Investing in Your People Is Investing in the Future of Your Business
A workplace without red tape, unwritten rules and politics is as mythical as a unicorn. However, today's business leaders are beginning to look inward to analyze how people experience their workplaces. Inclusive leaders want to know how their team members work and respond to their environments, from human interactions to corporate culture.
Now more than ever, leaders must engage and invest in their people. Last May, consulting group Work Institute released the 2018 Retention Report. Its findings predicted that 42 million employees -- one in four -- would leave their jobs by the end of 2018, costing employers an estimated $600 million in turnover costs. Work Institute also forecasted those annual costs will climb to $680 billion by 2020. Company leaders long have speculated that most employees leave their current jobs primarily for better-paying positions. However, the retention report instead uncovered consistent, underlying issues: career-development opportunities, work-life balance and poor management.
In all, the Work Institute report identified 50 important reasons people decide to leave their jobs. These reasons then were grouped into 10 categories -- seven of which comapny leaders have the power to prevent. Here are the top five:
- No opportunity to grow in a preferred job and career (21%).
- Better work-life balance, including flexibility around schedules (13%).
- Unprofessional or unsupportive manager (11%).
- Personal or family health issues (9%).
- Pay identified more than benefits (9%).
Employee turnover is expensive. The employee lifecycle encompasses advertising, recruiting, training and lost productivity. Companies that fail to proactively invest in their workforce will see these costs amplify. Staff salaries, benefits and “help-me-grow” environments all are a good start to grow human capital. But leaders also must spend money developing their people. Here are five ways companies can invest in their people's success and enjoy a more sustainable business.
1. Cultivate a culture of honesty.
Skilled communicators hold power. Failure to communicate costs money and compromises bottom lines. A white paper from International Data Corporation reported that large American and U.K. corporations (those with 100,000 or more employees) each lose an average of $62.4 million annually because of employee misunderstandings, misinformation or lack of confidence in how they're supposed to do their jobs.
Poor communication is a leader's conscious decision not to improve. These bad bosses might think they don't have time to get bogged down with employee communications. Maybe they believe workers will come up with their own interpretations regardless of the message, or they've decided to keep employees on a very need-to-know basis.
Leaders of the future must create a culture of honesty. The flow of truthful information within the environment fosters courageous conversations. It's worth every second to communicate with intent so the message aligns with business values, resonates with the team and inspires action.
2. Understand the whole is greater than the sum of its parts.
Wellness encapsulates a range of programs aimed at protecting employee health, boosting performance and embracing employee health and wellbeing. Company executives are opening their minds and hearts to re-humanizing business. They've launched innovative programs and resources aimed to improve their employees' financial wellness, mental health, nutrition, movement, mindfulness, sleep and stress management. And they're investing in leadership behaviors and culture changes to support those efforts. In 2018, the corporate wellness market reached nearly $8 billion in the United States, and it's expected to hit $11.3 billion by 2021.
VirginPulse offers an app to deliver a wide range of employee wellbeing solutions. Its active users are "65 percent more engaged, have 32 percent lower turnover rates deliver 9 percent higher productivity than their peers," according to a 2018 Deloitte report. Xero is fostering wellness in its workplace by creating environments in which people feel they belong and can do their best work. Having recently made changes to its Wellness Leave policy, Xero has encouraged conversations about physical and emotional health, participated in fun runs and promoted the option for staff members to take time off for their wellbeing or if a partner or dependent requires care.
3. Indulge in some soul food.
Volunteering time to help another human being contributes to the greater good. That's why community involvement is such a powerful way for employees to feel connected to something bigger than themselves. People who take part in corporate social responsibility activities tend to be more engaged in their work, hold more positive views about their coworkers and have higher levels of job fulfillment. A company's commitment to community and social responsibility creates an environment that makes a difference in the lives of its employees, helps build loyalty to the business and can impact the organization's ability to attract and retain top professionals.
Recently, Salesforce released a new philanthropy cloud that connects corporations, employees, and nonprofits at scale. Employees can track and take ownership of their philanthropic impact and team up with coworkers to fundraise and volunteer.
4. Conduct a SWOT analysis.
Prioritizing professional development adds credibility to a brand, increasing marketability both within and outside a business. Leaders can conduct a self-check with a SWOT analysis: strengths, weaknesses, opportunities and threats. Then, company executives can craft a plan that uses the SWOT results to develop short- and long-terms goals, cultivates individual ownership, encourages accountability and drives individual employees to ask, "Where am l now, where do l want to be, and how do l close the gap?” Monthly check-ins are valuable to track against the goals, nurture courageous conversations and review progress for continued improvements.
5. Recognize that human capital is a company's scarcest resource.
Any organization's success lies in the happiness, competence and expertise of the people behind the business. The most transformational thing a company can do for its people is to invest in creating work environments that unleash intrinsic inspiration. An inspired employee is more than twice as productive as a satisfied employee.