When people discuss “success” in business, the focus is most often on the bottom line. Numbers are tangible measurements of success that make sense to everyone. At WhyWhisper, however, we also spend a great deal of time defining success in terms of impact: How much are companies doing to make the world a better place, what effect is it having, and what does it look like in practice?
A subject that comes up often is that of employee happiness. Unfortunately, even outwardly impactful businesses and organizations will often overlook its importance. Meanwhile, studies have shown that when businesses treat their employees fairly and make decisions with compassion, it can positively affect their impact and their bottom line.
Last week, the White House hosted an event called Working Families: Champions of Change, which included discussions and panels with some of the country’s most inspiring advocates for employee fairness. At the event, Patagonia CEO Rose Marcario spoke about the company’s efforts to treat their employees fairly, and why it’s been so crucial to their success. Her main takeaway? By offering fair benefits and showing their employees that they care about them, they make their employees happy, and instill a sense of loyalty that encourages them to work hard and stick around. All of this, she said, affects their employee retention and overall revenue.
Here are some things to consider when evaluating a company’s compassion and fairness:
Equal Pay: Paying people of all genders the same salary for equal work shouldn’t be a question – but unfortunately, it is. Today, women are still paid only 78 percent of what men are paid for equal work, on average. According to a report by the American Association of University Women, this problem exists in every state and occupation, is even more extreme for women of color, and gets worse with age. Companies that treat their employees fairly don’t operate like this; they pay men and women equal wages for equal work.
- Paid Maternity / Paternity Leave: At the Champions for Change event, President Obama noted that in some employment situations, women aren’t even given a paid day off for the day that they give birth. It is crucial that mothers and fathers of new babies are given the opportunity to take time off for the birth of their child without sacrificing pay when it is most needed. Companies that value employee satisfaction prioritize post-birth parental leave.
- Fair Benefits: Companies that prioritize employee wellness also offer them comprehensive health packages, if they are able. Some small businesses and start-ups aren’t able to cover healthcare costs, but as soon as a company has the capital to offer benefits, they should do so. Lack of healthcare coverage is a huge financial burden for individuals and families in the United States.
- Paid Sick Leave: When paid sick leave isn’t an option, employees will continue to work while they’re ill, negatively affecting everyone around them. When sick people come into work, productivity decreases, illnesses spread unnecessarily, and morale can quickly plummet.
- Career Advancement Opportunities: Factors that contribute to employee happiness are definitely not all financial. When employees have clear opportunities for career advancement, they are more likely to work hard to achieve goals and go above and beyond for their employers.
- Work-Life Balance: Another non-financial indicator of whether or not a company is fair is the extent that it values work-life balance. Companies that expect their employees to work long hours and be available at the drop of a hat foster cultures of resentment and burnout. Instead of encouraging greater productivity, these companies push employees to work less efficiently for longer periods of time, which is detrimental to everyone in the long run.
- Focus on Culture & Community: Companies that work to foster cultures of collaboration, kindness, and understanding in the workplace are much more likely to have happier, healthier employees. Stressful work environments can lead to a multitude of adverse health effects in employees that create a cycle of negative outcomes – both for individuals and for the company. At the end of the day, successful businesses simply care about their employees, and want to ensure that they are working under conditions that will allow them to thrive.
When companies take these elements into consideration, here are some of the benefits that they see:
Higher employee retention:
When employees are happy at work, they tend to stick around longer. This is a very good thing, because high employee turnover has significant negative impact on a company. First of all, employee turnover can bring down company morale. When someone on a team leaves, others are often required to pick up the slack without a salary increase. Additionally, when employees see someone leave, it can cause a ripple effect leading to more employee departures.
Employee turnover also has a clear effect on a company’s bottom line. The process of seeking out, interviewing, hiring, and onboarding a new employee can be extremely high. Reported costs vary, depending on the study, but all indicate that it’s an expensive process, especially for higher level positions.
To put it simply, when employees know they will be rewarded for their work, they are much more likely to do it well. Incentivizing good work – whether it be with verbal praise, recognition to their peers, financial compensation, or career advancement -- makes a big difference in terms of employee productivity. Plus, most employees simply want to do better work for companies and coworkers with whom they have good relationships. By being fair to your employees, you will foster a sense of community, lessening any focus on office politics, and increasing the focus on output and impact.
Higher revenue and greater impact:
Both of these elements – employee retention and increased productivity – factor into a company’s bottom line as well as the level of impact they are able to have. In fact, according to a 2013 study by Aon Hewitt, for every one percent increase in employee engagement, companies can expect to see 0.6% in revenue growth. Because employee engagement increases with employee satisfaction, companies that treat their employees well will increase their bottom line.
What companies do you know that focus on employee satisfaction? We want to talk about them! Here’s how you can share with us: