The Best Way to Retain Employees and Keep Customers

Judith M. Bardwick, Ph.D.

 It’s very strange: In all the years that I’ve been speaking and consulting to management about the hundreds of studies in many nations that clearly demonstrate that high levels of employee commitment and engagement predict financial success, I’ve consistently found that virtually no one in management has ever heard of these facts.

Here is a tiny sample of the data that overwhelmingly demonstrate that when employees feel positively about their organization and their work, financial results are high.

Over the years numerous studies found that when people are very positive about their job and their organization, feelings of commitment and engagement predict positive financial results. The average is a gain of 30% higher profits and a share price 2-3 times higher than a peer company with low scores. That happens simply because companies in which employees are really involved retain their employees and their customers.

The reverse is also true. When companies see employees only as costs and not as key assets, employees reciprocate with powerful negative feelings. Then, people come to work but they withhold discretionary effort, fear prevails, innovation disappears, and teamwork is only a slogan.

A critical leadership task is to create widespread awareness of this information throughout an organization as a first step in reinstating employees as stakeholders and as assets. The key message is simple: When employees are viewed and treated as critical resources and commitments are made to them, the probability of financial success increases dramatically.

The reverse is also true: when employees are treated as costs and not as assets, they feel abused and frightened for good reason. When people are neither trusted nor respected and their work is not regarded as significant, employees quit even if they come to work. The real cost of a non-engaged or an actively disengaged employee is enormous because they alienate customers and customers leave. So do sales and profits.

In fact, too many people are misers with praise and rewards. And, more the pity, they’re proud of it. As a result, the most prominent current practices regarding employees essentially guarantee high levels of negative feelings and low levels of commitment and engagement, a sure route to failure. Many executives are unwittingly treating even valued employees in ways that will almost certainly assure employee alienation.

Even when the economy was good, in many countries about half of all employees felt vulnerable economically and psychologically. I call these feelings a “psychological recession,” the feeling thatWhile the present is awful the future will be worse.” Prolonged fear and depression invite failure because scared and alienated people can neither concentrate, nor focus, nor innovate. Chronic anxiety depletes people of their mental energy.

The first task is to create real awareness at every level of an organization that treating employees only as costs creates serious problems with powerful negative effects that impede success, and there are policies and practices that make success much more likely. In order to have an impact, the message must be in line with how people are actually feeling and be simple, brief, and focused. It must begin with a sense of alarm that is based on the organization’s reality and then move to the idea that when the core issues are faced, the right changes can be made and success and a better future become very likely.

Anxiety and fear can be reduced by opening the books and telling people the truth about what is known and what might happen, by being clear and specific about what people are expected to do, and by making as many people as possible part of the change process. And everyone must be working toward goals that are achievable because nothing motivates people more than being successful.

 

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