The Top 3 Costs Facing Companies – and How The Predictive Index Helps You Reduce Them

Running a business is all about managing costs while driving performance. For most organizations, three major expenses consistently rise to the top: labour, turnover, and operational inefficiency. These costs may look like “just numbers on a balance sheet,” but in reality, they stem directly from people-related challenges, mis-hires, disengagement, poor communication, or misaligned teams. The good news is that The Predictive Index reduces business costs by giving leaders the tools and insights they need to make smarter decisions about hiring, team alignment, and employee engagement. Delivered by Certified Elite Partner Predictive Success Corporation, PI is a scientifically validated, data-driven solution that helps businesses align people strategy with business strategy.

When you invest in the right people, in the right roles, working together effectively, the returns are tangible: lower expenses, higher productivity, and stronger business performance.

Let’s take a closer look at the top three costs most companies face and how PI directly addresses each one.

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1. Labour Costs Your Largest Business Expense

Why Labour Costs Matter

For most organizations, labour is the single largest operating expense, accounting for up to 70% of total costs. Salaries, benefits, hiring, training, and turnover all add up quickly. But what truly inflates labour costs isn’t simply “paying people”—it’s paying the wrong people, or paying people who aren’t engaged, productive, or aligned with your business goals.

A mis-hire alone can cost anywhere from $15,000 to over $100,000, depending on the role. Add in disengagement, low productivity, and turnover, and the numbers become staggering.

How The Predictive Index Reduces Labour Costs

This is where PI becomes a powerful cost-reduction tool.

• ✅ Hire Right the First Time – PI’s behavioural and cognitive assessments uncover whether candidates are naturally suited to a role before the job offer is made. This reduces the risk of costly mis-hires.

• ✅ Reduce Turnover – Employees who feel aligned with their role and company culture are more engaged and more likely to stay. PI ensures job fit from the beginning.

• ✅ Boost Productivity – Managers who understand employee behavioural drives can tailor coaching, feedback, and goal-setting to maximize performance.

• ✅ Optimize Teams – The PI Team Discovery tool helps leaders build teams that complement each other’s work styles, reducing friction and boosting collaboration.

Real-World Example

Consider a mid-sized manufacturing company hiring production supervisors. Without PI, hiring managers often relied on gut instinct, leading to frequent mis-hires. After implementing PI, they began screening candidates for problem-solving ability and natural leadership style. Within one year, turnover in the supervisor role dropped by 35%, saving the company hundreds of thousands of dollars in recruitment, retraining, and lost productivity.

👉 Key takeaway: By reducing mis-hires, improving retention, and driving higher productivity, The Predictive Index reduces business costs tied to labour your most significant line item.

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2. The Cost of Turnover – The Hidden Expense You Can’t Ignore

Why Turnover Costs Matter

Turnover is often underestimated because its costs are hidden. When an employee leaves, you’re not just replacing a salary—you’re paying for recruiting, retraining, lost productivity, cultural disruption, and sometimes even lost clients or customers.

On average, it costs between 30% and 150% of an employee’s salary to replace them. For specialized, sales, or leadership roles, the cost can be significantly higher.

How The Predictive Index Reduces Turnover Costs

• ✅ Better Onboarding & Role Clarity – With PI data, managers can clearly communicate behavioural expectations and align job responsibilities from day one, reducing ramp-up time.

• ✅ Succession Planning – PI identifies high-potential internal candidates who can step into bigger roles, minimizing the need for expensive external hires.

• ✅ Proactive Conflict Management – By understanding work styles, leaders can address potential clashes early, preventing the type of interpersonal friction that leads to exits.

Real-World Example

A financial services firm struggled with high turnover among its client-facing account managers. Exit interviews revealed frustration over unclear expectations and misalignment between personalities and role demands. After implementing PI, the firm aligned hiring with role behavioural requirements and used PI coaching for managers. Within 18 months, turnover decreased by 42%, while client satisfaction scores increased.

👉 Key takeaway: By improving onboarding, clarifying expectations, and building stronger succession pipelines, The Predictive Index reduces business costs tied to employee turnover.

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3. Operational Inefficiency & Misalignment – The Silent Profit Killer

Why Inefficiency Costs Matter

Even with the right people in place, companies lose money when teams are misaligned. Poor communication, unclear accountability, and disengagement slow decision-making and cause strategic initiatives to fail. The result? Missed deadlines, wasted budgets, and frustrated employees.

The cost of inefficiency is harder to measure than salaries or turnover, but research shows that disengaged employees alone cost businesses $450–550 billion annually in lost productivity.

How The Predictive Index Reduces Inefficiency

• ✅ Align People to Strategy – PI’s Strategy Assessment helps leaders put the right people in the right roles to execute business priorities effectively.

• ✅ Empower Managers – Instead of one-size-fits-all leadership, PI equips managers with data-driven insights to adapt their management style to each employee.

• ✅ Drive Engagement – By understanding what motivates employees, leaders can increase recognition, job satisfaction, and engagement all of which reduce inefficiency.

Real-World Example

A national retail chain was struggling with stalled growth despite having strong sales teams. An internal review revealed that managers weren’t aligned on strategic goals, leading to conflicting priorities across departments. Using PI’s Strategy Assessment, leadership identified behavioural misalignments and realigned teams to the company’s top initiatives. Within two quarters, project completion rates rose by 29%, and profitability improved.

👉 Key takeaway: By aligning talent to strategy and improving engagement, The Predictive Index reduces business costs caused by inefficiency and misalignment.

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🔍 Quick Recap

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Why This Matters Now

In today’s economy, organizations are being asked to do more with less. Rising wages, competitive markets, and shifting employee expectations make it critical for leaders to manage their people strategy with precision. Traditional approaches to hiring and management gut instinct, resumes, or “what’s worked before” are no longer enough.

Companies that adopt The Predictive Index, delivered by Predictive Success, gain a measurable advantage: the ability to reduce costs while improving culture, engagement, and performance.

This isn’t just HR optimization it’s business optimization.

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Final Thoughts

Every company faces the reality of high labour costs, the risk of turnover, and the drag of inefficiency. But companies that leverage The Predictive Index, delivered by Predictive Success, are better equipped to optimize their workforce, align people with strategy, and create lasting performance gains.

At the end of the day, The Predictive Index reduces business costs by turning people data into actionable insights helping organizations cut waste, improve engagement, and accelerate results.

When you align people strategy with business strategy, costs go down—and results go up.