Revenue protection is a crucial element of an organization's revenue-management infrastructure. Here's why it matters.

A diverse array of threats looms over every organization's revenue pipeline, making revenue protection a crucial element of an organization's revenue-management infrastructure. In contrast to revenue generators and revenue enablers, revenue protectors are employees who serve to guard and defend the revenue pipeline against fraud, theft, corruption, seizure and disruption. Keeping them engaged is crucial for optimal workforce and revenue management.

Revenue Protection

Revenue protector roles range from security guards, lawyers and auditors to human resources, cybersecurity and public relations personnel. They work to minimize nonoperating expenses arising from lawsuits, judgments and compliance and regulatory fines and penalties. Revenue protectors often rely on collaboration with each other to identify and remove workers who may be a source of problems that endanger revenue.

The trust bestowed upon revenue protectors can come at a premium. This makes it imperative for organizations to be aware of the costs of replacement ahead of time.

The Costs of Replacement

Strong competition in the jobs market means that organizations must understand the costs of replacing versus retaining revenue protectors. Measure the quantifiable revenue per employee (QRPE) by dividing the total amount of annual revenues by the total number of employees. The cost to replace this talent can be calculated by first dividing the QRPE by 255 workdays to determine the daily revenue loss. Then multiply this figure by the number of days it takes to fill the positions to determine what the cost of vacancy is for the organization.

A 50-employee company generating $4 million in annual revenues, for instance, has a QRPE of $80,000 per employee, $313.73 per day. If it takes 20 days to fill the position, the loss in revenue is $6,274.51. With this figure in mind, organizations can have a better handle on how they approach the recruitment and retention of these critical roles. Organizations should work toward establishing strategies to maintain the engagement levels of the people in these key positions — which at a bare minimum should include regularly recalibrating compensation and evaluating benefits packages.

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