The ROI of Hiring Top Talent: Compounding Assets

Many nutraceutical companies are watching every dollar, and labor costs are getting more attention. It’s natural to want to control costs wherever possible. Payroll is often the biggest expense on a P&L statement, especially for small to mid-sized companies.

It can be tempting for companies to treat people like commodities — an expense to spare and save on where possible. However, the kind of top talent who accelerates timelines, innovates with purpose, drives revenue, and attracts other A-Players can’t be viewed that way. People like that aren’t a “cost”; they are a compounding asset.

If you’re thinking of skipping out on a slightly over-budget hire just because “it’s not in the budget,” I’d encourage you to reconsider. I’d encourage you to reframe the question, “What will they cost me?” And instead ask, “What will my investment in this A-Player return over time?”

Paying More Gets You More

Let’s start with what the data already tells us: top performers aren’t just a little better than average employees. They’re exponentially better.

In complex roles like R&D, sales strategy, or operations management, the top 1% can deliver 8x more productivity than their peers. Even in more straightforward roles, star employees are at least 4x more effective than average performers.

So, when you “save money” by going with the cheaper candidate, you’re not saving 20%, you’re actually giving up a 200%+ return on a very small investment.

Elite professionals raise the bar for everyone around them. They mentor, challenge, and attract other high performers. They improve output, culture, reputation, and, obviously, profitability. Retaining them pays off over time.

Losing those people is expensive too. Gallup estimates the cost of replacing an individual employee to be at least 40% to 200% of their annual salary. When the person leaving is an A-Player? Multiply that cost by the opportunity loss.

The ROI Multipliers for Top Talent

Sales & Marketing

In sales, the top reps are rainmakers. They close deals that fund your next round of hiring. They bring in clients who stay for years.

Great marketers reposition your brand, find untapped customer segments, and make people feel good about spending money on your product or service.

That extra 20-30% in compensation is a mere drop in the bucket when the right person brings in millions in net-new revenue.

R&D

I’ve seen companies cut product development timelines in half after hiring a truly top-notch Director of R&D. Leaders at this level eliminate redundancies, streamline cross-functional handoffs, and resolve formulation issues early. The bottom-line impact is that these rockstars are worth many times their compensation.

Operations

It’s easy to overlook operations until something breaks — like a $2 million recall due to a preventable quality issue, or a 15% scrap rate that destroys your margins.

Hiring an overqualified Director of Operations or Plant Manager is some of the smartest money you can spend. When great ops leaders come in with fresh eyes and deep experience and redesign how the work gets done, it can be an absolute game-changer. It can shape the company’s trajectory in ways you’ve only dreamed about.

Formulas for Talent ROI

When you want to figure out the return on your talent investment, there are two formulas to consider:

1. Total Talent ROI (%) = (Value Delivered – Cost of Hire) ÷ Cost of Hire × 100

Let’s say you hire an A-Player of an R&D Manager at $160k, while the “budget” option would’ve cost $120k. Over 12 months, that top-tier hire cuts development costs by $80k, brings two new SKUs to market 3 months faster, and improves shelf performance across the board.

Value delivered in Year 1:

• $80,000 saved in development costs (reduced prototyping, fewer reformulations, streamlined ingredient sourcing, etc.);
• Two SKUs launched 3 months faster than previously able. If each SKU generates $50k per month that’s $300,000;
• Improved shelf performance (harder to quantify, but let’s conservatively say +$40,000 in reduced returns, complaints, or improved reorder rates).

If more optimistic assumptions are used, such as stronger SKU performance, additional cost savings, or other instances of value provided, the ROI could push even higher.

But here’s the best part: you didn’t spend $160,000 to get $420,000 in value, did you? The real investment is $40,000 above your original budget.

2. A-Player Budget Increase ROI = Value Delivered ÷ Compensation Difference

$420,000 ÷ $40,000 = 10.5x

In this instance, your investment saw a 10x return in the first year. If you’re only measuring salary, you’re missing the point. Talent ROI is big picture.

Top Talent Pays for Itself and It Keeps Paying

The second-best part is that the investment compounds again because with these fixes and processes in place your A-Player can create additional value elsewhere. Their ideas keep paying off and your business keeps reaping the benefits year after year.

In the nutraceutical industry, most companies don’t fail because they didn’t have enough ideas. They fail because they didn’t have good enough people to properly execute the ones that move the needle.

Cutting labor costs might look good in the short term, and sometimes it’s necessary, but it often ends up costing more in the long run. Playing it safe on hiring often means playing it small when it comes to growth.

Recruiter Bias Alert

Let’s address the elephant in the room; yes, I am a recruiter and the candidates’ salaries I place with my clients have a direct impact on whether I’m buying all organic or being a little more frugal with my grocery purchases. I’m acutely aware of my inherent bias and I want you to be aware that I’m aware.

The primary purpose of the nutraceutical industry, broadly speaking, is to enhance people’s lives through improving their health while making money in the process. I like to think of myself as a supplement to supplement companies; I enhance the lives of people, employers and candidates alike, while making everyone more money in the process.

The point I’m trying to make here (and clearly having too much fun in the process) is that we’re all in this to help improve certain areas of people’s lives. That’s my goal with this article.

A Change Will Do You Good

My aim is also to change the way you view what you pay for top talent. Viewing the 10%, 20%, or 30% more you’d pay to hire the best candidates as an unnecessary added expense is detrimental to your company’s growth.

So the next time you’re choosing between the candidate that’s “within budget” and the one who can actually transform your business, I hope you choose the latter. There are few investments your company can make that will consistently pay off like hiring an A-Player.

Top talent isn’t a cost. It’s your best-performing asset. Time after time, year after year, return after return.

About the Author: Buck Foley’s career path reflects adaptability, creativity, and a dedication to fostering professional growth. After earning an entertainment business degree from Columbia College in Chicago, he booked large music festivals and concerts as a talent buyer, honing skills in negotiation, coordination, and talent relations. After the pandemic shut down the live music industry in 2020, he transitioned to the field of recruiting, leveraging his expertise in matching talent to opportunities. Since founding Crescent Edge Consulting in 2024, Buck has focused on placing high-performing professionals within the nutraceutical industry.