Investing In Employees: What Do Employers Spend On?

Investing in employees is an important topic for employers to consider. It can increase employee satisfaction, retention, loyalty, and morale, as well as boost the company's reputation and bottom line. There are many ways to invest in employees, including providing opportunities for professional development and growth, establishing company values, showing respect for their lives outside of work, embracing team-building activities, and offering fair compensation and valuable benefits and perks. Ultimately, having satisfied employees can lead to satisfied customers and ensure the long-term success of the business.

Employee retention and satisfaction

Establish company values

Having a clear set of company values is essential for employees to understand what the company stands for and whether their ethos aligns with their approach to work. This helps attract and retain employees who are loyal to the company's philosophy.

Provide opportunities for growth and development

Employees value career development and opportunities from their employers. This can be in the form of offsite education opportunities such as conferences or classes, creating cross-functional teams, mentorship programs, and individual development plans to help employees establish short- and long-term career goals.

Show respect for their lives outside of work

Prioritising work-life balance is crucial for employee satisfaction. Offering leave policies, remote work options, and flexible schedules can help employees manage their personal responsibilities, leading to higher productivity and satisfaction.

Embrace team-building activities

Fostering a sense of camaraderie among employees is essential to building loyalty and retention. This can be achieved through off-site events, all-hands meetings, and department-wide social events.

Offer fair compensation and benefits

Employees value fair compensation and benefits. Employers should ensure competitive salaries and provide quality benefit options, such as childcare services, free food, and unlimited PTO.

Recognise good performance

Celebrating work anniversaries, completed projects, and milestones is essential to making employees feel valued and respected. This can be done through team parties, individual bonuses, and other forms of appreciation.

Listen to employee feedback

Creating a culture where employees feel comfortable approaching their managers to discuss their career goals or potential job opportunities outside the company is essential. Listening to employee feedback helps create a more connected and satisfied workforce.

Provide resources for employee well-being

Employee well-being is crucial for retention and satisfaction. This can include offering healthcare benefits, as well as resources to support employees' mental and physical health.

Encourage open communication

Poor communication can result in misdirected efforts and talents, costing organisations millions of dollars annually. Investing in good training and informational materials guides employees to make effective decisions and take appropriate actions.

Foster a culture of innovation

Employees value the opportunity to innovate and experiment with new ideas. Google, for example, encourages staff to use 20% of their time on projects they are passionate about, resulting in innovations such as Gmail and Google Maps.

By investing in their employees through these strategies, employers can increase retention, satisfaction, and overall productivity, leading to a more successful and thriving organisation.

Company reputation

A company's reputation is one of its most valuable assets. Investing in employees can boost a company's reputation and help attract top recruits.

Attracting talent

A company that invests in its employees will have a better reputation than one that doesn't. This will attract new talent and help the company retain its best employees.

A company that is known for its employee development programmes will be more appealing to job seekers. This is particularly true for younger workers, who are willing to accept lower pay if the company's values align with their own.

Retaining talent

Employee retention is a challenge for many employers. By investing in employee development, companies can reduce the likelihood of employees moving on to other companies.

Employees are more likely to stay with a company if they feel valued and if their development matters to their employer. This can be achieved through training and growth opportunities, as well as showing employees that their work is meaningful and contributes to the company's mission.

Building a strong company culture

Investing in employees also helps to build a strong company culture. Employees who feel valued and respected are more likely to be engaged in their work and committed to the organisation. This can lead to increased productivity, innovation and performance.

A company with a strong culture based on employee development will also be better equipped to deal with change and innovation. Employees will be more willing to take risks and try new ideas, rather than running away from problems.

Reducing costs

Employee turnover can be costly for companies, with the price of replacing employees often being double their salaries. By investing in employees and building good relationships with them, companies can reduce the costs associated with employee turnover.

Additionally, companies that invest in employee health and wellbeing programmes can benefit from reduced absenteeism and lower healthcare costs.

Improving customer service

Engaged employees are more likely to provide effective customer service and convey a positive representation of the company. This can lead to increased sales and improved customer satisfaction.

Investing in employees is a great way for companies to boost their reputation and attract and retain top talent. It also helps to build a strong company culture based on innovation and engagement, which can lead to improved business outcomes.

