excerpts from a blog post on Harvard Business Review by Deidre H. Campbell
Life for small businesses may have more in common with the big companies than you may think. In a recent post on the Harvard Business Review, we found a case made for company culture that applies in any organization with more than one person involved. In this article, there is referenced a direct correlation between employee investment and the balance sheet.
–RBG
As Prof. James L. Heskett wrote in his latest book The Culture Cycle, effective culture can account for 20-30 percent of the differential in corporate performance when compared with “culturally unremarkable” competitors.
To better understand the ROI, the author’s company, Burson-Marsteller, teamed up with the Great Place to Work Institute to ask senior executives from top-ranked companies about the value of a positive work environment. The survey garnered responses from 20 of the top 25 companies in the global workplace ranking. Here’s what those companies do in common:
They invest more in their employees. The response came back resoundingly: It’s simply good for business. Rather than cutting back or eliminating programs, 30 percent of top-ranked companies are investing more in work-life programs, such as flex-time, health benefits, and employee perks. The remaining 70 percent have held steady the level of investment.
They’re upgrading. Old-fashioned benefits like health insurance, family leave, and flex time ranked only 15 percent when considering most valued HR offerings. Traditional onsite benefits, such as cafeterias, childcare, massages, and volunteer opportunities ranked a mere 5 percent when determining what benefits provide stability during economic uncertainty. Instead programs that offer the most stability, as reported by 75 percent of respondents, are those that communicate brand mission and provide career development opportunities.
They recognize that culture is critical to talent retention. When asked which elements of workplace commitment most benefit daily operations, companies ranked culture at 80 percent and recruitment/retention at 70 percent. Competitiveness, customer loyalty, innovation, and productivity — while critical to daily operations — trailed behind with each under 20 percent. In a world where competition for talent is global, star performers seek companies with values that mirror their own.
They know their audience. These companies recognize which stakeholders will watch their every move. For this audience, it’s imperative to communicate the company’s commitment to being a great workplace. 70 percent of respondents ranked customers as the most important external audience to understand this crucial point. 35 percent cited investors as the second most important external audience. This means that employees and senior leadership alike should ensure that the brand is understood inside and out by customers and other stakeholders. This blend is special, valuable, and demonstrates the holistic view we have of ‘doing business’ in the world.
Becoming a great workplace is the result of long-term investment in employees. As was shown, this kind of investment will increase productivity, improve recruitment and retention, and save costs — all positively impacting the bottom line. In challenging economic times, we are reminded that companies should not only be a great workplace because it is the right thing to do, but because it is good for business.
