There’s no question that HR impacts the bottom line, largely through the practices it employs to effectively engage its staff and build a great place to work. In recent years, numerous studies have suggested that building great places to work can and does lead to organizational success, meaning that great places to work frequently outperform other organizations. Simply providing unique perks, benefits, and a fun workplace, however, generally isn’t what creates a great place to work (although these certainly may be part of the package!). Research shows that great workplaces that best engage employees are those that see the most successful results. This emphasis on meaningful workplace practices surrounding employee engagement is what truly characterizes great workplaces nowadays. Consider the following:
- Hewitt Associates (2010) found that when organizations had at least 65% of engaged employees, its total shareholder returns were nearly 20% higher than average total shareholder returns.
- The McGill Institute for Health and Social Policy (2010) found that organizations that invested in their employees via supporting their health, providing training and advancement opportunities, offering incentives, engaging employees, and taking steps to ensure that their companies and the community profited, increased their profitability.
- Towers Perrin (2007) found that organizations with the highest percentage of engaged workers saw a 19% increase in operating income and 28% increase in earnings per share. Organizations with the lowest percentage of engaged workers, however, experienced a 33% decline in operating income and 11% decline in earnings per share.
- The Great Place to Work Institute (2010) reports that great workplaces (specifically Fortune’s 100 Best Companies to Work for in America) experience lower turnover, reductions in health care costs, higher levels of customer satisfaction, higher productivity and profitability, and greater innovation and risk taking.
- The Department of Labor found a link between progressive workplace practices and bottom line results, determining that there is a positive relationships between training, motivating, and empowering employees and improving productivity, employee satisfaction, and financial performance. In addition, the impact of progressive workplace practices tends to be more significant in the long term (Great Place to Work Institute, 2010).
While this is simply a snapshot of the many studies indicating a correlation or relationship between great places to work and business success, it’s obvious that great workplaces which focus specifically on engaging employees find themselves experiencing more business success than those that do not. In fact, recently Inc. 5000 released a list of the top companies in the Cleveland area which are growing at a rapid rate – several of which are past or present NorthCoast 99 winners. This is yet another testament to the strong relationship between great workplaces and organizational success, especially in our own region.
So what practices generate the most impact on engagement and create a great place to work? As discussed in our complimentary 2010 NorthCoast 99 Winners Report, the answer is very multifaceted – spanning engaging new-hires through recruiting and on-boarding, implementing effective compensation and rewards practices, developing and advancing employees, encouraging feedback and open communication, and promoting strong relationships with coworkers, supervisors, and leaders. In addition, there are many different ways of engaging employees and creating a great place to work and each organization approaches this in similar, but distinct and unique ways that are consistent with their culture.
If your HR department is looking for ways to boost business results, it’s important to make employee engagement and creating a great workplace part of the equation.
- NorthCoast 99: For more information on the NorthCoast 99 program, including a list of our 2010 winners and other reports and information, please visit www.northcoast99.com.
- HR Help Desk (Members Only): For additional information and guidance related to creating a great workplace, please contact firstname.lastname@example.org.
- HR Consulting: For assistance with a variety of talent management projects or employee engagement surveys, please contact email@example.com.
- Professional Development: To learn about methods of measuring HR and using a variety of HR metrics, join us for the following workshop: Measuring HR: Metrics for Successful Outcomes. Click here for more information or to register.