How often have you heard the sentence: “our employees are our most important asset?”
You can hear lots of CEOs say this almost every single day but what they do in practice is actually very different, because, for many of them, it’s “profits first,” followed by customers and lastly employees.
If you don’t believe that, then just take a look at any employee engagement survey where engagement has been stuck at around 30 percent for the last decade and more.
This is short-sighted short-term thinking.
Here are six fabulous benefits of putting your people first.
1. Increased staff retention
Highly engaged employees are 87 percent less likely to leave your company than disengaged employees, according to a Hay Group study. Turnover not only has a disruptive effect on business and services but also adds an additional expense regarding recruiting, onboarding and training new employees.
Altogether, these issues can cost a company anywhere from 16 percent up to 213 percent of salary depending upon the role.
2. Higher productivity
Happy people are productive people, and highly engaged people fall right into that happy category. When employees are engaged at work, they feel a connection with the company; they believe that the work they’re doing is important, and that makes them work harder. According to Gallup, engaged employees outperform disengaged employees by 21 percent. In my experience, we would say that this is a conservative estimate, but even so, a 21 percent increase is a significant boost to productivity.
3. Bigger profits
Companies with engaged employees achieve much better profits: A study by Towers Perrin in 2008 showed that organizations with engaged employees experienced a 19 percent increase in operating income over a 12-month period, compared to a 33 percent decrease in companies with disengaged employees.
That’s a 51 percent difference in profitability between companies with engaged staff compared to those with disengaged staff.
4. Better company reputation
Staff members are the best ambassadors for the company. And what they say has a direct impact on company reputation. Employees who are happy and speak well about the company increase its reputation and attractiveness to other potential employees, as well as possible customers.
Whereas the opposite is also very true as disengaged employees will trash company reputation.
5. Increased customer satisfaction and retention
Richard Branson has said that “Clients do not come first; employees come first. If you take care of the employees, they will take care of your clients.” A study by Temkin in 2016 showed that companies which excelled at customer service had 1.5 times as many engaged staff than companies with poor customer experience.
If you want happier and more satisfied customers, you need more satisfied and engaged teams.
6. Lower stress
There are connections between happiness and stress relief. Not only are happy teams more productive, but they are also less stressed and stressful to other employees. And that’s a scenario which helps create a much healthier working environment.
Taking good care of employees, and ensuring that they are highly engaged shouldn’t just be an empty slogan for companies and their CEOs. It should be an active part of company strategy because as the above research illustrates, there are multiple benefits involved, which in turn help drive growth, profits and customer satisfaction — the goals of every company.