The first thing that comes to mind upon reading about employee ownership for many is an Employee Stock Ownership Plan (ESOP), but actually, what is more crucial is the sentiment that is engendered by ESOPs and their ilk — the sense of personal investment that employees can have in their companies. Building this feeling is potentially the greatest weapon in the arsenal of small to medium business owners who often don’t have the resources available to competitively compensate their key employees. Losing an employee costs a company, on average, 20 percent of that employee’s salary, if they’re a low-level employee. Executives can cost up to 230 percent of their salary. If for no other reason than the bottom line, business leaders should think long and hard on the financial benefit of fostering a sense of employee ownership in their company.
Although immensely complicated and multifaceted, literal employee financial investment in the company can be a great way to build a sense of common purpose. In fact, for many employees, this can be a powerful motivator for success. The modern zeitgeist has more recently come to include the belief that this method of employee inclusion is a little old hat — but simultaneously many startups in the tech industry rely heavily on employee ownership to attract competitive talent at rock bottom prices.
Doing Good Works
One of the greatest lessons from TOMS Shoes is not that you can do well by appearing to do good (although they did succeed at this) but rather that desire to do good works exists within employees as well as customers.
You don’t have to tell your customers about any charitable actions that the company takes, but you should tell your employees. By giving your employees a sense that the company isn’t just a greenback-focused organism, you’re easing the weight of the great American guilt complex. Your employees will be grateful to you for that, even if they don’t realize it.
Allowing Company Review
Alongside the peer review should stand the company review. Although it’s pedantically stated that employees can voice their concerns and opinions on the direction of the company in any setting, more often employees feel shy or threatened while speaking up, or employers or managers believe that they know best and ignore suggestions. This self-assuredness is part of what leads many to start or operate companies but can also be their hubris.
Not only will allowing the employee a venue to discuss their opinions help them to feel a greater sense of belonging and ownership, but it will actually help the company to foresee potential setbacks and disasters. No one wants to run a company that lurches from crisis to crisis. Ultimately, even if you don’t hear the employee’s review, others will.
Providing Career Advancement Programs
There little that is more frustrating than sitting at a 9-to-5 with aspirations of more, watching the clock and calendar march eternally onwards. Employees who are most investedin their companies do so because that company has given them the opportunity to advance their career. Employee training programs and hiring from within are inexpensive and cost-effective methods of deepening employee ties to the organization.
By promoting from within, you’re creating an employee that knows multiple different rungs of the ladder. This means they can hit the ground running because of their familiarity with other staff, company policy and goals and ideas that they’ve developed over the course of working for your organization. They’ll be able to enact these ideas faster and will have the longevity to see them through due to their deepened company loyalty.
Cultivating a Strong Work-Life Balance
Probably the most effective way to feel balanced in work and life is centered around employees’ families. By giving employees extra time for things like paternity leave you’ll engender not only a sense of gratitude but loyalty; people want to take care of those who take care of them. By even partially covering daycare costs, employees will be able to return to work faster and will be more motivated to continue working with your organization.
Family care, including maternity and paternity leave as well as daycare compensation, is often seen as massive costs, but it pays distinct dividends. As well as avoiding the 20 percent salary loss from employee flight, there is evidence that by increasing work life balance, and thereby employee engagement, companies can increase their financial performance significantly.
This is one that’s often overlooked and very subtle. Being polite and respecting the time and efforts of employees shows that you value their efforts and contributions. It will have pour-over effects into the attitude of the entire workforce, making everyone more polite and thoughtful toward each other. After all, we are invariably a reflection of those, we spend our time around.
With these efforts of treating employees better, business owners stand only to benefit. Even if you are a scrooge, surely most business owners can see the cents in fostering employee investment.