You often hear CEOs and business owners assert in business fora and interviews that they attribute their success on their people—their most valuable asset.
While modern day thinkers, consultants and the so-called experts may dismiss this aphorism as an old cliché and product of outdated thinking, there is no denying that it is still as relevant as ever. Your people, your employees champion your business and determine the success or failure of it.
To highlight the importance of people in the business, Mary Kay Ash, American businesswoman and founder of Mary Kay Cosmetics once said:
“People are definitely a company’s greatest asset. It doesn’t make any difference whether the company’s product is cars or cosmetics. A company is only as good as the people it keeps.”
Yet sadly, in today’s profit driven business landscape, there are still organizations and businesses that take their people for granted and treat them poorly. They tend to overly focus on the bottom-line. They view their employees as profit-making machines.
Their goal is how to increase shareholder value at all costs. And in the pursuit of this goal, employees are constantly pushed beyond their limits, leaving them stressed, feeling unimportant and neglected.
Link Between Employee Satisfaction and Company Performance
As a result, employees become unmotivated and disengaged affecting their performance and productivity. Disengaged employees reach a point where they no longer care and will no longer have the initiative to go the extra mile in solving problems. They will end up treating the customers that way they are being treated in the workplace.
Service quality deteriorates leading to customer complaints from unsatisfied customers ultimately affecting company performance. As employee disengagement grows, so does the risk of talent loss.
In fact, there are research and studies that establish economic linkage between employee satisfaction and the financial performance of the company. Consider these:
- According to research conducted by Gallup, the decreased productivity of each disengaged employee costs each employer up to $10,000 in salary. Overall cost to the US economy is estimated at a staggering $ 350 billion in lost productivity per year as a result of poor performance and absenteeism.
- Other relevant research conducted by PeopleMetrics demonstrated that highly profitable companies have 50% more engaged employees versus unprofitable companies. Teams with high levels of engagement sell over 20% than teams with low engagement.
- It costs an employer an average of 33% of an employee’s yearly salary for their exit. The process of finding the best talent to replace those who quit entails costs such as advertising job posting and engaging recruitment agencies. This adds up to the considerable time and energy spent in screening, interviews and hiring.
Based on the above research studies, it has become increasingly clear that employee disengagement drags down the financial performance of the business.
Investing in your people a must
If you are one of the business leaders that put little significance on your people and downplay their contributions to the success of your business, think again before it’s too late. Never fail to recognize that your people bring life to your business. Your business is only as good as the people you keep.
Therefore, invest in them. Create a work atmosphere where they can thrive and provide them with the tools and support for them to be able to optimize their performance.
No matter what the size your business is, success is the result of consistent efforts put in by your happy and valued employees. Investing in your employees is an important part in creating an engaged workforce and an effective way of reducing turnover for your business. It can lead to huge returns in terms of business profitability, reputation and growth.
Conversely, if your organization does not have happy and satisfied employees, they will not deliver performance-oriented results Which means reduced profits to your organization.
When it comes to investing in people, monetary costs automatically come to mind. This thought drives many business leaders to put their people improvement plans on the back burner.
However, it does not merely entail monetary costs but also involve some non-monetary initiatives that allow your people to have the feeling of being valued and taken care of.
There is no one size fits all for investing in people, but the best practices outlined below are useful to kickstart your people investment initiatives.
Invest in Training and Training and Development
The most common reason for high attrition rate is that employees are not being given enough opportunities to grow professionally or personally within their organization. Employees can interpret your unwillingness to invest in training as a disregard for their professional development. Today, you cannot expect your people to stay with your company if they can see limited opportunity for progression.
Statistics show that when an employee does not feel valued at work, 76% look for another job opportunity elsewhere. Training your employees is one of the most effective motivators to retain them.
By training them, you are enhancing their capability and boosting their confidence in handling their roles efficiently and effectively.
This will make them more loyal to your company and loyal employees are more engaged, motivated and productive within their roles. It is important to make sure you are offering these types of opportunities, so they feel like they have something to look forward to.
Henry Ford aptly put it:
“The only thing worse than training your employees and having them leave is not training them and having them stay.“
Provide a Meaningful Onboarding Experience
Onboarding is a process of integrating a new employee with a company and its culture. It involves a series of events that helps new hires understand how to be successful in their day-to-day job and how their work contributes to the overall business.
It is a means of fostering employee engagement at the outset as it affords the new hire tools and information needed to become a productive member of the team.
The onboarding process allows integration of new hires quickly and gets them invested in their day-to-day roles. It also allows a new employee to be comfortable with their roles and responsibilities before actual work begins.
An onboarding plan should focus on what matters most to each department with the goal of helping new employees make connections between company-wide goals and their day-to-day tasks.
Create Feedback Mechanism
Investing in your people means creating a feedback mechanism wherein your employees are free to speak up to voice their concerns especially when something is not working for them. You should not wait for your employees to turn in their resignations to realize how unhappy they are in the workplace.
Clear and continuous communication is essential for a positive working relationship. Your employees need to understand what you want them to accomplish and as an employer you should have a clear idea of what they expect from you.
To underscore the importance of feedback mechanism to your business, Tinypulse retention report showed that there is a 16% decrease in retention rates for employees who aren’t comfortable giving upward feedback.
Thus, regularly communicating employee thoughts to management should be strongly encouraged in order to understand the needs and make improvements. You should ensure that your employee feels their feedback is appreciated, heard and acted upon.
One of the most effective ways of getting employee insight is through a survey method. Job satisfaction survey questions and questions on areas for improvement can provide valuable insights, identify potential problems at the outset, and address them quickly before they escalate.
Practice Work Life Balance
Investing in your people means taking care of their overall wellness. You need to realize that your employees have their own lives outside their work. They have relationships to maintain, sports and activities to engage in and social life to enjoy. If you keep asking more from your employees, they won’t stick around for long.
Here are some tips:
- Do your best to avoid scheduling back-to-back long shifts or asking them to work regular overtime.
- As much as possible avoid calling them for job related matters during their day-off. Give them space and breathing room allowing them to recharge.
- Be flexible when your employees request time off.
- Ensure that there must be adequate staffing levels to cover the workload.
Looking after the economic well-being of your employees is another way of investing in them. That means compensating them competitively commensurate with their roles and responsibilities.
Paying minimum wage may not be enough to attract the best candidates to handle the job requirements of your business. Revisit your pay scale yearly and give a raise if you can as your finances would allow. Add non-monetary extra benefits if you are able to give a raise.
Promote Positive Workplace Culture
Culture is the very air you breathe. If it’s toxic your organization dies. A positive workplace culture improves teamwork, raises morale, increases productivity and efficiency and enhances retention of the workforce.
Job satisfaction, collaboration and work performance are all enhanced. And most importantly a positive workplace environment reduces stress in employees. As an employer or a leader, you would want happy employees because happiness means more productivity, increased sales which leads to improved bottom line.
The greatest investment you can make is in your people. If you’re not investing in your people, you’re not investing in the future of your business.