2020. Well, it’s been ‘eventful’. That being said, this is not a blog post about remote working, ‘the new normal’ or other topics which we’ve discussed extensively elsewhere. It’s about people. Your people. Specifically, it’s about what makes them tick – and why training could be about more than just skills…
Joining the dots
One thing that does need to be said about 2020, is that it’s made people nervous, whatever their profession (well, unless you’re Amazon’s Jeff Bezos, in which case, happy days). Whilst it’s certainly true that multiple industries are going to be affected by an economic downturn, the future is not universally bleak – but that’s not always something of which employees are aware. Uncertainty over their job security has a huge impact on a number of factors – stress, mental and physical health, social interactions, all of which have an impact upon productivity.
Can you put a number on happiness?
Productivity is about more than the bottom line – it’s about employees being valued as individuals. Only then can they contribute to the business whole. A recent study (Krekel, Ward & De Neve, 2019) collated findings from a series of Gallup individual studies, covering the link between wellbeing and productivity. The scope was huge – nearly 2 million employees in over 80,000 business units, from 230 independent organisations in 49 industries spread across 73 countries. So, big.
For the purpose of the study, the authors correlated employee wellbeing (defined here as satisfaction with the company as a place to work) with firm performance. They focused on 4 key metrics to define performance: customer loyalty, employee productivity, business unit profitability, and staff turnover.
Their findings were clear. Satisfied employees resulted in significantly lower staff turnover, and measurably higher profitability, employee productivity, and customer loyalty, with the latter being the most affected.
Why this (obviously) matters
So, to have employees who feel valued and are happy in the workplace is a win across the board, having a radical effect on all levels of a company’s operations. And it’s not just short term returns. Studies between employee satisfaction and long term stock market returns (Edmans, 2011; Edmans 2012), looked at a list of the ‘100 Best Companies to Work for in America’ and found that in the period 1984 to 2011 these companies returned between 2.3% and 3.8% above the industry average.
So, how to make people happy?
This one’s a little trickier. If we define ‘happiness’ in this context as feeling satisfied at work there are numerous ways to achieve this. Being ‘valued’ might come down to salary or specific working conditions, or it could also be achieved in other ways. Which is where we come back our current situation and the uncertainty and insecurity we all feel regarding our jobs.
One way to remove the feeling of insecurity? Training. Not only does training lead to greater satisfaction because we feel better able to apply new skills to specific tasks, but the very fact of being trained has multiple benefits.
More than just skills
The most obvious is that we know we’re not about to be fired. Logically, we know that if our employer is enrolling us in training programs (which have a cost, both in time away from work or the cost of the program itself) they are very, very unlikely to be considering letting us go – it just wouldn’t make financial sense.
Additionally, training is an opportunity for us to engage with our colleagues – particularly important if we are working from home or away from an office environment. We can interact, compete – particularly if the training solution is gamified – and socially engage with others. All of which improve our mental health (we are social animals, after all).
When training is presented in stimulating scenarios, we become even more motivated – and the development of new skills builds greater confidence in our abilities, letting us thrive in the workplace.
The bottom line
It’s rare that a business decision is so clearly win-win. By engaging with employees in training scenarios, we not only give them the skills to do their jobs better, we also reach out to them on an emotional level, inspiring them to feel fully participant in a company’s success.
And if the specific business is affected by an economic downturn? Consider this. Ranjay Gulati, writing in the Harvard Business Review compared ‘preventative’ companies that slashed costs (including training) during a recession with ‘progressive’ ones that focused on operational efficiencies rather than cutting jobs. The latter group – those that valued and grew their people – fared twice as well at the recession’s end, putting them in a much stronger position for long term growth.
So. Grow your people – grow your business.
Sources
- Krekel, C, G Ward and J-E De Neve (2019), “Employee wellbeing, productivity and firm performance”, CEP Discussion Paper 1605.
- Edmans, A (2011), “Does the stock market fully value intangibles? Employee satisfaction and equity prices”, Journal of Financial Economics 101: 621-640.
- Edmans, A (2012), “The link between job satisfaction and firm value with implications for corporate social responsibility”, Academy of Management Perspectives 26(4): 1-19.
- Harvard Business Review
