Investing in others, especially employees, is critical for business success in the long run. Though it may seem costly in the short term, research shows that appropriate incentives, attractive benefits, and flexible schedules more than pay for themselves through improved productivity, higher retention, and lower hiring costs. This article will elaborate on the meaning of investing in others in a business context and explain why it leads to better corporate performance.
Investing in employees creates good jobs and drives productivity
Many investors see worker pay and benefits as an expense that cuts into profits. However, ample research demonstrates that things like fair compensation, retirement accounts, healthcare, and flexible scheduling foster employee productivity, loyalty, and retention. For example, companies like Home Depot that employ knowledgeable staff and invest in their training provide better customer service. Restaurants that offer training and career growth to low-wage workers see less turnover. In short, investing to create “good jobs” generates returns over time.
Investing in training and growth opportunities boosts retention
Fast food chains often lose employees after 6-12 months because they offer little room for learning and advancement. However, restaurants like Tender Greens and Boloko provide training to entry-level staff to qualify them for management roles down the line. Though they pay above minimum wage, the retention and promotion opportunities make the investment in employees worthwhile.
Companies that invest in workers outperform the competition
The case of Northville gym owner Chris Klebba illustrates that investing in helpful, friendly staff who make customers feel comfortable leads to business success. Though such an approach might seem unprofitable to some investors, Klebba’s gym thrives thanks to repeat membership and word-of-mouth marketing. Similarly, Home Depot’s share price has grown after initial skepticism thanks to excellent shop floor service and expertise that comes from investing in frontline workers.
In summary, investing in employees through fair pay, training, growth opportunities and good working conditions provides returns via productivity gains, knowledge retention, and better customer experiences. Companies that create “good jobs” outperform competitors that view labor as just a cost to be minimized.