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Strong Workplace Culture: It’s Good Business

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Image: DisobeyArt - Alamy Stock Photo
Time and time again, we’ve seen the strong correlation between prioritizing (and investing in) the employee experience and the host of related benefits — from employee wellbeing, improved productivity, and even increased profits. But while many workplaces know this to be true, others have struggled to prioritize employee experience and create a workplace culture around wellbeing, as they brace for the future of work.
Gallup recently released results from a workers’ survey and found that organizations that focused on culture and wellbeing saw higher levels of employee engagement than those without. By surveying over 14,700 full- and part-time employees in the U.S. on workplace issues like productivity, wellbeing, retention, and other factors, Gallup was able to determine that employee engagement in the U.S. has dropped by 4% points from a high of 36% in 2020 to 32% in 2022. Gallup reported “a sharp drop” in the percentage of employees that said that they agree their employer cares about their overall wellbeing, with only 24% of employees saying that their employer cared about their overall wellbeing in 2022 (down from 2020’s number of 49%) as it shared in a separate survey.
To explore ways to counter this downward trend, Gallup looked at workplaces that scored an average of 70% on employee engagement and highlighted what they did differently. The common factors among these workplaces include:
  1. Organizational culture and values factored into business decisions: One key attribute of workplaces with higher employee engagement was that they focused on their culture and values daily. These workplaces listened to employees and addressed their employees’ work-life needs, which might include creating flexible working arrangements, Gallup said.
  2. The organizations factored in wellbeing inside and outside of work: Workplaces considered the factors inside and outside the workplaces, including career, community wellbeing, financial, physical, and social factors, and how they impact an employee and provided resources to improve these wellbeing elements.
  3. Workplaces embraced flexibility: Workplace flexibility means different things for different employees, but it's clear that more people want it. Gallup recommends that workplaces factor flexibility into their future-of-work plans and that they quickly respond to changes as they occur.
Anyone who tracks the workplace trends and overall attitudes towards remote, hybrid, and in-person work can tell you that workplace flexibility has been one of the key workplace trends for a while now.
The conventional wisdom (i.e., the pre-pandemic way of thinking) has been that “real work” takes place in the office. Though some executives still cling to this notion, it runs counter to what many workers have learned first-hand since the start of the pandemic. The Gallup research also confirmed the employer’s primary benefit of flexibility: people who worked remotely or in hybrid work were generally more productive than their in-office counterparts.
Investing in the wellbeing of employees is a best practice that leads to increased productivity, and many workplaces see their bottom line improve when they do so, as Harvard Business Review (HBR) shared in recent research. In an analysis of three years’ worth of employee and financial data from over 1,000 brick-and-mortar locations, HBR found that workplaces that invested in their employees saw increases in revenue and profits.
To determine the relationship between employee experience and a company's bottom line, HBR standardized monthly revenue and profit statements by dividing the revenue and profit figures by the total employee-hours worked at each location for each month, thus giving them hourly revenue and profit rates. The researchers then looked at employee longevity, full- and part-time status, and skill levels for the employees at each location and also examined self-reported employee well-being information, formal training, communication and productivity tools, and other employee experience elements if the company reported using them.
HBR found that the top quartile of workplaces with a strong employee experience generated $87 of revenue and $59 of profit hourly on average, compared to $59 of revenue and $41 of profits for the bottom quartile. In other words, the workplaces with strong employee experiences clocked a 47% increase in revenue and a 43% increase in profits over the other workplaces.
The HBR research builds a case for investing in a strong employee experience — and thus a better workplace culture — even as the Gallup survey suggests, not all workplaces are addressing the issue with the same fervor.
So, the question now becomes: What can workplace leaders do to improve the employee experience and change the tide within their organization?
HBR offers up one solution in the research conclusion. The authors argued that HR leaders need to start building the case for improving the employee experience in a methodology similar to how marketing and sales teams share return-on-investment calculations. Though the study authors don’t go into the IT and facility side of things, workplace leaders in IT and facilities could also look at the cost-benefit analyses of improving employee experience — presenting executive leadership with how an investment in technology and flexible workspaces would boost productivity and profitability. By crunching the numbers, employee experience and workplace culture become less of an abstract concept and more of a tangible business outcome; one workplace leaders can analyze and address with measurable initiatives.
The question of employee experience and what workplace leaders can do for the great sense of workplace culture will become more of a business essential and not just a nice-to-have. And given the ongoing Great Resignation and possible economic uncertainty of the future, workplaces will do themselves a service by figuring this out now as a way of future-proofing, or recession-proofing, their talent pool and maintaining or increasing their employee retention rates.