The importance of Emotional Intelligence has come to the forefront in recent years. And rightfully so. Not handling unpleasant emotions well has a massive cost that is largely invisible on your budgets and balance sheets. Here are four areas where the price of a lack of emotional intelligence is extraordinarily high.
Emotional Intelligence in Customer Service
All customer-facing staff will inevitably encounter difficult customers. Whether in sales, customer service or reception, their level of emotional intelligence can make or break the customer’s relationship with the organisation.
It is well established that keeping a customer or client is far more cost-effective than acquiring new ones. It takes 12 positive customer experiences to make up for one negative experience. (Ruby Newell-Legner’s “Understanding Customers”). 78% of consumers will do business with companies again after a mistake if the customer service is excellent. (Salesforce Research).
Now let’s put some numbers to the cost of just one terrible customer service experience at a car dealership. In the UK, car owners keep their cars for up to six years on average. If they are happy with their dealership, they will likely return to the same dealership for their next vehicle. If we’d value that car at £20,000, losing that customer costs the dealership £20,000 in revenue every six years, not including the lost revenue for maintenance and repairs, potential referrals, and the cost of finding a new customer.
So the bad customer service experience quickly costs the dealership more than a year’s wage for the staff member who mistreated the customer because they could not deal with the emotional tension involved in complaint management.
None of that loss is visible on your balance sheet.
Emotional Intelligence in Peer Support
Every week I witness peer support. And more often than not, the lack of Emotional Intelligence plays out like this. A staff member had a very triggering experience and walked through the office ranting about it. Another staff member engages with said triggered colleague clearly with the intention to support.
Unfortunately, the support conversation ended with, “It’s part of the job, isn’t it?” At no point were the triggered colleague’s emotions and feelings validated, nor was recovery from the experience facilitated. With best intentions and a lack of EQ and skills, the helper failed to help. If such incidents reoccur, the triggered colleague will grow resentment or eventually burnout. The result can quickly be a long-term absence or even the loss of a valuable employee.
The cost? If the organisation offers sick pay, each day of absence potentially costs double the wages – for the ill person plus the person who has to compensate for the lost productivity. That extra pressure can have other knockoff effects.
If the triggered staff does not get the right support, they might eventually leave because they can no longer cope. In that case, the organisation faces the cost of recruiting and retraining, which leads to lower productivity for the people involved in the training.
Again, a year’s wage is very quickly on the line. Many of those escalating situations could have been avoided if people had learned to offer better peer support. Unfortunately, many organisations spend a lot of money on crisis response instead of crisis prevention.
Emotional Intelligence in Leadership
I don’t like the term “toxic leadership” simply because I don’t think anyone is toxic on purpose. There are always underlying issues and reasons that can be fixed with the proper support and willingness to learn.
However, if those leaders are not supported and trained well, “Get this f-ing folder, please” and other degrading language and behaviour can cause more harm than good. In such environments, high staff turnover, low morale and low productivity come hand-in-hand.
Research has shown that replacing a staff member costs about a year’s wage and does not include the cost of low morale and productivity.
It is almost unimaginable how much money is invisibly and avoidably wasted.
Yet, instead of investing in developing the emotional intelligence of leaders, many companies invest their hard-earned cash in behavioural change that does not provide the desired change. Emotionally intelligent leaders display emotionally intelligent behaviour naturally.
Emotional Intelligence in Training
47% of apprentices currently drop out of their apprenticeships in the UK. That figure had been rising from 33% in 2018. Many HR and L&D professionals know that they need to learn how to deal with apprentices who lack resilience and Emotional Intelligence but don’t know where to start.
Even if the organisation can take advantage of financial incentives like grants from the government, the training time and material costs are irrevocably wasted on every apprentice that drops out. Depending on the profession, those costs quickly go into the thousands of pounds.
Therefore, upskilling trainer staff to improve their ability to support the emotional development of apprentices is a profitable and necessary investment.
Conclusion
Investment in the emotional intelligence of your staff makes sense. Just stopping one of the above scenarios from happening every year outweighs the cost of an 8-hour emotional intelligence course for 100 staff members. It is a no-brainer.
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