Work

A model for measuring the employee lifetime value

Year: 2025

Type: article

Abstract: This study presents the development and validation of a comprehensive model to measure Employee Lifetime Value (ELV), a metric that captures the total worth of an employee to an organization, encompassing both tangible and intangible contributions. Drawing inspiration from the Customer Lifetime Value (CLV) framework, this research adapts its variables to an employee-centric context and grounds the model in Human Capital Theory, Social Exchange Theory, and the Job Demand-Resource Model. Using the mixed-method approach, the model was developed through theoretical analysis and expert validation, and subsequently tested as a case study within a private commercial bank. Data from a 360-degree feedback system and Analytics Hierarchy Process (AHP), with variable weights determined using the Saaty Scale, were used for empirical validation. The findings reveal significant disparities in ELV among employees, with most scoring low and only a few exhibiting high lifetime values, which underscores the need for tailored human resource management strategies. This research provides actionable insights for workforce segmentation, resource allocation, and retention planning. By offering a novel and practical tool, this study not only fills a gap in HRM literature, but also empowers organizations to develop value-driven approaches for optimizing workforce management, fostering engagement, and achieving long-term success.

Source: Cogent Business & Management

DOI: 10.1080/23311975.2025.2475985

Authors: Parisa Fallahzadeh, Neda Abdolvand, Saeedeh Rajaei Harandi, Mahmood Shah

Institutions: Alzahra University, Northumbria University

Language: English

Topic: AI and HR Technologies

Subfield: Organizational Behavior and Human Resource Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,165