When a company is deliberating on a possible investment, regardless of the sector it operates in, there is only ever one, real deciding factor; whether the investment will provide a worthwhile return on the spend.
In recent years, it’s why spend categories such as IT transformation, content marketing, cloud migrations, digital programmes and CSR initiatives have all seen significant budget increases across industries of all types – in their own way, they all deliver a return.
However, one of the most powerful and proven ways for a company to invest capital is often missed, despite it being a resource all companies would fall apart without; their staff. In this piece, we’re going to demonstrate the ways in which staff can be invested in to deliver the returns you want.
Training & Development
It’s the first place an organisation tends to go when looking at investing in staff and with good reason. If for no other fact than it’s something staff actually want. A long-term research project commissioned by Middlesex University for ‘Work Based Learning’ found that from a sample of 4,300 workers, a worrying 74% felt that they weren’t achieving their full potential at work due to a lack of development opportunities. Their potential, is your company’s potential.
As it turns out, these employees decrying their unfulfilled potential due to lack of training were onto something. Accenture PLC, the global management, consulting, and professional services firm carried out a study on the financial return from Training & Development programmes delivered within companies. It showed that for every pound invested in training, companies received an average of £4.53 in return. Put differently, Training and Development typically delivered around 350% ROI. Not small potatoes by anyone’s standards.
Train and develop your staff to negotiate effectively or manage a contract critical to your customers and the returns are likely to be significantly higher than the averages quoted here.
Although there has been, there’s no study that needs to be done on the effects of employee relationships on a company’s performance. Low morale and fractious relations between individuals can severely hold an organisation back. Indeed, in 2015, Virgin Pulse discovered that beyond productivity levels, 44% of employees reported that a good employer relationship positively impacts their stress levels, leading to higher productivity overall.
As initial investment goes, putting the apparatus in place to facilitate better working relationships is comparatively inexpensive. You can start by making sure your employees feel valued for the role they play at your organisation. Here are a few actions you can take:
- Listen to employees and make them feel heard.
- When employees give you feedback, acknowledge it and do something about it.
- Build a positive employee experience from recruitment to outplacement and everything in between.
- Organise opportunities for employees to bond and have fun together.
- Put in place clear codes of practice of how employees should behave towards each other
It is easy to envisage these statements as corporate messages, rolled out by a central HR function, with cynical, disengaged staff rolling their eyes at yet more messages that lack follow through. However, these are basic and good practices for all line managers, be that in the board room or the post room. None of these come at significant cost but all can impact significantly.
Time is a finite entity. We can never know exactly how much of it we have, but we do know that it is a resource that cannot be replenished. We simply have what we have and that’s about all there is to it. The beauty of time is that it can be spent on anything. Yet this is also its sourest feature.
Too often we spend time completing tasks that are irrelevant, staring ruefully through windscreens at endless jams ahead of us, existing in office spaces we’d rather not be in. Though often unavoidable, there is no doubt that organisations can do more to return the currency of time to their employees.
One way of doing this is by changing the culture of a business to become more supportive of employees working from home if the opportunity presents itself. Some business leaders may have concerns about how productive staff may be when working from the dining room table, but research suggests they shouldn’t be. In 2014 Stanford researchers carried out a study that looked at how working from home impacted employees at a Chinese travel agent’s call centre. The study found that employees at home were on average 13% more productive, making more phone calls and spending more time on the phone.
Not only will allowing your staff to work from home make them happier, it could also make them more productive. It may not be possible all the time, but where it is possible, it should never be discounted.
For those people fortunate to be in professional roles, the allocation of your time is often highly discretionary. Ask yourself; how much of your time is spent on important things that make a long-term difference to your organisation? How much time is spent on trivia like arbitrary emails, urgent but ultimately unimportant actions, re-writing that action list for the fifth, sixth, seventh time that still has the important stuff with a status of ‘not started’?
When starting out, remunerating employees handsomely is a luxury few businesses can afford. However, once established the case for a miserly approach to wages is smashed by the counter-arguments.
For starters, to maintain a successful business, you need exceptional people. To attract and keep exceptional people, you need to be providing proper compensation. Outside of the third sector, talented professionals don’t work for poor wages, or at least they won’t for long. They’re clever and they know their worth, that’s part of what makes them exceptional. As the old adage goes; pay peanuts, get monkeys.
Next, and on this there are no grey areas; low wages hurt your brand and social credibility. Consumers prefer doing business with companies that treat their people well. Indeed, many make a point of avoiding companies that don’t. It can also impact on customer experience. Employees who feel undervalued can, even if subconsciously, project their frustrations and apathy onto customers. It’s unpleasant and gives customers reason to go elsewhere.
There’s also the fact that by providing higher compensation you can justifiably elevate expectations. Well paid employees can have more expected from them and be held to a higher standard. They will also expect more from themselves. If you want people to jump high, set the bar high. You can’t excite top performers with low expectations.
Finally, there’s the simple fact that if you don’t pay your employees well, your competition will be more than happy to.