Treat your grunts well to improve profits
A study published by the Harvard Business Review shows that no matter what the size your business - the way you treat employees at the bottom rung of the company ladder can have a positive impact on your bottom line.
That’s a direct contradiction to the pattern we see at most companies, where the top executives and highly skilled people get the big bucks and bigger incentives, and the stock market rewards companies for squeezing and cutting people on the lower rungs of the ladder with short term spikes in their share price (even if this practice has proven to be at the expense of a firm’s long term prospects).
The study looked at companies all around the globe, ranging in size from 27 to 126,000 employees, from 2005 until now.
The study showed that in most businesses, employees determine 90% of the profits, and that by increasing employee engagement you can cut staff turnover, find cost savings, increase productivity, and increase profits - by adopting some or all of the following practices:
Providing more training and advancement opportunities for people on the lowest rungs of the ladder, led to lower staff turnover, easier recruitment, and increased efficiencies.
Investing in the health of people by providing low-cost health insurance, on-site exercise facilities, and a more nutritious company cafeteria menu - reduced absentee rates and boosted productivity.
Promoting from within had a big impact on keeping workers happy and reducing staff turnover.
Employee ownership options increased sales revenue and the value of those stock options.
Open book management - showing low-level workers the monthly financials and inviting them to find and share in cost-saving initiatives increased company profitability.
Flexi time for line workers - allowed firms to shift employees into more productive areas through the down times.
Giving line workers more say in the direction of their work motivated workers and led to cost savings and efficiency increases.
In summary, this is yet more evidence that increasing employee engagement creates positive outcomes for all concerned. It makes business better for everyone – for you, for your people and for all your stakeholders.
Are you measuring and driving employee engagement in your firm?