Redefine Your KPIs to Justify the ROI of Culture

When asked by a CFO or CEO about the ROI of culture, you need to reframe the question. Specifically, ask yourself what percent of the workforce is giving full effort. That’s a hard number, not a soft one.

Bobby Herrera, CEO of the $500-million Populus Group, wants HR leaders and executives to all think in terms of keeping people inspired, interested, and involved. That’s how you measure whether people are giving their full effort. No traditional KPI shows you that same outcome.

His proof that this works? Attrition at Populus Group ranks more than 50% below their industry. Customer NPS is more than 3x the industry average.

Based on Bobby’s interview on Culture Creators, here’s the framework you can use when a CFO or CEO asks you to justify the ROI of culture. This shifts the focus of key performance indicators to three human questions. It connects each to numbers finance already tracks, with guidance on where to find them and how to say them.

Reframe KPIs

Offer your leaders a second definition that sits underneath the traditional KPI: How well are we keeping people Inspired, Interested, and Involved? These represent leading indicators of the lagging numbers finance cares about.

Inspired

What it predicts: Discretionary effort and output. Inspired people do more than the job description requires.

Lagging metrics to cite: Revenue or output per employee, project velocity or on-time delivery, the percent of your engagement survey that agrees with a statement like, “I am willing to go above and beyond.”

Where to find your number: Your latest engagement or pulse survey, finance's revenue-per-head figure, and delivery data from your project tools.

What you can say about it: On our last survey, ____% of our people said they go above and beyond. Where that number is higher, our output per person follows it.

Interested

What it predicts: Engagement and growth. Interested people lean in, learn, and move up instead of checking out. People interested in their job don’t look for a new one.

Lagging metrics to cite: Engagement score trend, internal promotion and transfer rate, absenteeism and unplanned time off, participation in optional programs.

Where to find your number: Your HRIS for mobility and absence data, your engagement platform for the trend line, and program sign-up rates.

What you can say about it: We filled % of open roles internally last year. Every internal move saves us roughly $ in recruiting and ramp cost.

Involved

What it predicts: Retention. Involved people feel ownership, and owners stay.

Lagging metrics to cite: 12-month retention, regrettable attrition rate, cost per departure, and time-to-fill for the roles you lose.

Where to find your number: Your HRIS for retention and tenure and a cost-per-departure estimate (a common planning figure is one-half to two times annual salary; use your own if you have it).

Ready-to-say line: Each regrettable departure costs us about $____. Cutting that by even a handful of people pays for this several times over.

How to Talk About Culture ROI

Use these talking points to guide your conversation with a CFO or CEO.

Open by agreeing with them, not defending:

Remember, you’re on the same team. You’re not competing with each other or any other departments in the org. Start with a statement like: **“**You are right to want a return on this. Let me put it in numbers we already track.” Avoid defending culture as a feeling.

Introduce Inspired, Interested, Involved

Explain that culture is best measured by how well you keep people inspired, interested, and involved. Share that each one influences and contributes to a number on your dashboards.

Bring one real number per question

Even a single concrete internal figure beats a stack of national or aggregated stats. Your team has access to an endless amount of people data, so one per question (at least to start) keeps you focused. Specificity makes you credible.

If you’d like broader proof of culture and engagement and how both affect businesses, check out Nectar’s State of Company Culture Report. (We surveyed 12,000 employees about what makes them actually want to stay in a job — and a bunch of other things directly related to performance.) For instance, 83% of employees reported that recognition affects their motivation to succeed. That makes recognition a direct lever for performance.

Emphasize the trust

The reason any of this matters financially is trust. I’d bet you have at least one recent example where low trust slowed a decision or caused a delay in a project. Those hiccups translate to real dollars.

“The more trust we have, the faster decisions move and the less rework costs us. Culture is the mechanism that makes everything else cheaper.”

https://youtube.com/shorts/3Hkyba2e57c?si=wt-REplCE-kykG6m

HR Is a Business Partner

Need some extra evidence that HR can and should be a business partner? Bobby Herrera specifically slowed down growth at Populus Group in order to save the company’s culture. From his perspective, a poor culture foundation would only come back to haunt the team’s performance later on.

Watch his full interview on the Culture Creators YouTube channel.

https://www.youtube.com/watch?v=LenhEZAbvog

What Is Culture Creators?

Culture Creators is the podcast for people leaders who want more than inspiration. Each episode delivers proven strategies, real frameworks, and hard lessons behind building great workplace culture — straight from the world’s best CHROs, founders, and executives.

Subscribe to the Culture Creators newsletter.

‍