Here's Why Your Company Should Strive To Be The 'Best Place To Work'
Join Entrepreneur's The Goal Standard Challenge and make 2017 yours. Learn more »
Business awards are important badges of honor for companies. They're an opportunity to demonstrate to clients, customers and the general public that yes, you’re doing something right– according to an objective panel of judges, anyway.
But few corporate awards are as highly sought-after or revered as a prestigious “Best Place To Work” title. A company achieving recognition in this area is one that places employee satisfaction at the heart of its operations, and as the oft-quoted mantra goes, "happy employees equal happy customers."
The business benefits of this, as I’ll come to explain, are substantial. We consistently see that the winners of these types of awards are companies that have also experienced significant growth and success, and it is a relationship should not be underestimated.
There are numerous “Best Place To Work” award programs, although the most highly-respected are held by the likes of The Sunday Times, Business Insider, Forbes and Glassdoor (a website where employees and former employees anonymously review companies and their management). Through independent HR auditing and employee surveys, these competitions weigh up a raft of criteria on salaries, benefits, leadership, personal growth and wellbeing, ultimately revealing what employees really care about in the workplace.
Whether or not your company has had direct involvement with these awards, the results are an invaluable source of information. Quite simply, the better you understand the elements that make a company a great place to work, the better you can make your company a great place to work.
And the results can be surprising. Management often fall into the trap of assuming employee satisfaction is directly correlated to financial reward. Indeed, a study undertaken in 1986 and replicated consistently every year since shows that management believes employees care most about good wages, job security and promotions, whereas employees, in fact, list interesting work, appreciation, and a feeling of “being in on things” as their most valued job aspects.
It makes good sense that companies properly understand just what it is employees care about, and “Best Place To Work” competitions reveal a great deal. Let's now take a look at three of the major foundational criteria evaluated, and their importance for the company and the employees.
Recognition of a job done well is a vital component of employee satisfaction, and a regular criterion across all the major “Best Place To Work” initiatives. Yet according to Glassdoor, the average workplace scores just 39% in this regard, compared to an average score of 75% among the best places to work.
There’s a veritable avalanche of data out there waxing lyrical about the importance of employee recognition, but one key stat found in Redactive Media's Great Workplaces 2016 publication really brings things home: the number one reason most Americans leave their jobs is that they don’t feel appreciated.
Meanwhile, organizations with recognition programs which are highly effective at enabling employee engagement had 31% lower voluntary turnover than organizations with ineffective or no recognition programs. Despite popular opinion, recognition consistently scores higher on satisfaction indices than reward.
Organizational cultures built on trust drive engagement, which ultimately drives business and financial performance. But when employees are asked to rate how much they feel they trust their employers, the average organization scores 55%, according to Glassdoor. The 100 best places to work, however, have an average score of 85%.
In fact, according to Glassdoor, the biggest discrepancies between average organization score and best places to work score could be found in the categories "talent management" and "trust in leadership," with the average company scoring 38% and 40% respectively, compared to the best places to work, which scored an average 75% and 86% respectively. A massive difference, no doubt.
Logistics company DHL has won the “Great Place to Work in the UAE” award for the third year in a row. Why? Because as well as nurturing employee development and creating a fun work environment, the company works hard to be transparent, to listen and act on employee feedback, and to make sure an atmosphere of trust is maintained between top and lower-tier staff. Management spends time with frontline employees on courier rides and customer service calls, for example.
IT company Softcat, meanwhile, won Glassdoor’s large company award, and chalks a great deal of its success up to employee involvement in central operations: at least 50% of the company’s strategic goals for 2016 came from staff roundtables.
Let’s not beat around the bush: people go to work because they need money to live. Recognition and meaningful purpose are important, but you can’t eat good principles!
However, while nearly seven in 10 (68%) people say that remuneration is among the top considerations in accepting a job, money only motivates people to a certain extent. When it comes down to overall satisfaction with a current position, there is, quite simply, much more to it than the size of the salary.
Recent research from Glassdoor found that more than half (57%) of people said "benefits and perks" are among their top considerations in accepting a job, and four in five workers say they would prefer new benefits over a pay raise.
Companies such as Netflix and Airbnb –both consistently rated as great places to work– have hit the headlines in recent times because of the perks their employees enjoy. Netflix offers unlimited maternity and paternity leave for the first year after a child’s birth, for example, while Airbnb gives employees an annual allowance of $2,000 to travel anywhere in the world.
It's important though to note that benefits and perks needn’t be particularly lavish or costly. According to Glassdoor, the most highly rated benefits to employees include among them the most basic: healthcare insurance, paid leave, performance bonuses, paid sick days, and pensions.
Because revenue and profit matter
Again back to that mantra I had upfront: "Happy employees equal happy customers," which equals financial success. It is consistently backed up by the success stories of companies voted great places to work:
- Airbnb, Glassdoor’s current Best Place to Work award holder, has been valued at $25.5bn after just seven years.
- Softcat (a Glassdoor winner mentioned above) has grown its turnover from £50m to £600m in a decade.
- Guidewire, third on Glassdoor’s list, was cited as being one of the top IPOs of 2012, and is currently on track to achieve revenue growth of 20% in 2016.
- Simply Business, winner of The Sunday Times list of Best Companies to Work For in 2015 and 2016, witnessed steady revenue growth over the period of 2006 to 2012 from £4.2m to £22.9m.
Upon receiving the award, Simply Business chief executive Jason Stockwood said, “We changed the culture and put employees at the forefront, turning the hackneyed phrase about customers coming first on its head. You can’t force people who hate their environment to do a good job. Customers only come first if our employees are happy and doing a good job.”
And so yes, sure, this comes down to revenue and profit. We want our employees to be as satisfied as they can be at work, because that is what influences company performance. We are not running charities, and as ugly as capitalism can be, we are all caught up in it, and we therefore have to face the challenge head on.
I would suggest a great takeaway task here would be for you to look at the current best places to work, both in and outside of the UAE (the Glassdoor rankings are a fine place to start), and then do your research to find out what they have that your company does not. Set up a list of the main criteria and identify where you are strong and where you are weak in terms of employee satisfaction, and once all is clear in your head, go and make the case to your CEO.
And to be clear, that case is very directly about overall company performance. If you believe as I do that your company success will increase as the happiness of your employees increases, then ensuring your CEO also believes this should at all times be a top priority for the HR professional.