Lisa Raaijmakers
Data-driven HR: focusing on Employee Lifetime Value
Temp & flex
Platformization
Oct 4, 2025
In many organizations, HR is still focused on operational processes: filling vacancies, registering absenteeism, planning performance reviews. In today's tight labor market, that's not enough. “HR needs to be able to manage based on value,” says our labor market strategist Sepp Haans. “That only works if you see Employee Lifetime Value as your most important KPI.”
What exactly is ELTV?
“The Employee Lifetime Value measures the total value an employee adds to the organization throughout their employment,” Sepp explains. “It's comparable to the well-known marketing term Customer Lifetime Value, but for employees instead of customers.”
ELTV brings together three components:
Productivity: efforts that measurably contribute to revenue or projects. Think of quality, efficiency, and customer value.
Tenure: the longer someone stays, the greater the expertise and the better initial costs are spread.
Engagement: commitment that contributes to team development and culture.
You then subtract the costs of recruitment, onboarding, training, and retention. What remains shows how healthy your organization is. A high ELTV means people contribute longer, more motivated, and more valuably.
From measuring to steering
ELTV is more than a measurement tool; it's a strategic KPI. “It makes visible where HR makes a difference in growth, culture, and productivity,” according to Sepp. “And it provides concrete arguments to direction or IT departments to invest in the right training, team building, and tools.”
“To maintain a grip on ELTV as a KPI, it's important to create insight with data that is connected and usable,” says Sepp. “By smartly linking data, the entire employee journey becomes transparent.” For example:
Recruitment: what are the costs of recruiting, and how effective is your campaign?
Onboarding: how quickly does an employee become productive?
Development: which learning activities demonstrably contribute to performance?
Engagement: how satisfied and engaged are employees after six or twelve months?
Exit: what do you learn from reasons for departure?
Alumni relations: is there still value after departure, for instance as an ambassador or customer?
Bringing data together in one system
By connecting all data in one digital ecosystem, a complete picture emerges of the value people deliver and the opportunities to increase that value. It makes the Employee Lifetime Value not only transparent but also helps HR substantiate where value is created and where it remains untapped. “Technology must support HR and your ELTV,” Sepp emphasizes. Those who steer on value turn HR from recording to guiding.