Why Employees Are an Entrepreneur's Best Investment
Entrepreneurs often see managing their businesses as transactional, and rightfully so. Every cent and every minute you invest should matter. Learning which of your investments have the highest rate of return can help you manage your time and money even more effectively, whether it's prioritizing more valuable clients or committing to advertising strategies that yield the highest number of new leads per month. But the most important and most rewarding investment an entrepreneur can make isn’t a client or a marketing strategy. It's your team of employees. Spending more time and money on your workforce will help your organization thrive in ways impossible to anyone neglecting their team. Here are some essential steps toward making that a reality.
Scouting and Onboarding
Everything starts with the scouting and onboarding process, where you’ll look for the right employees to fill your ranks and equip them with the items and training they’ll need to be effective in those positions. Many entrepreneurs get focused on hiring employees like checking off tasks on a list, filling the positions as quickly as possible rather than spending the extra time and money to make sure they have the right people for the job. Investing more in this area will allow you to hire more talented people, but also people more inclined to share your brand values. Once hired, spending time training, mentoring, and onboarding your employees correctly can equip them with the knowledge and experience they need to be more productive, integrated members of your team.
Google, for example, makes use of a thorough onboarding process to ensure its employees are well integrated into the company’s culture. Zappos, as another example, has an onboarding program that always lasts four weeks. Every hire goes through this process, no matter their position, and it’s specifically designed to improve bonds between teammates and instill the values of the company culture.
Related: Hiring Your First Employee
If possible, invest in your employees’s health, safety and wellness. Some of these investments are requirements, like purchasing workers’s comp insurance in many areas or enforcing basic safety standards. However, the bare minimum isn’t going to help you get the most out of your employees. Supporting them with comprehensive health benefits and/or a health program designed to help them eat better, exercise and adopt other positive habits can mean fewer sick days, higher energy and focus at work and greater overall productivity.
Asana, for example, has won several “best workplace” awards thanks in part to its emphasis on health. The company offers three nutritious meals a day, onsite yoga and even a fitness reimbursement for gym memberships and related purchases. The Motley Fool, as another example, offers a robust healthcare package that employees can opt into for just $4 per paycheck. The Fool also offers free wellness and fitness bootcamp classes, as well as an open gym, subsidized massages and various clubs and health fairs.
Morale and Retention
Employee morale is a major factor in long-term success. It affects not only how your employees engage with each other, but also how motivated they are to achieve your objectives and how inclined they are to pursue a long-term career with your company. According to one SHRM study, it costs between six and nine months salary to find and train a new employee, which translates to $20,000 to $30,000 for a manager making $40,000 a year. A much smaller investment could keep that manager happy and invested in the company long term, dramatically reducing your overall costs.
Location Labs, for example, boasts an unprecedented 95 percent rate of employee retention, thanks to their many employee rewards and team-based mentality. Netflix, as another example, works hard to keep morale high by giving their employees as much flexibility as possible. This includes practically unlimited vacation time, underlined by a “culture of responsibility” that encourages employees to perform their duties as they see fit.
Leadership, Innovation and Original Ideas
Investing in your employees also allows them to develop their skills and improve themselves professionally. Better-trained employees will be more vocal with their ideas, more confident in their work and more likely to innovate in the course of their job, whether that means coming up with new product ideas or just critically analyzing the usual procedures. If all your employees become entrepreneurially minded or leaders in their own right, your organization will grow even faster.
Patagonia, for example, has a standing “let my people go surfing” policy, wherein they let employees leave the office even during office hours for good opportunities, like taking advantage of perfect surfing weather. This encourages independent thinking and autonomy. Southwest Air, as another example, gives its employees more autonomy so they can take charge and put their original ideas to the test. Employees there can exercise freedom in unexpected ways, including designing their own uniforms.
Related: The Key to Hiring the Best Employees
How to Invest More in Your Employees
So how exactly are you supposed to invest in your employees? These are some of the best ways to develop your staff:
Provide more learning and education opportunities. Learning and education are top demands for modern employees, and there are many ways to provide these opportunities. You can invite speakers, host workshops, provide mentorships or even just subsidize the costs of online classes relevant to their position, like the Fool does in the example above.
Incentivize employees with promotions, raises and bonuses. Anything that incentivizes employees to stay with the company is going to have a positive impact. Offering promotions from within, raises and bonuses are all valuable investments for your top staff. Flexibility and individual freedom also works, like with Netflix in the example above.
Invest in employee health and well-being. Healthcare coverage, workplace wellness, gym memberships and recreational activities are all good investments to keep your workers fit and healthy. You can follow Asana’s example here.
Spend time learning what motivates each employee. Spend more time meeting with employees, evaluating them and finding out where their preferences lie. This allows you to reward and motivate them in more personal, appropriate ways. This way, you can learn lessons from all the company examples in this article and apply them as appropriate for your team.
There isn’t a single “right” way to invest in your employees, since different industries will have different needs and different brands will have different values. However, this is a crucial element of your business to consider and one that you can’t afford to neglect. Your team members will be the ones carrying out your vision, and if you give them what they need to be successful, there isn’t much that can stand in your way.