How Happy Employees Equals A Hefty Bottom Line

How Happy Employees Equals A Hefty Bottom Line

As a business owner, one of the most critical tasks to your financial success is the constant brainstorming of ways to improve your bottom line. You may think there are only two ways to achieve this: cut costs or raise prices. Although these two tactics can provide results, they do so at an expense. If the idea of raising prices evokes panic over lost business, you'll turn to your books to see where you can save on services, supplies, and other frivolous purchases. Or perhaps, as a drastic measure, you'll temporarily cut employee hours or pay. But before you do so, we're going to let you in on a little secret. There is another solution, a less give-or-take approach to improving your bottom line.

The Secret: How A Happy Staff Can Improve Your Bottom Line

According to an article published by Zane Benefits, Inc., "some studies (such as SHMR) predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that's $20,000 to $30,000 in recruiting and training expenses. But others predict the cost is even more - that losing a salaried employee can cost as much as 2x their annual salary, especially for a high-earner or executive level employee."

So, how do you reduce your turnover rate? It's actually quite simple: make your employees' happiness a priority. “80 percent of people are dissatisfied with their jobs,” according to Business Insider. Employees will rarely express their dissatisfaction to their supervisors for obvious reasons; namely, in fear of losing their jobs. For this reason, you should encourage feedback (positive and negative) and conduct monthly meetings to determine what you can do to make your employees happier.

Don’t assume that the only thing your employees want is a higher salary. According to The Center of Association Leadership, "while 89 percent of managers believe their employees leave for better pay, 88 percent of employees leave for reasons other than money." If money isn't the catalyst for their departure, then what else can you do to retain your employees?

Focus on your environment. A positive work environment is a huge incentive. The average employee spends a good portion of their time at work; because of this, you should try to make your business a place that they want to be. Adopt a company culture that makes them feel welcome, valued and appreciated.

Focus on growth. Personal fulfillment is a beautiful thing. It boosts morale and encourages progression. Workers who find personal fulfillment at work tend to value their jobs and, therefore, seek longevity. If your employees know that there are opportunities for advancement, they will stay with your business, stay motivated, and stay engaged.

Focus on benefits. Another method to decreasing your turnover rate is to offer benefits to your employees. Attractive health insurance, vacation time, and profit sharing are great ways to incentivize. You should also consider providing catered lunches, hosting group events outside of the office, and perhaps you can collaborate with other businesses nearby to offer a company discount to your employees.

Apply the above methods and if your turnover rate remains unchanged, be sure to conduct exit interviews to better determine why your employees are leaving. You may be surprised by their answers.