Emotional Intelligence – The ROI

Recently I was at a conference organized and attended by folks in the human capital field. One of the presentations covered return on investment for human capital interventions. The cost of attrition is always used – and studies do indicate that the cost of unplanned attrition can be severe to companies. Both the amount of intellectual capital and social knowledge that leaves from someone who is a high performer and has been there for a while can be terribly long and difficult to substitute or replace. It may take as long as a year before someone can fill those shoes. And that is a one-year loss of productivity that the company is not always aware of from a quantifiable perspective.

Another variable often used is the cost of disengagement. Studies show that the average loss of productivity due to a disengaged employee is 2 hours with an average cost of $20/hr for that employee. Other studies show this is quite conservative and realistic numbers on both accounts are much higher. So, doing the math, just multiply the number of employees your have by $40 per day and that is what essentially a company wastes each day by uninspired or unmotivated employees.

Let’s throw in EQ. Studies show that an average negative experience exerts physiological effects on one’s body for approximately 4 hours (4 hours is how long the endorphins stay in your system). This means that if an employee gets a slightly negative email from a boss or a fellow employee, that for up to 4 hours, the employee’s optimal performance is compromised. Let’s say that the average worker has 2 negative experiences a day (perhaps someone cut them off in traffic on their way to work, for example), then essentially, that employee will be underperforming for the rest of the day – assuming an 8-hour workday. There could not be a more impressive business case for Emotional Intelligence than this. If working professionals specifically, and humans beings in general, do not appreciate the power of their own emotions and the impact they have, both positively and negatively, then a great deal of time and money is wasted each day in disengagement and underperformance.

The converse is equally true….what if a manager or leader orchestrates a positive experience for his/her staff? Could the positive endorphins also stay in the human body for a period of time to either dilute the negative experiences already in existence or enhance the overall body? Of course!! It is this ability to recognize and apply emotional acumen that is emotional intelligence. But that’s just one metric for demonstrating the value of EQ. What are some other ways of measuring the impact of emotional intelligence?

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2 responses to “Emotional Intelligence – The ROI

  1. Great way to view the impact on profit!

  2. Pingback: Death and EQ « Professional Development

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