Investing In Employees Pays Huge Dividends

Everyone talks about budgeting for advancements in marketing and new technologies, but hardly anyone has a strategic goal of investing in their employees.

Why is that? Is it not important?

Your employees are the lifeblood of your organization. For that reason, they should be the main focus of investment, because they are a significant component to creating greater revenue.

The longer an employee has been at your organization, the better he/she:

  • Knows your products and customers.
  • Understands your processes and procedures.
  • Enjoys deeper relationships across the organization and the market.

Investing in your employees has many benefits, including increased customer loyalty and satisfaction, quality referrals, engaged employees, and, ultimately, increased revenue.

Increased Customer Loyalty and Satisfaction

In business, relationships are key. It’s common to hear from clients phrases like: “I hate it when my vendors are constantly changing my account managers.” That’s because dealing with the same person creates consistency of service and customer loyalty. If there is constant turnover, it can make business feel like just a transaction.

High employee retention rates drive both client and employee satisfaction, lower operating costs, and mitigate risks. It also allows you to be more competitive, provide better service to clients, control costs, and contribute to revenue.

A study by the Medallia Institute found that employee retention drives customer satisfaction. They studied 800 different locations of one business, and the locations with the best retention rates also had the best customer satisfaction rates.


Satisfied clients are more likely to refer your organization. Texas Tech revealed that 83 percent of satisfied customers will refer you, but only 29 percent actually follow through with a referral. So, help your customers follow through. Remind them and ask for referrals. Having an existing and consistent relationship with your clients will help the 83 percent of satisfied clients actually follow through.

At the same time, investing in employees creates a workplace culture that values good ideas. If your workplace environment is positive, and people enjoy working at your organization, then they’ll tell others about it, which will attract more top talent. It’s a win-win situation. You get quality talent from your current talent, and your employees get to work with their favorite colleagues.

You can also promote from within, and keep your top talent at your organization. Employees want to be promoted and move up the career ladder, so make it easy for them to do so. Posting internal job openings to your current employees allows them to consider switching positions (if they’re qualified) and gives them additional options to stay in your organization.

All of these options give you quality referrals from your clients and your employees, and can help improve your retention rates and revenue.

Engaged Employees

Consider this fact: only 32 percent of employees are considered engaged at their job, according to Gallup. Everyone else is either not engaged (50.8 percent) or actively disengaged (17.2 percent).

An employee’s engagement has a significant impact on the organization’s productivity and bottom line. Gallup revealed that organizations with high employee engagement had the following percentage increases: 10 percent customer ratings, 22 percent profitability, and 21 percent productivity. On top of that, they also experienced lower turnover.

Research from the Hay Group shows that organizations with high employee engagement scores generated 2.5 times the amount of revenue.

So, how do you engage your employees and experience these benefits? By doing these three things: recognize, reward, and train. Let’s go through each one.

Recognize Them

One of the best ways you can show your employees that you value them? Recognize them when they do something good.

A survey by David Novak and Harvard Business Review found that 82 percent of employed Americans feel that their contributions aren’t recognized enough by their managers, and 40 percent say they would be more engaged and motivated if they received more recognition.

It feels great to be recognized by a manager, but it’s also nice to know your co-workers recognize when you do a good job. Allow your employees to nominate each other for going above and beyond, or simply doing a good deed. You can also send out a weekly email showcasing the employees who have been nominated to be recognized.

Another way to do this is to have your employees set goals at the start of the year, and accomplish them throughout the calendar year. If an employee completes a goal, it’s another good opportunity to recognize them and share their accomplishments.

Reward Them

Along with the goals and recognition, it’s also important to reward your employees. That could be a gift, a raise, or a bonus. These rewards show employees that you value them and that they are important to the organization.

Ann C. Dzuranin, an assistant professor at Northern Illinois University, and Nathan Stuart, an associate professor at the University of Wisconsin, Oskosh, conducted a research study by observing a group that was performing for cash incentives and another group that was performing for non-cash incentives. The non-cash incentive group outperformed the cash incentive group, and also exhibited greater commitment and motivation. This shows that you don’t necessarily have to reward your employees with money, and in fact, it may be better if you don’t.

Your rewards don’t have to be huge or costly, but a little goes a long way. From a handwritten letter to a holiday bonus, your employees will feel appreciated.

Train Them

Another way to show appreciation for employees is to offer professional development and coaching. Along with expanding their knowledge, it also gives them opportunities to expand their skills into other areas they may be interested in.

According to Gallup, 87 percent of millennials say professional development is important for their job, and 69 percent of non-millennials agree, too. Recognizing their talents by sending them to a conference or seminar improves confidence and supplements their expertise.

After That, You’ll Retain Them

Showing recognition and rewarding employees for exemplary performances all helps retain them and keep them satisfied and engaged. If you value your employees, you’ll want them to stay, and if you show that you value them, they’ll want to stay, too.

Consider the following factors that help keep employees engaged:

  • A culture of respect.
  • Constructive feedback and mentoring.
  • Advancement and professional development.
  • Fair and appropriate rewards and recognition.
  • Availability of effective leadership.
  • Clear job expectations.
  • Adequate tools and resources to complete work.
  • High levels of motivation.

Your Employee ROI

The evidence is in, and it shows that investing in your employees is worthwhile, and can give you an exceptional ROI.

When you have engaged and invested employees, you experience the positive benefits of increased productivity, referrals, customer loyalty, and overall engagement. All of this results in an improved bottom line and additional revenue. When it comes to your organization’s strategic plan and investments, don’t forget about investing in your employees. They’re worth it.

What can you do to start investing in your employees?


Jason Kiesau

Jason Kiesau has been studying personal, professional and leadership development for most of his adult life. As the Leadership Developer for Oasis, a Paychex® Company, he travels the country working with leaders in the areas of self-management, relationship building, strategic thinking, and development of high performing teams. Jason's purpose is to inspire confidence in everyone he works with, and he is passionate about helping them pursue and achieve meaningful results.


August 23, 2017

Posted by

Jason Kiesau