Employee health and wellbeing

Investing in employee health and wellbeing is not just a nice-to-have for employers, it is essential for a productive and profitable business. A healthy workforce is a happy workforce, and this has a direct impact on the bottom line. Poor employee health is expensive, with annual health-related productivity losses costing employers $530 billion. Healthcare costs have been described as the "real corporate tax".

The COVID-19 pandemic has also brought employee health and wellbeing into sharp focus. The pandemic has resulted in rising healthcare costs and has highlighted the importance of mental health in the workplace.

So, what can employers do to invest in employee health and wellbeing? Here are some strategies:

• Offer health benefits: This can include providing access to online GP services, mental health resources, and wellness programs. These benefits show that the employer is committed to improving the health and wellbeing of their employees, both physically and mentally.
• Create a supportive work environment: This includes fostering a culture of health, safety, and wellbeing. Leaders should prioritise creating a positive, welcoming, and understanding company culture that supports employee health and wellbeing.
• Provide work-life balance: Employers should offer flexible work arrangements, leave policies, and remote work options to help employees manage their personal responsibilities and reduce stress.
• Promote team-building: Organise team-building activities, off-sites, all-hands meetings, and social events to foster camaraderie and a sense of belonging.
• Compensate fairly: Ensure that employees are compensated fairly and offered valuable benefits and perks, such as childcare services, free food, and flexible schedules.
• Recognise achievements: Celebrate work anniversaries, completed projects, and milestones. Show appreciation for employees' contributions through bonuses, parties, and other forms of recognition.
• Listen to employee feedback: Create an open and supportive environment where employees feel comfortable discussing their career goals and aspirations. Use this feedback to make informed decisions about employee retention and development.

By investing in employee health and wellbeing, employers can improve employee satisfaction, increase productivity, and reduce costs associated with poor health. It is a win-win situation for both the employees and the organisation as a whole.

Training and development

For example, a study by IBM found that staff members were 12 times more likely to leave a job if the company wasn't helping them grow in their careers. Similarly, a Deloitte survey found that 47% of 3,900 global respondents believed that their employers were making a significant investment in their professional development, but only 34% were happy with the level of investment.

It can also help to build a better team environment and culture, which can lead to improved teamwork and camaraderie between employees, and increased productivity.

In addition, training and development can help to foster employee loyalty, with many employees willing to accept lower pay if a company's values closely mirror their own.

Overall, investing in training and development can help to create a culture of engaged, happy employees, which can benefit a company in the long run.

Company culture and values

Establish Core Values

Clearly defined company values provide a sense of direction and unity for your employees. They should align with the interests and passions of your employees and reflect what is important to your company. Core values help attract and retain employees who are loyal to the philosophy behind your business.

Encourage Team-building Activities

Employees who feel like they are part of a team are more likely to be satisfied with their jobs and less likely to seek employment elsewhere. Off-site team-building activities, yearly off-sites, and department-wide social events can foster camaraderie and build a positive company culture.

Respect Employees' Personal Lives

Acknowledging and respecting your employees' lives outside of work is essential. Prioritising work-life balance through flexible schedules, remote work options, and generous leave policies can help employees manage their personal responsibilities without sacrificing their work performance.

Provide Opportunities for Growth and Development

Employees value companies that invest in their professional development. Offering training programs, educational opportunities, and cross-functional projects allows employees to acquire new skills and grow within the company. This not only increases employee satisfaction but also ensures a well-rounded and adaptable workforce.

Foster Open Communication

Poor communication can result in misdirection and costly mistakes. Investing in good training and informational materials guides employees to make effective decisions and take appropriate actions. Open communication also includes providing feedback channels for employees to voice their concerns and ideas, fostering a culture of transparency and trust.

Embrace Diversity, Equity, and Inclusion

Creating an inclusive workplace that values diversity and promotes equity is essential for a positive company culture. Embracing diverse perspectives and experiences fosters innovation and enhances problem-solving. Additionally, ensuring that all employees feel valued and respected improves morale and productivity.

Recognise and Reward Employees

Recognising employees' achievements and milestones boosts morale and makes employees feel valued. This can be done through various means, such as celebrating work anniversaries, offering bonuses, or hosting team parties.

By investing in these aspects of company culture and values, employers can create a positive and engaging work environment that promotes employee satisfaction, retention, and productivity. These investments are crucial for the long-term success and growth of any business.

Frequently asked questions