Employee Engagement
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The link between engagement, trust and revenue

By Jen Wetherow

For more than two decades, companies on Fortune’s list of 100 Best Companies to Work For have provided three times the return of standard stocks (Figure 1). One thing they have in common? These are large companies that dedicate considerable resources toward employee engagement. It seems that a correlation clearly exists between organizational trust, employee engagement and performance.

On April 27, The Globe and Mail will release Great Place to Work® 

Canada’s annual list of Best Workplaces™ in Canada. But what makes one firm “better” than another? What makes the difference between good, better and best?

According to Great Place to Work®, the firm behind Fortune’s list of 100 Best Companies to Work For and The Globe and Mail’s list of Best Workplaces™ in Canada, the differentiating factor is trust. But does trust lead to superior performance or vice-versa?

Figure 1: Stock returns of high-trust cultures

Figure 1: Stock returns of high-trust cultures

In 2015, London Business School professor of finance Alex Edmans gave a TED Talk on his research on the link between employee wellbeing and business performance using data from Great Place to Work®. The study revealed employee wellbeing led to positive financial performance, not the reverse. Treating employees well creates higher-quality delivery of products/services.

So how is strong employee wellbeing created at organizations to drive revenue?

Lesson 1: Inclusion over diversity

A great workplace is only great if the whole workforce experiences it. Successful leaders leverage every ounce of human potential, recognizing diversity as a competitive advantage. There is now an emphasis on inclusion, as well.

Example: Every BMO recruiter is trained on the importance 

of inclusion in recruitment, attending sessions focused on teaching recruiters to eliminate bias in the talent acquisition process.

Lesson 2: When leaders are effective, so is the business

The best leaders have a few common characteristics:

  • They are credible and communicate their vision for where the company is going and how they’re going to get there.
  • They respect and appreciate employee efforts.
  • Promotions and recognition are based on merit, not age or race.

Example: IndustryBuilt helps develop leadership skills with 10-minute “scrums.” These meetings provide weekly updates and are hosted by a new employee each week. Employees have the opportunity to develop their public speaking and confidence for future leadership roles.

Lesson 3: Innovation rules

There is immense pressure on organizations to be innovative and agile. The frequency of change is a main challenge that executives must constantly contend with, which creates a demand for more innovation and agility. The most agile organizations are defined by:

  • Change-readiness
  • Quick adaptation practices
  • Understanding customer needs

Example: At Cadence, a single decision-making method for complex decisions, called Debate, Decide & Communicate exists. It requires participants to speak openly, debate ideas and consult candidly with parties involved, enabling decisions directly impacting success.

So what are the business impacts of creating a culture of employee wellbeing? According to Great Place to Work®, listed organizations grow faster through executive effectiveness and high innovation. (Figure 2)

Figure 2: Median year-over-year revenue growth of list contenders

Figure 2: Median year-over-year revenue growth of list contenders

This understanding of great workplaces is based on 30 years of research compiled by the Great Place to Work Institute. Each year, the Institute surveys over 7,000 organizations, in 55 countries, representing roughly 12 million individual employee voices. The primary determinant used in selecting winners is a confidential, internal employee survey. 

Jen Wetherow is senior director at Great Place to Work Canada.

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