Return on investment in corporate social network (part 2)
Two examples of calculating the financial benefits of implementing a corporate social network
In the last article, we started the topic of assessing the benefits of implementing a corporate social network and brought different opinions of social software developers. It turned out that some of them offer to evaluate not only the quantitative parameters of the results of this implementation, but also qualitative ones, for example, the quality of decisions made, the implementation of new capabilities, performance indicators of the monitoring system, etc. We’ll talk about these parameters another time, but today we’ll dwell on financial analysis of the effect of introducing a corporate social network.
For example, take the industrial holding XXX, which employs about 30,000 people. Based on their industry average indicators, we will assume that 30% of the staff, that is, 9,000 people, are provided with computers. The average salary of employees of the holding with taxes is 40,000 rubles. The employee turnover rate in the holding is 10%.
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The internal customer of the corporate social network is the human resources department, which is trying to achieve with it the target indicator - an increase in the level of staff involvement, and in addition to this, expand the profile of the search and talent management system to ordinary employees. The Director of Human Resources also seeks to support the strategic initiatives of the holding : constant search and implementation of more advanced technological solutions, increasing business transparency through improved feedback from employees to management, and employee participation in the holding's charitable foundation.
The calculation was made based on the assumption that the corporate social network helps to significantly increase employee engagement, which leads to an increase in labor productivity (which has been repeatedly confirmed by the cases of different companies).
Personnel involvement is assessed by HR department based on the results of the annual survey of the holding's employees. Let us assume that the Directorate is faced with the task of increasing the current figure by 5%.
According to Gallup reports, the companies involved, that is, companies with an engagement level of 100%, have 18% more staff productivity than companies with an engagement level of 0%. Due to the increased labor productivity, the achievement of the same result of the industrial holding XXX is spent at 100% -100% / (100% + 18%) = 15% less working time.
The wage fund of office workers, to which the efficiency indicator is primarily applicable, is 40000 r / month * 12 months * 9000 people = 4.32 billion p / year.
Time savings from increased staff involvement, expressed through the wage fund, will be 4 billion 320 million p / y * 5% increase in engagement * 15% saving of time = 32.4 million p / year.
We believe that only half of the time saved will be devoted to work. Total we get a benefit of 32.4 million rubles / year * 50% = 16.2 million rubles / year.
Thus, the introduction of a corporate social network saves 16.2 million rubles a year. But this is true provided that the 5% increase in engagement is completely due to her. In fact, this is a complex of HR management measures, which leads to a cumulative result. In this case, the resulting figure should be reduced in accordance with the extent to which the impact of the corporate social network in the overall set of measures.
To eliminate subjective analysis, consultants from Forrester Research have proposed a method that relies on indicators of user activity on the corporate social network. They found that highly involved employees use the system at least once a day, and middle-involved employees use the system at least once a week. According to a conservative estimate of Forrester, a highly involved employee saves 30 hours a year thanks to the system, and an average involved employee saves 15 hours a year. Thus, by measuring the indicators of user activity on the network, it is possible to estimate the increase in productivity. Here, for example, we took an adequate estimate in our opinion of 10% of highly-involved and 20% of average-involved users after a year of using the corporate social network.
Thus, the savings amount to 6.57 million rubles per year.
Additionally, the financial analysis can include a quantitative assessment of the reduction in staff turnover and, consequently, savings on the search and adaptation of new employees, given the calculation of the reduction in the adaptation time of new employees. Or assess the reduction in the number of overlapping projects. Estimates of these parameters, which I did for myself, increase the above benefit slightly, not exceeding 30%.
Of course, these approaches have some assumptions: 50% increase in the level of productivity of the employees involved, low costs for staff cuts (if fewer employees can perform the same front line through a social network), or other reasons (the inability to fire low-productivity employees).
In general, our task was to give an example of financial calculation of the benefits from the introduction of a corporate social network, the specific conditions for its implementation depend on each company. Whether or not to use this approach is up to you.
To be continued…
Vladimir Ivanitsa
viva@supereon.ru
In the last article, we started the topic of assessing the benefits of implementing a corporate social network and brought different opinions of social software developers. It turned out that some of them offer to evaluate not only the quantitative parameters of the results of this implementation, but also qualitative ones, for example, the quality of decisions made, the implementation of new capabilities, performance indicators of the monitoring system, etc. We’ll talk about these parameters another time, but today we’ll dwell on financial analysis of the effect of introducing a corporate social network.
For example, take the industrial holding XXX, which employs about 30,000 people. Based on their industry average indicators, we will assume that 30% of the staff, that is, 9,000 people, are provided with computers. The average salary of employees of the holding with taxes is 40,000 rubles. The employee turnover rate in the holding is 10%.
