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Companies that treat employees well see payoffs in profits: The proof

Boost your business by prioritizing employee well-being. Learn how a people-first approach and positive work culture lead directly to enhanced performance and success.

Ron Romanik

We all know that keeping customers happy is critical to business success. But businesses don’t always appreciate how keeping employees happy impacts the bottom line.


Researchers writing in the Harvard Business Review set about trying to understand how important employees are to business outcomes. They discovered strong payoffs for finding and keeping experienced workers.

How much does employee experience matter?

50%

increased store revenue

45%

potential profit increase

16.5%

higher performance of Fortune 100 "Best Companies to Work For"

50%—Increased revenue that stores could earn by moving from the bottom to the top quartile in employee experience metrics

45%—Increased profits that stores could earn by moving from the bottom to the top quartile in employee experience metrics

16.5%Percentage by which businesses on the annual Fortune 100 Best Companies to Work For list outperformed the broader market during the COVID-19 shutdowns of 2020

The Harvard researchers studied a large global retail brand, looking at three years of employee and financial data from more than 1,000 of the company’s stores. They controlled for factors such as time of year, demographics, and income of surrounding areas, as well as local demand shocks.


What they found was striking. In stores where more customer-facing employees were full time, higher skilled, had more tenure, and had more rotations in a particular role, the amount of sales per hour was far higher. The researchers calculated that stores could increase their revenue more than 50% if they moved from the bottom quartile to the top quartile in the four metrics they studied. Even accounting for the higher cost of more experienced employees, profits would increase by 45% in that scenario.

More evidence that employee experience makes a difference

The analytics company Gallup has repeatedly established a link between employee engagement and good business results. Their research has found that:

Business units with highly engaged employees had 10% higher customer loyalty/engagement, 18% higher sales, and 23% higher profitability than those with the least-engaged employees.

Not surprisingly, Gallup found that those with the most highly engaged employees had lower turnover rates:

…for high-turnover organizations, 18% lower turnover

…for low-turnover organizations, 43% lower turnover

Engaged employees may help companies rebound after a recession

True CX transformation requires a shift in organizational mindset. Prioritize customer needs throughout the company, from leadership to frontline employees. Put togEconomic headwinds this year may make employee retention less of a concern for businesses than it has been the last couple of years. But that doesn’t mean they can ignore employee engagement.


Gallup found that a highly engaged workforce may help companies rebound after a recession. The company’s research shows that businesses with more engaged workforces have higher earnings per share. And, after the 2008 recession, those companies’ earnings per share recovered and grew faster than other companies in their industry.


FTSE Russell, the global index and data provider, looked at market performance on its index for companies on the Fortune 100 Best Companies to Work For list. It found that those businesses outperformed the broader market by 16.5% during the COVID-19 shutdowns of 2020.

The link between employee satisfaction and customer satisfaction

The workplace review company Glassdoor looked at how employees rated their employers and how those same companies scored on the American Customer Satisfaction Index. Glassdoor found that companies with more satisfied employees also had more satisfied customers.


Improvements of one point on a five-point employee satisfaction scale for companies were associated with a statistically significant increase in customer satisfaction. And for companies in “high customer contact” sectors, the effect was more than twice as large.

Customers care about employees

Another reason for businesses to focus on employee engagement? Their customers care about it. Research by PWC shows that environmental, social, and governance issues increasingly matter to consumers—and that extends to employee treatment. PWC surveys indicate that:

76% of consumers would quit using companies that treat employees, communities, and the environment poorly.

54% expect more from companies on governance issues, such as addressing a widening pay gap, and 48% want companies to show more progress on social issues.

The employee experience at Ubiquity

At Ubiquity, we’ve made a long-term investment in people and culture, and that’s paid off. We’ve been certified as a Great Place to Work® based on employee feedback measuring multiple aspects of the employee experience.


As the statistics above suggest, that’s a distinction that is not only good for our employees, but also for the businesses that rely on us for high-quality business process outsourcing.

Learn more about why Ubiquity has been certified as a Great Place to Work®.

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