Do Happy Employees Equal a Better Bottom Line?

Contributing Business Writer

Collette McKenna Parker

September 17, 2008

T ake Your Dog to Work Day is so 1990s.

The concept of keeping employees happy at work has shifted beyond cute pets and casual Fridays and - hey, here's a concept - toward the actual employees.

Consider Porter Keadle Moore, an accounting firm that promotes the psychological health of its employees as a top priority. The company mandates vacations before heavy tax seasons and has early release Fridays in the summer. Employees are encouraged to put their families first and are offered part time, flex time and work from home options to do so. Employees are mentored, given opportunities for professional development in and out of the office, and follow a Career Track Planning Guide, which "specifically details the requirements and expectations through each level of the organization - from intern to partner," according to Deborah Sessions, partner and COO with PKM. "Employees know what they need to do to progress to the next stage in their career."

The focus on each employee as an individual with a family, outside obligations, and a desire for professional and personal fulfillment is driving a new movement in employee retention, and most of it doesn't cost a penny.

Randy Hain, managing partner of Bell Oaks Executive Search (which has been selected as one of the Atlanta Business Chronicle's Best Places to Work for the past two years), has been interviewing folks about their jobs for more than 20 years. In his observations he has noted that people rarely leave a company for more money. Overwhelmingly, he says, they leave because they were not mentored, grown, developed or appreciated. "Employees leave because of the relationships they have with their immediate supervisor. When I ask about someone's last year at a company, he or she usually says they did not get any feedback or a chance to move to the next level in their career."

Employers are often guilty of focusing primarily on revenues. Especially for entrepreneurs and small business owners, who have enormous pressure to grow rapidly and produce profits, the bottom line reigns supreme. It sounds counterintuitive, says Hain, but a switch to making employees happy will automatically lift the bottom line. "I advocate focusing on people and developing them. They will drive the revenue," says Hain.

Here are a few ideas for keeping employees happy, and keeping your happy employees.

1. Talk to employees.

Every quarter, ask your employees what they want. Have breakfast or lunch with individuals or small groups and ask them what they need to be successful. Employers are sometimes afraid to ask, says Hain, but, "You can always say no. You'll be surprised how rational and reasonable people are. As a leader in a small business you have to demonstrate that you're a good listener and empathetic," says Hain.

Also, communicate goals clearly. Share the values and strategies for the company. It's not enough to list company values on your Web site and expect employees to feel inspired.

2. Mentor and develop employees.

Scott Mills, president of William Mills Agency, and Hain are both big advocates of professional development. The William Mills Agency, a 31-year old Atlanta PR firm, holds three "lunch and learns" a month, when different employees are in charge of a presentation or inviting a guest speaker. In addition, each employee has a professional development budget (the amount is based on their position) that they can spend on books, Web seminars or other private learning opportunities. And, "There is an expectation that they spend time doing it, usually 65-plus hours per year," says Mills.

Mills also incorporates sabbaticals for his long-timers. Every five years employees get three additional weeks of paid vacation to pursue an interest. He has one employee in Paris (she telecommutes - Mills also has full time employees who live in Maryland, Tampa and Mobile) who says she has more time off than the French.

At Bell Oaks, Hain's office picks a business book, reads it individually and goes through it together at staff meetings. "We want our teams to be fluent in business language and ideas and to know what the trends are," says Hain. (They even have a recommended reading list on their Web site www.belloaks.com, with books and summaries for clients, or any one else. By the way, Hain recommends Heroic Leadership for entrepreneurs.)

Bell Oaks has also created a mentoring program. Interested employees are matched with an appropriate mentor to help them rise to the next level in their career. If the company doesn't have anyone internally, Hain uses his contacts outside the office to find a suitable match. Hain recently matched an employee, a CPA, with a senior principal at a large accounting firm. They regularly meet for lunch, and Hain says his employee has gained a lot of insight from her. "As a president of small business you probably have great contacts. Ask your friends to invest a lunch or breakfast in your team members and watch how you can unleash their potential," says Hain.

3. Do volunteer work together.

Inspire the company through community involvement - whether doing a Habitat for Humanity project or working at a soup kitchen together for an afternoon. Hain has a "wall of giving" in his office, which displays reminders of past company service acts. Employees pass the wall every day on their way to their desks, and, "They can go to their office knowing they are doing something meaningful," says Hain.

4. Celebrate tiny victories.

Give a $20 Starbucks card to someone who has worked really hard the past week. Send an email to let the rest of the company know.

5. Be honest about the challenges your company faces.

Your employees aren't dumb. The economy is in trouble. How does that impact your company? Are revenues down? Let them know you are all in the same boat, but be positive. "Say, 'We're going to grow. It may not feel like the best year ever financially, but we will stick to our values,'" says Hain. Share the steps for success with employees and reassure them that current challenges can be overcome. 

6. And, of course, good benefits are nice, too.

Companies that pay 100 percent of a monthly health insurance premium – like William Mills and Bell Oaks – are few and far between and in a shrinking minority of companies, but the investment makes employees feel valued. William Mills also offers a SEP (simplified employee pension plan) which is a retirement plan into which the company invests parts of its own profits.

Most of these ideas, observes Hain, do not cost a penny.

"If the goal is employee happiness, do what you can to help them grow professionally and provide an environment for them to do that," says Mills. "There's no final destination, but try to work daily at being a better employer.

And, thankfully, like Mills, you don't have to welcome any potentially non-toilet trained furry creatures into your office. "We still haven't done bring your pet to work day."

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