Companies with engaged employees see 233% greater customer loyalty and a 26% greater annual increase in revenue, according to Aberdeen. Conversely, employees who feel undervalued cite this as a top reason for job hunting, according to CareerBuilder. Leaders who are focused on lowering employee turnover and improving customer engagement will ultimately see higher profits and more prosperity. Essentially, the bottom line takes care of itself when a company takes care of its employees first.
Companies that focus on employee prosperity are proving out this theory. For example, REI CEO, Jerry Stritzke, closed operations on Black Friday and paid every employee because he wanted them to #optoutside. Stritzke has a 90% employee approval rating according to Glassdoor.com, and REI reported a 9% increase in revenue in 2015 over 2014.
The CEO of Medtronic, Omar Ishrak, boasts a 93% employee approval rating, and was named the 2016 Executive of the Year by the Minneapolis/St. Paul Business Journal for an acquisition that boosted sales by 60% and brought 350 jobs to Minneapolis. These CEOs prove that investing in employees is a smart business decision.
A CEO can invest in employees by:
- Giving them time to help their community through volunteer projects or humanitarian sabbaticals
- Allowing employees to have non-competing, outside business activities that further their personal development and satisfy their passions
- Creating non-traditional opportunities for growth such as a lateral move within the organization to learn new skills
- Encouraging peer recognition by setting up non-monetary reward systems that allow teammates to recognize each other’s values and skills
- Establish professional development programs to expand skillsets and knowledge
Today, prosperity is about investing in employees rather than just the bottom line. By setting this example, CEOs are perpetuating the vision of choosing people over dollars. With this mentality, employees are more likely to invest in customers, which reduces churn and increases revenue.
Prosperous leadership is a big-picture strategy. The effects may not be immediate, but the long-term results will come in the form of profits. While the bottom line is important, prosperous leadership is even more important because, in the end, everyone wins.