Why the Human Workplace benefits people & profit
At Workhuman, one of our core beliefs is that a truly human workplace can deliver the best of both worlds – a positive work culture and a healthy bottom line. This belief is born out of the fact that many of the companies voted the “best to work for” year after year are also some of the most successful in the world.
In fact, Dr. Michael O’Malley notes in his Harvard Business Review article that in his research of the best places to work, like Google, Salesforce and Patagonia, “[a]lmost all of the corporate founders and CEOs we spoke with told us that they built their companies with people in mind,” and observes, “To them, a healthy culture is as important as a healthy balance sheet.”
Dr. O’Malley’s findings confirm that a Human Workplace is the cornerstone of an engaged and motivated workforce – something that unquestionably has a direct and measurable impact on your organisation’s financial success. Simply put, engaged employees perform better and are more productive, delivering greater customer loyalty, sales, and profits.
What is a Human Workplace?
The Human Workplace is a new work paradigm that leverages the power of human connection to build resilient, high-performing teams – no matter where those teams happen to be. Rather than aiming to get the best out of employees, the Human Workplace strives to enable and inspire employees to give their best.
The Human Workplace represents a new dynamic between employers and employees – one that goes beyond simply focusing on how efficiently people learn skills and complete tasks.
Today’s employees want to have meaningful work, a sense of empowerment, and personal and professional growth. A Human Workplace makes all of this possible by creating a culture where employees feel accepted, recognised, and rewarded for their unique qualities.
The ROI of the Human Workplace
In my book, “Making Work Human,” co-authored with Workhuman CEO, Eric Mosley, we posit that a Human Workplace – created and nurtured by employee recognition – more than pays for itself. What’s more, even the “intangible benefits” of a Human Workplace can lead to quantifiable financial returns.
To understand recognition’s return on investment, it’s important to view its net effect as the sum of improving three specific categories. These performance indicators are: (1) employee experience; (2) financial outcomes; (3) operational outcomes.
Included within these three performance indicators are metrics such as employee turnover, productivity, and engagement. Employee turnover can be extremely costly to an organisation – between 50% and 150% of salary according to a Korn Ferry study. When it comes to employee retention, the power of a Human Workplace, driven by recognition, can readily be demonstrated. One of the most quantifiable measures of the recognition’s effectiveness is its impact on voluntary employee turnover. The research overwhelmingly demonstrates that recognised employees are more likely to stay at a company. In a SHRM/Workhuman Employee Recognition Survey, 68% of organisations with employee recognition reported a direct, positive impact on retention.
A Human Workplace not only reduces employee turnover costs, it also increases employee productivity and, therefore, profitability. The Human Capital Management Institute performed an analysis of its member companies as detailed in “Making Work Human”. It found that Workhuman customers who have created a more Human Workplace through social recognition showed an average increase of $1,737 (£1,258) in increased productivity per employee versus companies that were not Workhuman customers. For a company with 15,000 employees, that translates into a £19 million annual benefit compared to industry peers.
The benefits of a Human Workplace to employee experience
The Human Workplace can have a significant impact on employee engagement – a component of the employee experience. As proven in extensive research, employee engagement has a direct impact on the top and bottom lines, such as increased productivity, customer loyalty, sales, and profits.
A joint study from IBM and Workhuman into the role a Human Workplace plays in creating a positive employee experience reveals many benefits to a business’s bottom line.
Organisations that score in the top 25%on employee experience report nearly three times the return on assets and double the return on sales compared to organisations in the bottom quartile. Such findings point to the importance of creating a Human Workplace that drives a positive employee experience, and in turn, fosters organisational efficiency and profitability. It also reveals a key source of sustained competitive advantage for organisations looking to thrive.
People or profit – not an “either-or” proposition
The best news is that achieving business success doesn’t have to be at the expense of a Human Workplace. In fact, overwhelmingly, the research tells us that creating and nurturing a vibrant workplace culture is one of the primary drivers of financial success.
The choice is not between business priorities or the interests of people. It’s not an either-or. It’s both. Both people and profits. Both leading in performance and leading in the employee experience. Both growth and gratitude. Bringing the Human Workplace and business goals together makes the ultimate winning combination.