Employee Lifetime Value (ELTV) is a metric used in human resources management to estimate the financial value of an employee to an organization over the course of their career.
This metric takes into account a variety of factors, including the employee's salary and benefits, the cost of recruiting and training, and the potential revenue and profits generated by the employee's work.
ELTV can be a useful tool for organizations to evaluate the long-term benefits of investing in their employees. For example, a high ELTV for an employee may indicate that it is worth providing additional training or support to help them grow and succeed in their role. On the other hand, a low ELTV may indicate that it may be more cost-effective for the organization to replace the employee with someone else.
To calculate ELTV, organizations typically use a formula that takes into account the following factors:
It is important to note that ELTV is a forward-looking metric, as it is based on estimates and projections rather than actual data. As such, it should be used as a guide to help inform decision-making, rather than as a definitive measure of an employee's value.
Overall, ELTV is a valuable tool for organizations to evaluate the long-term financial benefits of investing in their employees. By taking into account the cost of recruiting and training, as well as the potential revenue and profits generated by employees, ELTV can help organizations make informed decisions about how to support and develop their workforce.
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