The new ISO Guideline 30414 contains key organizational metrics that help executive leadership identify the costs, benefits, and outcomes from HR operations. If you are a portfolio manager or HR leader, you can show your financial executives just how important good HR management practices are to increasing the EBITDA value of your businesses. For example:

•  Assume the company has: 250 employees
•  Employee annual turnover: 16% (national average)
•  TOTAL cost of replacing an employee is: 0.75x annual wages
•  Annual wage is: $77,500 (national average, source: MarketWatch)

Let’s assume that BPHR does an audit of your HR practices and makes recommended changes leading to a modest reduction in employee turnover to 10%.

The annual savings for not replacing the 15 employees would be:
15 employees x 0.75 x. $77,500 = $872,000 added to EBITDA

The equity value would then be:
$872,000 x 7 = $6.1M, or an additional 11% in equity value.

This is just the beginning.  BPHR focuses on increasing financial performance through Human Resources operations. Our team of financial and HR executives will answer your questions and help you uncover more ways to increase EBITDA.

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Thank you, James Calver, for the insights!