A couple generations ago, the ideal company may have been an organization that followed labour regulations, treated their employees with respect, and offered a decent pension plan. By today’s standards, those conditions are just the bare minimum. Driven by millennials, employee expectations are rising and companies have to change with them in order to gain a competitive advantage.
Just as a disengaged employee can bruise your bottom line, an actively engaged workforce can bolster and improve your business’ performance and brand value. Here are 3 reasons why a strong culture can strategically strengthen your company’s bottom line.
Employees are an investment
Put simply, employees are a form of investments. Companies spend a vast amount of money and time to recruit the industry’s highest performers or entry level individuals with immense potential. Like any investment, an initial offer (in this case, a salary) is just the beginning. The most profitable investment requires continuous nurturing.
Jack Ma, the co-founder of Alibaba, asserts, “Help young people. Help small guys. Because small guys will be big. Young people will have the seed you bury in their minds, and when they grow up, they will change the world”. With great mentorship and guidance, engaged employees will grow into effective managers, who will in turn be the driving force behind your company’s success.
While employee engagement initiatives are significant investments, actively disengaged employees are estimated to cost companies between $450 to $550 billion in lost productivity per year (Gallup Poll, 2013).
Breeding grounds for innovation and creativity
While great culture can reduce employee exhaustion and burnout, exceptional culture breeds the thought leaders of tomorrow. Companies who build the right working environment can inspire and ignite creative thinking. A free-flow thinking environment goes hand-in-hand with a no-fear culture: a space where individuals are free to voice their ideas without fear of being fired, reprimanded, or embarrassed. Harvard Business School research shows that “the belief that one is not putting oneself at significant risk of personal harm (e.g., embarrassment, loss of material resources) and second, the belief that one is not wasting one’s time in speaking up…” are integral to fostering a no-fear culture.
The end goal is for management to hear honest opinions and innovative responses that could lead to company-wide improvements. If employees don’t relax and engage, innovative ideas will never get shared and these company-wide advancements will never transpire. Without innovation, your business could run the risk of falling into a rut, threatening your bottom line.
Word gets out
News travel fast. Bad news travels even faster. Negative testimonials on Glassdoor will not only cost you job applicants, but also weaken your brand. Large companies, like Uber and Pixar, are not immune to brand-crippling testimonials with employees and former employees attesting to their toxic work environments.
In the digital age, the average person has access to an abundance of social media platforms to share their experiences: good or bad. If your company culture is weak or even toxic, the investments you make on marketing and customer retention strategies will be futile. Bad culture is bad PR and will potentially lead to an exodus of clients, job applicants, and talent.
On the other hand, businesses with exemplary culture become the north star for other organizations. Shopify and Deloitte are often cited as leaders in this arena as they leverage collaborative space and innovative technology to inspire their employees. Their offices reflect their values and goals, attracting new talent and customers alike.
Changing your mindset
Legitimately talented individuals are exceptionally rare to find and exceptionally difficult to replace. Don’t think of your employees as a behind-the-scenes crew. Think of them as the headliners of your company’s brand and what they do have an immense impact on your bottom line.
Photo by Solomon Hsu on Unsplash