why job satisfaction is important to your bottom line.

You might have noticed a trend among popular tech companies: they’re regularly recognized as some of the best companies to work for. From Google to Apple to newly launched startups, there’s no shortage of stories about their amazing cultures, innovative approaches and talented teams. But have you ever considered this basic question: why is job satisfaction important?

It's because happy employees are the key to driving innovation, productivity and success. Tech companies have figured this out, so they're going all out to attract and retain top talent in a highly competitive field.

the perks of satisfied employees

attract the best talent

There’s a reason top companies are at the top. They’re smart enough to know that high employee satisfaction is at the heart of their success. They offer their employees the tools, perks and compensation to inspire them to give their work their all. In doing so, they attract highly skilled people who contribute to their success. And because they’re successful and their employees love working for them, they continue to attract more top talent. It’s a great big circle.

retain star employees

Happy employees are more likely to stick around. Losing star employees is one of the most costly areas of doing business. Star employees are leaders and top drivers of results and revenue — they’re often at the heart of a team and can impact the performance of others around them. Depending on the company structure, losing one standout employee can lead to a waterfall effect that triggers other employees to leave or become demotivated.

reduce turnover costs

Replacing employees is expensive. Recruitment, training and onboarding, exit interviews and making hiring decisions aren’t cheap. There are all kinds of stats about how much it costs to replace employees of all experience levels. According to one study, it can cost over 200 percent of an employee’s annual salary to replace them if their role is highly specialized, as many tech jobs are. Even replacing workers in low-skill jobs will cost you as much as 20 percent of their yearly salary. It’s the equivalent of paying the worker for 2.4 months! Let that sink in for a moment. And remember, that’s the low end. Even marginally lowering turnover can mean significant cost-savings long term.

productivity goes up

Engaged employees are productive employees. They’re absent less often, less likely to be involved in health and safety incidents, and more likely to consistently deliver high-quality work. We’ve all had to perform a task we hated. It sucks. You drag your feet and take your time because you just don’t want to do it. You procrastinate or maybe complete the task too quickly and a little more sloppily than you should have. That’s not good for anyone. Employees suffer, as does the business. Put employees’ needs first and productivity will pick up, we promise.

customer satisfaction

There’s a new business model replacing “customers first.” Today’s top employers are recognizing that an “employees first” policy is the true route to success. Happy employees are more positive, engaged and likely to make customer service a priority, taking care of that whole “customers first” thing all on their own. When you’re miserable, you’re grumpy and probably not all that fun to be around. The reverse is also true. When you’re happy, you’re more likely to go out of your way to make others happy. Positivity is contagious, and that’s true in workplaces, too.

business results

There’s a proven correlation between employee satisfaction and business results. Companies with the happiest, most engaged employees are more likely to have higher profitability. Basically, when everyone is happy, the business results follow, which shouldn’t be surprising. After all, we’ve already discussed how happy employees are more productive, better at serving customers, and less likely to leave. Of course, happy employees are good for the bottom line.

how do you improve job satisfaction?

foster respect and trust

Trust and respect are the foundation of a happy workplace. Studies have shown that dislike of a boss (aka lacking trust or respect for them) is the number one factor that leads employees to leave their jobs. If you hate your boss, it seeps into just about every other area of your work. Positive leaders create a workplace where employees feel valued. Remember, trust and respect go two ways. To be trusted and respected, leaders must offer employees a reason. Trust and respect underscore just about everything else in a workplace, so if you’re going to work on one area, make it this one.

job security

Ever worked somewhere where there’s a general air that layoffs are coming down the pipeline? Even if it’s just a rumour, it creates a certain paranoia, and it’s not a positive atmosphere to be hanging around in. Everyone’s on edge and worried their job is on the line, whether or not it’s actually true. According to Randstad’s Employer Brand Research, job security is one of the most important factors (after salary/benefits and work-life balance) to Canadian job seekers. Feeling like their job is secure provides peace of mind so employees can focus on other things — like their productivity.

prioritize health and safety

Safety is one of our most basic human needs. On Maslov’s hierarchy of needs, it’s second. Only physiological needs like food, water and shelter are more important. A workplace should always put health and safety initiatives first — there’s absolutely no excuse for asking employees to perform dangerous tasks or put their health at risk. Doing so will irreparably damage their trust in you as an employer. A safe workplace doesn’t just involve physical safety, either. Mental and psychological safety are also important. Offering employees health and dental benefits, personal days and opportunities to take time off without repercussions will keep employees happy and working at their full potential.

opportunities to advance

It’s human nature: we don’t like to feel like we’re stagnant. This is especially true among top achievers. Top achievers are always looking for what’s next; it’s part of what makes them so successful. Opportunities to learn and progress are key drivers for them and most employees. How do you make it clear that advancement is encouraged? Offer training and development programs. Ensure employees are encouraged to learn new skills and take on new challenges. When hiring decisions need to be made, look within the organization first before looking externally.

competitive pay and benefits

Last but not least: staying competitive with compensation and benefits. Evidence suggests pay and benefits are most important to job satisfaction when bringing a new employee on board. Compensation-wise, getting started on the right foot is essential when making new hires. After employees have settled into their roles, they’re less likely to make compensation a bone of contention unless their pay falls below market value. As long as salaries continue to steadily rise with the market, everything we discussed above (trust, whether they like their coworkers, job security, opportunities to advance, etc.) is more likely to contribute to employee happiness and retention.

Why is job satisfaction important for business? At the end of the day, business is a two-way street. You get what you give. Treat your employees well and reward them for a job well done, and they’ll return the respect and give you their A-game.