Keeping Employees Happy? Google Knows

by Jody Ordioni

As the number of companies in the world increases, employers find it harder to retain employees. One of the ways, in which employees are being engaged in the company is by offering them perks and recreations. The tech industry is the forerunner in providing its employees with various perks so that it can maintain their interest for a longer span of time. Google is, perhaps, the best example when it comes to supplying recreational activities or free meals (literally!). From free classes to free gymnasiums to lectures with global thought leaders- Google does it all.

Those who view the world with their cynic glasses on will argue that this is a trade-off. Critics might say that these systems are in place to keep the employees tethered to their desks. They enforce the employee to work longer hours. Well, this might raise the question whether these perks do pay off? Do the companies truly profit when they promise bonus activities to their employees?

Many have tried to research whether the bottom line of a company increases if they actively seek to keep employees happy. Warwick University conducted one such research. They found that in the case of Google, keeping employees happy paid off as the bottom line increased as much as 37%. Overall, productivity increased by 12%, simply by ensuring that the employees were satisfied and happy. However, these tests were conducted in laboratory conditions. The University of Tennessee aims to extrapolate this data into real-life conditions and find out the results.

The Search for Happiness

The research conducted analyzed data from Thomson Reuters ASSET? on the relation of employees and the overall performance of the company in financial terms. The research spanned across 3500 companies, in 43 countries over a span of 12 years, ending in 2014. There are primarily five criteria that measure how workplace culture treat their employees, namely- employment quality, health and safety, training and development, diversity and human rights, and labor laws.

Here are some of the conclusions that could be drawn from the study:

It was found that companies that concentrated on Employee Friendliness (EF) achieved more amount of return on their assets and equity. They also scored better in terms of sales-to-assets ratio. The equation at play seems clear. The better the employees are treated, the more they feel responsible for the company. They work harder, are more efficient, and strive to do more for their company.

What Comes First- the Chicken or the Egg?

One may argue that the correlation does not give rise to the causation. The argument we have established might be totally reversed for all we know. It can be argued that the companies who are already financially mega-giants are providing these recreations to their employees and the cycle continues further.

However, this claim has been actively disputed by researchers. The primary reason being the timeframe spans a long period which helps them to observe changes in patterns as a result of new regulations being enacted. For example, in many European companies, there were introductions of lenient parental leave rules, which can be related to an attempt to increase EF in the workplace. The implementation of these laws did have a positive impact on the financial standings of the firms, especially if the prior rules were poor in structure.

The long timeframe also allowed the researchers to study the cultural and financial patterns of the companies in the time periods before, during, and after the Great Recession. As before, it could be seen that companies with higher EF ratings outperformed during a tumultuous financial period. This reasserts the theory that a happier workplace can foil even the harshest conditions and profit the company in the long run.

These arguments now equip you to dispel any discrimination regarding the correlation between employee satisfaction profiting the company financially. It seems, with enough concrete evidence, that keeping employees satisfied does pay off.


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