1. ELTV isn’t a silver bullet — it’s a conversation starter

The point of tracking ELTV isn’t to get a single “perfect” number. It’s to get people teams thinking more deeply about the cost and value of employees over time.

“Data is a compass point, not a map. It points you in a direction — it’s not something you blindly follow without context.” – Jessica Zwaan

When you run the calculation, you’ll uncover gaps in data, questions about attribution, and the nuances of how your company really operates. That process is as valuable as the final metric.

2.  You can (and should) adapt the formula to your company

Like CAC in marketing, there’s no single way to calculate ELTV. You decide which costs to include — recruitment ads, ATS, onboarding, swag, L&D, benefits, etc. — and you decide whether to measure value in revenue, EBITDA, or future growth.

“The lifetime value is the hard part. The cost side is easy — the real work is deciding what ‘value’ means in your context.” – Jessica Zwaan

Consistency is key: once you choose a method, stick with it long enough to see trends.

3.  Track multiple versions based on your strategy

Jessica recommends three approaches depending on company stage and priorities:

• EBITDA-based for profitability-focused companies
• Revenue-based for growth-stage orgs with a performance history
• Forecast-based for early-stage orgs projecting future growth

If you’re in growth-at-all-cost mode, revenue may be your leading indicator. If profitability is paramount, EBITDA should lead.

4.  Granularity beats perfection

You can calculate ELTV at the company level, but it’s even more powerful when broken down by team, department, or cohort.

You’ll spot where hiring produces outsized returns — and where it doesn’t.

“There’s stuff you’ll never be able to capture — like the halo effect of an incredible employee. But the patterns you do see are what matter.” – Jessica Zwaan

5. Use ELTV to speak the CEO/CFO’s language

If finance leaders already track CAC, LTV, and ROI, ELTV puts people decisions on the same playing field.

It makes the trade-offs clear: should we hire now, invest in retention, or restructure?

“Knowing how much it costs to have one employee work for you for a year is critical — not just for this metric, but for promotions, performance decisions, and beyond.” – Jessica Zwaan

See you next week!

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