A Positive Work Environment Can Boost Your Bottom Line
While many companies continue to believe the most important considerations to an employee are their salary and benefits, the UN Global Happiness Policy Report indicates otherwise. Employees in a positive work environment are more likely to promote and maintain company standards. Pay is now considered the third most important consideration when employees are assessing their happiness. Job satisfaction is ranked second, with interpersonal relationships stealing the top spot.
So if a company is interested in keeping their employee satisfaction levels and their bottom line high, focusing on creating a positive work environment is key. Fortunately, creating a positive workplace is not an additional expense for companies and can actually save them money.
Calculating the Hard Costs of Creating a Positive Work Environment
Ensuring your corporate culture healthy and creating a positive work environment where employees are appreciated and engaged will cost money, but if you spend wisely, the return on investment for those dollars will make the expense well worth it. Here are two ways to enhance employee engagement and what they will cost.
Executive Leadership and Management Skill Development
While you can find cheap courses regarding leadership on Udemy and Coursera, ensuring your corporate culture is healthy and friendly is worth paying for a better course. Executive Leadership and Management skills courses cost upwards of $2,000 per person through training companies like Global Knowledge.
While it might feel expensive to send key leadership team members to training courses or to have leadership trainers come into the company to run these sessions, the value of having great leaders should not be underestimated. Strong leaders improve company culture by encouraging open communication and enhancing employee engagement. Employees who feel heard and valued by senior team members value the team and will work harder to reach goals and targets.
Employee Opportunities to Interact Socially
Traditionally, companies have engaged in team-building opportunities like company sports days and retreats. While sports days have gone by the wayside, retreats, conferences, and in-office company perks still exist and can enhance the well-being and happiness of employees.
Google and other tech companies are known for having fabulous perks like incredibly flexible work hours, a free coffee bar and restaurant, and company-funded Uber rides home at the end of a very long workday. Fortunately, you don’t have to offer everything Google does in order to give your employees the opportunity to interact socially and feel appreciated.
Something as simple as an in-office coffee bar can cost as little as $7-12 per person per month but provide immense value for employees. An in-office coffee bar offers employees not just free-to-them access to coffee but also the ability to interact with colleagues in a friendly environment. The casual conversations one can have with colleagues over a cup of coffee enhance the feeling of being in a positive work environment.
Keeping an Eye on the Benefits
While there are expenses to enhancing employees’ satisfaction with their jobs, employees who are happy with your corporate culture and their work/life balance will save your company substantially more money than keeping those employees happy will cost.
Increase Employee Retention
When an employee is unhappy with the company culture, they tend to move on to another company with a more positive work environment. While this is great for the employee, it’s not as good for the company they used to work for, as now the company has to find another employee to replace them. Despite the courtesy two week notice period, hiring and training a new employee generally takes far more than two weeks.
There are hard costs involved when an employee decides to move on to another company. In order to replace the employee who has left and to keep projects running, a company will also have to take on the following costs:
- the cost of finding a new employee – placing ads, the time of the person who is going through resumes and interviewing candidates
- the cost of training the new employee – the time of the person training the new employee as well as the time of the new employee
- the cost of reduced productivity for the team, which is missing a fully contributing team member during the training process
- the opportunity cost of having an empty seat during the search process, possibly resulting in having to turn away work
The little things can make a huge difference to your company culture and the way your employees feel. While some companies choose to censor their employees access to social media at work, all that does is make the employee feel like the company doesn’t trust them. Having a positive work environment can be as simple as allowing social media access and not micromanaging the office supplies. The price of a few pens is nothing compared to value an engaged employee provides when they are motivated to do good work every day as part of a team.
While many employees officially change companies for reasons like “better pay” or “better hours,” company culture is always a factor. Many people are willing to stay in an otherwise imperfect role or company because the office environment and their personal connections with their colleagues are just too good to give up.
Minimize Risk of Lawsuits
Lawsuits are never good for a company, but a lawsuit filed by a disgruntled employee is one of the worst lawsuits a company can be faced with. The cost of a potential lawsuit can negatively impact your company in three main ways:
1. The threat of a lawsuit can cripple your business. When an unhappy employee threatens your company with a lawsuit, your company immediately needs to shift its modus operandi to being on the defensive. Human Resources now needs to spend a lot of man-hours monitoring all official communication and processes involving the unhappy employee, their team members, their supervisors, and any other people who work directly or indirectly with them. On top of all the time spent on damage mitigation efforts, the company focus is now on keeping things from escalating instead of on growing the bottom line or keeping other employees engaged and happy.
2. The actual cost of legal defense. If the lawsuit goes to court, the company’s legal fees can be significant. Even if your company wins, lawyer’s fees and other court-related fees can easily add up to $75,000-$125,000 to defend your company through discovery. For a small business, that amount can be catastrophic.
3. The damage to the company reputation. Even if the lawsuit is dismissed or your company wins, the reputational damage done by being engaged in a lawsuit with a disgruntled employee can be more substantial than the monetary cost of defense or missed projects. Reputational damage can be long-term and incredibly expensive. How much damage can be done by a lawsuit is hard to estimate, as it depends on the size of the company, but it can easily be millions of dollars over time for medium to large companies.
Cultivating a friendly atmosphere at work may not seem like the most obvious way to save your company money, but for very little financial investment, your business could save a fortune over the years.
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