For many companies, employees both drive the business and generate the greatest recurring expense. When employers spend an average of $44,888.16 on each employee per year, there is a pressure to cut costs, whether that is in the form of layoffs or cutting resources. However, these methods are counterintuitive.
Changing the work environment to be a more positive place where employees have the resources available and motivation to grow and forward the goals of the company can improve your bottom line through increased efficiency, reduced costs, and improved customer satisfaction. Methods such as layoffs actually increase costs by lowering morale, increasing the need to hire and train new people, and discourage talented staff from staying with the company. Cutting resources creates inefficiencies through lack of knowledge and valuable time wasted from outdated technologies. Research indicates that investing in your staff will enhance your bottom line by cutting costs and by boosting revenue.
Creating a fun working environment helps employees stay focused and efficient, reduces turnover, as employees are happier and less stressed, and increases positive customer interactions. Celebrating holidays and events reduces mental fatigue while increasing collaboration, morale, and efficiency, reducing costs, and improving customer satisfaction. A University of California study found that permitting employees to take mini-breaks, including walking around, throughout the day helps employees regain focus.
An employer can increase worker efficiency by making some small changes to the office environment. The Nordic Journal of Working Life Studies revealed that increased worker productivity and increased quality of working life go together. Setting the thermostat between 65 and 70 degrees boosts efficiency and saves on energy costs. A well-lit office with high air quality gives employees an extra boost and reduces office illnesses. Some companies have found that literally tearing down the walls between employees also contributes to a more positive work environment as it encourages collaboration.
Improving the quality of working life by promoting flexible schedules and accommodating life changes may reduce absences, reduce turnover, and improve customer service. Employees experience less stress and feel more productive when they can change their work schedule and locations to accommodate life changes. At SEMCO, employees set their own schedules to avoid the major rush hour traffic of Brazil. Not only did employees become more punctual, the increased flexibility allowed employees to feel more motivated to grow with the company. According to Richard Semler, flexibility is crucial to growth. SEMCO “has grown 27.5 percent a year for 14 years… If we said there’s only one-way to do things around here and tried to indoctrinate people, would we have grown this steadily? I don’t think so.”
Competence development and sponsorship of professional development courses is essential to keeping your company at an optimal level of performance. Finland studies have shown that gaining and developing skills is a significant predictor of both change in profitability and productivity. Improved skills, knowledge, and abilities enhance work performance and allow employees to better handle changes within the work environment. Employees feel a greater sense of gratitude and indebtedness toward their employer, and can now assume multiple roles within the company. Assisting staff in developing personal career plans allows the company to integrate employee personal goals with the needs of the company. Additionally, promoting mentorship allows the employees to know who to reach out to and how to better do their job.
Management can increase employee productivity by encouraging teamwork, rotating people into different jobs, and providing employees with challenging yet realistic goals. When the tone at the top encourages employees to demonstrate leadership at every level of the organization, employees feel motivated to increase their commitment to the team. Studies in Finland have shown that a work environment that fosters decentralized decision making allows employees to work together, exert a greater influence at work, and increase their sense of responsibility while assuming leadership roles. This in turn increases confidence and openness to changes within the organization. An open innovation approach is driven by a company’s customers and employees, where innovation is generated via the interactions between customers, other organizations within a company’s network, and different knowledge producing organizations. This allows management to gain new ideas and perspectives, enhance the exchange of information, provide better quality service and products for different types of customers, and increase feelings of mutual trust while making individuals feel important to the company. While training and technology are crucial elements, saying thank you is a free way to encourage your employees to give a little extra. Saying thank you for a job well done boosts self-esteem. Recognition for employee contributions can take the form of public shout outs, spot awards, or profiles in company newsletters. When management does not punish staff for honest mistakes, employees feel more secure and are more willing to take responsibility for their actions. Finally, treating employees like people and not numbers is one of the biggest incentives for encouraging employees to go the extra mile. Valuing their insights and experiences not only enhances the company’s organizational culture, it may just lead to the next big thing.
Change is seldom easy, but can be easier when management commits and demonstrates openness to employees influencing planning. Management should analyze work processes, workflows, and the information systems that provide this information to assess what works for the company. Measure performance against a range of goals and benchmark performance against other companies within your industry. Companies can survey customer, supplier, and employee satisfaction over time to see if these changes are working. When measuring for success, identify key performance measures and track them throughout the year. Finally, to keep employees motivated and to ensure they feel included, share these key performance measures. When employees know what the goals for the company are, they can change their actions to advance these goals.