Businesses exist for people, whether the customers they serve, the workers they employ or the communities they enrich. They have the responsibility to provide not just valuable products and services but a stable work environment and access to the American dream.
No matter how advanced technology becomes, human beings are the beating heart of any enterprise. And businesses cannot succeed in the long term unless their people do.
History has repeatedly proven that a strong workforce is the foundation of a stable, prosperous nation. At the end of the day, workers aren’t just workers; they’re also parents, spouses, community members and citizens. And when their shifts end, their impact on the economy continues. People use their salaries to buy groceries, pay mortgages, save for retirement and splurge on all manner of recreation and leisure, such as vacations, concerts, TVs, gym memberships, movies and dining out.
We can’t forget this. I believe that the primary goal of a business is to be profitable in order to compete, innovate and provide stable jobs, but I also believe that there are many paths to profit—and that the best ones take into consideration financial performance and the health and happiness of the people who make performance possible.
It might be easy—even tempting—to use technology as an excuse to underinvest in workers, put off preparation or mistake immediate gain for sustainable growth.
In the interest of our businesses, our country and our society, we have to relearn an old lesson: focus on both profits and people.
The idea that people are important to a company’s success is well understood in the business community. A cursory search turns up thousands of articles indicating that business leaders are looking for better ways to hire, retain and utilize top talent. Yet research shows that many companies are drastically underinvesting in their workforce.
In a tough economic environment, it can be painful to sacrifice short-term gain for investments that won’t bear fruit for many years—investment in things like digital and blended coursework, mentorship, employee benefits, culture and morale, and talent recruitment and retention.
Yet as a number of successful businesses have demonstrated, this is exactly what’s needed to jump-start our economy and advance our workforce. To fix the skills crisis, all companies need to prioritize investments in workforce development.
Whole Business, Whole Worker
Costco has competitive advantages in its low pricing and commitment to passing on savings to its customers. But it also has a people-first ethos.
Costco has invested heavily in human capital. It not only pays its workers an average of $16.41 per hour, well above the industry average; it also offers health insurance to both part-time and full-time employees and advances workers through promising leadership pipelines. Costco’s investment in its workforce is unrivaled. But its commitment to its people hasn’t weighed down its bottom line or made it less competitive. On the contrary, that commitment has solidified the company’s brand as one that cares about its customers and its employees—a fact that can be supported by an 86 percent customer satisfaction rate.
By prioritizing people, Costco has achieved consistently higher sales growth than other large discount stores offering lower worker pay. The company has tested and proven what we’ve all heard about employee engagement: employers don’t have to choose between supporting their workers and supporting their business. People and profits go hand in hand.
How well businesses are able to support their workers will determine which ones are successful in the future. This is especially important to acknowledge now, as the coming wave of automation presents two very distinct opportunities for business leaders. There’s the scenario in which we opt for short-term gain, underpreparing workers for the transitions ahead, and leaving the benefits of technological progress to an ever-shrinking segment of the population. Or there’s the scenario in which we provide workers with a sturdy safety net and the right skills to thrive, thereby broadcasting the benefits of innovation far and wide.
Flexibility Is Key
Many of today’s families are busier and under more financial pressures than previous generations. We live in an era when the majority of households with children under age 18 have both parents in the workforce. Yet, even with two incomes, it’s difficult for many people to afford the high cost of living, especially in America’s coastal cities. That’s why, as I wrote at the outset of this book, we’ve found that one of the most important benefits we can offer employees is flexibility.
As with many companies, our success hinges on the ability to attract top talent, which is why it was so alarming when we ran into difficulty hiring effective underwriters. In many instances our top prospects didn’t want to uproot their families or change their lifestyles to come to our headquarters in Manhattan. We knew that either we could resign ourselves to a “brain drain” and miss out on the best talent in the industry, or we could amend our workplace policies to untether our workforce from specific geographical hubs. In the end the choice to open up the potential for remote work was an easy one. Not only do underwriters complete highly specialized tasks that can be done on a home computer, the job itself requires little in-person interaction and is easy to monitor. Today Guardian’s high-performing team of underwriters work from all over the country.
Our success in this endeavor squares with the desires of the modern-day worker. As the 2018 Global Talent Trends study found, 51 percent of employees want more flexible work options. Increasingly, supporting workers on the clock means that rather than asking them to adapt to us, we must adapt to them.
Personal Lives Matter
It goes without saying that productivity and workplace performance suffer when people are going through something traumatic, but the circumstances don’t have to be life threatening to be mentally taxing. Understandably, financial hardship can distract employees and drain productivity. The Money and Mental Health Policy Institute, a nonprofit organization that studies the link between finance and mental health, found that financial difficulty can adversely affect employees’ relationships with colleagues, diminish their motivation and increase the likelihood of absence due to sickness.
A lot of what happens in employees’ lives when they’re off the clock affects how they perform when they’re on the clock. Companies can’t be fully responsible for employees’ wellbeing, but they can do their part to make those employees feel more secure.
Tie Purpose to Performance
One hallmark of the technology industry is the so-called perks arms race. Fierce competition for talent has led to an almost comical number of offerings such as game rooms, massage therapists, nap pods, yoga studios and elaborate cafeterias.
Perks have an undeniable novelty appeal. They are said to inspire innovation, make life easier and more convenient, and carry particular weight for people in demanding, high-pressure jobs. But perks alone won’t cultivate a talented workforce. Extraordinary performance is not born out of a desire for flashy rewards or office snacks; it’s born out of purpose.
We work harder and produce better results when we’re all rowing in the same direction with a clear mission and vision—and when we know other people are counting on us, whether they’re our coworkers or our customer. As a business leader or manager, the most important thing we can do is to emphasize that our collective purpose is bigger than any individual and that every single person has a stake in fulfilling it.
There are a lot of ways to put people first. We can support employees by increasing their pay, revamping their benefits packages, and making sure our time-off and remote-work policies reflect the realities of a society in which many households are led by working parents. We can give our employees a sense of purpose and help them realize their potential, too.
Any action is better than no action. When change feels difficult, I like to remember that even small initiatives can have an outsized, life-changing impact on people.
Excerpted from Hire Purpose by Deanna Mulligan. Copyright (c) 2020 Deanna Mulligan. Used by arrangement with the Publisher. All rights reserved.