')
The internal customer of the corporate social network is the human resources department, which is trying to achieve with it the target indicator - an increase in the level of staff involvement, and in addition to this, expand the profile of the search and talent management system to ordinary employees. The Director of Human Resources also seeks to support the strategic initiatives of the holding : constant search and implementation of more advanced technological solutions, increasing business transparency through improved feedback from employees to management, and employee participation in the holding's charitable foundation.
The calculation was made based on the assumption that the corporate social network helps to significantly increase employee engagement, which leads to an increase in labor productivity (which has been repeatedly confirmed by the cases of different companies).
Involvement of staff. Method number 1.
Personnel involvement is assessed by HR department based on the results of the annual survey of the holding's employees. Let us assume that the Directorate is faced with the task of increasing the current figure by 5%.
According to Gallup reports, the companies involved, that is, companies with an engagement level of 100%, have 18% more staff productivity than companies with an engagement level of 0%. Due to the increased labor productivity, the achievement of the same result of the industrial holding XXX is spent at 100% -100% / (100% + 18%) = 15% less working time.
The wage fund of office workers, to which the efficiency indicator is primarily applicable, is 40000 r / month * 12 months * 9000 people = 4.32 billion p / year.
Time savings from increased staff involvement, expressed through the wage fund, will be 4 billion 320 million p / y * 5% increase in engagement * 15% saving of time = 32.4 million p / year.
We believe that only half of the time saved will be devoted to work. Total we get a benefit of 32.4 million rubles / year * 50% = 16.2 million rubles / year.
| No | Metrics | Formula | In year |
| IN 1 | Number of active users | 9,000 people | |
| AT 2 | Average salary, including taxes | 40 000 r. | |
| IN 3 | Increased involvement | five% | |
| AT 4 | Increased productivity (reduced working time) | 100% -100% / 118% | 15% |
| AT 5 | Loss of time saved | 50% | |
| Increase productivity | B1 * B2 * 12 * B3 * B4 * B5 | 16,200,000 p. |
Thus, the introduction of a corporate social network saves 16.2 million rubles a year. But this is true provided that the 5% increase in engagement is completely due to her. In fact, this is a complex of HR management measures, which leads to a cumulative result. In this case, the resulting figure should be reduced in accordance with the extent to which the impact of the corporate social network in the overall set of measures.
Involvement of staff. Method number 2.
To eliminate subjective analysis, consultants from Forrester Research have proposed a method that relies on indicators of user activity on the corporate social network. They found that highly involved employees use the system at least once a day, and middle-involved employees use the system at least once a week. According to a conservative estimate of Forrester, a highly involved employee saves 30 hours a year thanks to the system, and an average involved employee saves 15 hours a year. Thus, by measuring the indicators of user activity on the network, it is possible to estimate the increase in productivity. Here, for example, we took an adequate estimate in our opinion of 10% of highly-involved and 20% of average-involved users after a year of using the corporate social network.
| No | Metrics | Formula | In year |
| F1 | Number of active users | 9,000 | |
| F2 | Average salary, including taxes | 40 000 r. | |
| F31 | Share of highly involved users | ten% | |
| F32 | Share of average involved users | 20% | |
| F41 | Increase the productivity of highly involved employees | 30 of 1970 hours per year | 1.52% |
| F42 | Increase the productivity of medium-involved employees | 15 of 1970 hours per year | 0.76% |
| F5 | Loss of time saved | 50% | |
| Increase productivity | F1 * F2 * 12 * F5 * (F31 * F41 + F32 * F42) | 6 566 4 00 p. |
Thus, the savings amount to 6.57 million rubles per year.
Additionally, the financial analysis can include a quantitative assessment of the reduction in staff turnover and, consequently, savings on the search and adaptation of new employees, given the calculation of the reduction in the adaptation time of new employees. Or assess the reduction in the number of overlapping projects. Estimates of these parameters, which I did for myself, increase the above benefit slightly, not exceeding 30%.
Of course, these approaches have some assumptions: 50% increase in the level of productivity of the employees involved, low costs for staff cuts (if fewer employees can perform the same front line through a social network), or other reasons (the inability to fire low-productivity employees).
In general, our task was to give an example of financial calculation of the benefits from the introduction of a corporate social network, the specific conditions for its implementation depend on each company. Whether or not to use this approach is up to you.
To be continued…
Vladimir Ivanitsa
viva@supereon.ru
Source: https://habr.com/ru/post/291822/
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