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Jobs: What’s the ROI to Create or Save One?

Jobs for auto industry -- what are they worthJobs: What do they cost?

What’s it cost to create a job…or to save a job? What is the ROI for that job?

Members of the US Senate voted against a $14 billion loan for the Big Three automakers.

There are roughly 830,000 jobs tied directly to the Big Three car makers. 230,000 workers are directly employed by the Big Three. Another 600,000 are employed directly by the auto parts supplier industry. – NY Times. [1]

The message with this vote was that…these 830,000 jobs are not worth $16,000 +/- each to keep. ($14 billion/830,000 jobs = $16,000 +change.)

The  230,000 jobs directly with each Big Three car maker are not worth $61,000 each. Too expensive, they say. Where would we see a return on that investment?

However, in Tennessee, brand new jobs in auto manufacturers are worth $250,000 each.  Volkswagen received upwards of $500 million in assistance from the state of Tennessee and local governments to build a plant which would create 2000 jobs at the plant.

Volkswagen says the plant will cost them $1 billion to build. For them, the cost for each of these 2000 jobs at this plant is…$500,000 each.

That’s a total of $750,000 combined to create one job.  What’s the ROI for these jobs? The bigger question may be: How do they generate it?

Chattanooga Chamber of Commerce

Chattanooga Times Free-Press

You could do it cheaper, couldn’t you? Couldn’t you create or save a job for less than this?

What would it cost to add or save one job?

How much additional cash-flow would you need?

Where do you find that extra cash?….revenues added, costs reduced, equity investments, assets sold, liabilities retired, additional bank loans, corporate bonds …

How much will it cost to create the plan, connect it with their goals and your company goals? ( Those two are simpatico, right? )

How much will it cost your existing employees? Will pay raises be frozen, incentives be lowered? Will more career opportunities be generated?

How much new equipment will be needed?

How much of your time will be required? Do you have the time? Or, will you sacrifice time from your current tasks? If the latter, add that to the cost.

What’s your ROI? Not as a percentage, but…what will be returned on your investment? A career for one person, an opportunity for several, growth for all in your company, bonuses, health insurance as a paid benefit?

What is the ROI for your community from this job you created or saved? Safety, security, better schools, better restaurants, better roads, a future for your community?

How would your company measure the loss of but one job? What about your community?

And, at what point does it matter? Consider the ratio one layoff : one company….That’s odd, we say. 10 : 10…That’s not good, we say. 100 from 100….? As a nation, we’re way past the ratio of 100 : 100. 100 jobs lost at 100 companies.  We’re sailing past 1000’s : 1000’s.

If you’ve read this far, you are either aggravated at the time wasted or hopeful I have some answers. I don’t. At least, quantitatively.  I could, though. But it doesn’t seem necessary does it? The numbers seem self-evident. You can find new numbers with every morning’s news.

I’ll say this, though, small business can create jobs more effectively, more cost-effectively, and generate the higher ROI as compared to the plans of big business, domestic or international, working with government, local or national.

We all have to be clear, now, in our answers to this question:  What’s the ROI to create or save one ? For the employee, our company, our community…yes, our country.

What do you say? What’s a job worth? What rate of return is required?

Our answers create the solution and the plan to move out of this recession.

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Zane SafritAbout the author: Zane Safrit’s passion is small business and the operations excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. He previously served as CEO of Conference Calls Unlimited. Zanes blog can be found at Zane Safrit [2].