HR at the Table: Exploring Why People Equal Profit

March 10, 2021 by Verified First

Blog: Exploring Why People Equal Profit

We’ve all been in a job where it’s clear profits are more important than people. To some extent, we get it. Money makes the world go round, right? But what’s the answer to people versus profit? Ultimately, companies need both to conduct business, but how can organizations address them together? With insight from MSI’s VP of HR, Chris Courneen, we’ll explore why people equal profit and how one supports the other. 

What is People vs. Profit?

The COVID-19 pandemic illuminated many companies’ beliefs on the idea of ‘people versus profit.’ Executive leadership teams faced the hard reality of putting this idea at the forefront of their decision-making. Whether it be transitioning to a remote workforce, implementing hiring freezes, laying off or furloughing employees, or facing the unfortunate reality of closing their doors — companies had to act swiftly to transform their operations as they knew it. 

MS International (MSI) adopted the mantra that their main job is to protect their people’s jobs and livelihoods, voicing their belief that ‘people equal profit.’ 

In our HR at the Table series, MSI’s VP of HR, Chris Courneen, realized, “I can’t protect [my employees’] livelihood if I can’t protect the business.”

Investing in your employees is not a zero-sum game. Their “gain” is not your “loss.” Yes, you might cut costs by eliminating employee retention efforts, but that doesn’t incentivize employee buy-in.

Not convinced? According to Aptitude Research, it costs $4,129 to onboard a new employee but 6 to 8 months of an employee’s salary to replace them.

An organization’s investment in talent means nothing if you can’t retain talent and engage them enough to be productive. 

The Importance of Employee Engagement on Profit

Think about it. If a company values profit over people, they essentially invest less in their team. Profit over people is a short-term game because it doesn’t offer employees an incentive to buy into the company for the long-term. 

A company can’t be “long-term profitable without caring for their people,” Chris expressed.

The stats speak for themselves:

  1. Companies are 21% more profitable when they have high employee engagement.
  2. 69% of employees said if they were better appreciated, they would work harder. 
  3. Boredom is the main reason why 1 in 3 professionals leave their jobs
  4. 74% of employees find that a strong company culture directly improves their customer service. 
  5. Having a strong company culture increases revenue by 4x

Employee engagement increases loyalty, retention, and productivity — which in turn, increases profits and protects your bottom line.

Executive Buy-in on Improving the Employee Experience

Now, the reality is, you can’t have one department (HR) carrying the entire employee experience alone. The employee experience has to be validated by executive leadership.

According to LinkedIn’s 2020 Global Talent Trends:

  • 55% of TA professionals can’t find the budget to improve the employee experience.
  • 48% don’t have enough time to improve the employee experience.
  • And 43% can’t get leadership to back them up.

Removing the roadblocks to improve the employee experience starts with getting executive buy-in. All of the above issues can potentially be solved by establishing executive support in the idea that ‘people equal profit.’

Backed by executive leadership, Chris’s first investment in his company was recruiting and retaining talent. He did so by aligning with his executive team, communicating bottom-line impact, and building an effective and automated tech stack, including an automated ATS and background screening process. 

By doing so, Chris had the freedom to invest in employee engagement initiatives and support the company’s bottom line.

Start gaining executive buy-in on the employee experience by:

  • Defining what it is 
  • Deciding how you’ll measure and evaluate it 
  • Communicating what it means to the health of the company (think ROI)

Promote Employee Engagement Through Workplace Culture

Unfortunately, 57% of TA professionals cite that not enough people are dedicated to improving the employee experience, uncovering the fact that employee engagement goes beyond the executive team as well. It’s a company culture thing

At MSI, Chris believes their success at recruiting and retaining talent directly relates to their commitment to a strong and inclusive culture. 

According to Eagle Hill Consulting, 77% of employees believe a strong workplace culture empowers them to produce quality work, and 76% find it increases productivity and efficiency.

To build a strong company culture, consider:

  • Starting with the foundation. What are your values, vision, and mission?
  • Leading by example. Your leaders need to be on board before your employees will be.
  • Educating your team. Share your mission, values, and long-term vision with your employees. 
  • Building transparency. Encourage people to speak up if they think they see something contrary to who you are as a company. 

Conclusion

Employee engagement is essential, and we have the data to prove it, and now we’ve come full circle. You can’t have profit without people, and you can’t have people without profit — so really, people equal profit

To hear more on this topic and the concept that people equal profit, watch episode two of our HR at the Table series on-demand.

For another perspective on people versus profit, join us for episode three of HR at the Table for a discussion on how HR technology and work intersect to retain, engage, and optimize talent. Register today!

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