ and has interviewed key HR industry names, including Daniel H. Pink. He has worked previously as a small business journalist and a copywriter and has published non-fiction that reached #2 on the NYT Children's Bestseller List. In his spare time Jamie likes writing fiction, films, fitness and eating out.

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