Editor's note: This post was originally published in 2022 but has been updated to reflect the current state of workplace transformation.
With constant news about layoffs as well as record-low unemployment rates (these are confusing times)—the world of work is in a major state of flux. One thing is clear: Post-pandemic, employee expectations have changed and organizations need to decide how they're going to respond.
Our view? If you want to retain your best talent and attract candidates who will stick around for the long haul, you need to build a people-first workplace—one that listens to and values the needs of employees. That seeks to understand the profound shifts people are experiencing, and embrace these shifts as an opportunity.
For most organizations, building a people-first workplace will require new technologies, systems, processes, structures, and (often) a cultural transformation. It’s a time and resource-intensive undertaking. And if you want to do it right, you’ll need buy-in from key stakeholders to secure the tools and support to make the changes you know need to happen.
How do you get that buy-in? Often, by showing the potential business impact and ROI.
Inside this post, you’ll find 30+ statistics from comprehensive reports that illustrate the business impact of building a people-first culture. We’ve organized them around some of the pressing questions you’ll need to answer like:
- Why is building a people-first workplace critical to business success?
- What is the cost of not adopting a people-first approach?
- What currently stops organizations from prioritizing their people?
- What are the considerations and challenges you need to consider
This post is for anyone trying to shift internal culture. This armory of stats and evidence will help you make a solid business case to peers and executives that people-first is the future.
Why is building a people-first workplace critical to business success?
For one, it can help your company perform better…
1. In a recent study, Gallup found that organizations that scored in the top 25% in terms of employee engagement were 23% more profitable than those in the bottom quarter. Gallup measures employee engagement by asking random samples of the working population about specific conditions that relate to different aspects of engagement (e.g., satisfaction, loyalty, pride, role clarity, receiving feedback, etc.). (Source: Gallup)
2. The IBM Smarter Workforce Institute and the Workhuman Analytics & Research Institute created an Employee Experience Index (EXI) that measures employees’ personal experiences at work regarding belonging, purpose, achievement, happiness, and vigor. Their findings revealed that organizations that score in the top 25% on employee experience report nearly three times (3x) the return on assets and double (2x) the return on sales compared to organizations in the bottom quartile. (Source: IBM)
3. After analyzing more than 250 diverse organizations, drawing on the Fortune 100 and various “best workplaces” lists, researcher Jacob Morgan found that companies that invested heavily in their employees’ cultural, technological, physical environments were four times (4x) more profitable and generated two times (2x) more revenue than the average. (Source: Harvard Business Review)
4. According to the same Gallup report, top quarter companies experience 18-43% less turnover than the bottom quarter. (Source: Gallup)
5. The same IBM study found that employees with the highest experience index scores stayed longer than those on the lower end of the index. (Source: IBM)
And increase productivity.
6. According to the IBM report, “employees who experience a sense of belonging, purpose, achievement, happiness, and vigor are more likely to perform at higher levels [and] contribute ‘above and beyond’ expectations.” (Source: IBM)
7. The Gallup report found that companies with higher employee engagement experienced 14-18% greater productivity and 81% less absenteeism. (Source: Gallup)
8. Researchers from Bain & Company, along with the Economist Intelligence Unit, surveyed over 300 senior executives from companies all over the world. Based on their impressions of employee output, they asked them to assess the relative productivity of dissatisfied, satisfied, engaged, and inspired employees. Their findings found that inspired employees (i.e., workers that have reached the highest level of engagement) were 2.25 times more productive than satisfied employees (i.e., the lowest level of engagement). (Source: Bain & Company and EIU Research)
What is the cost of not adopting a people-first approach?
Companies that forgo a people-centric strategy risk employee disengagement, which can impact the bottom line…
9. The lost productivity of an actively disengaged employee is equal to 18% of their annual salary. This means a company of 10,000 employees with an average salary of $50,000 each will lose $60.3 million a year. (Source: Gallup)
10. Replacing workers requires one-half to two times the employee's annual salary. So, it costs $9,000 a year to keep each disengaged worker and between $25,000 and $100,000 to replace them. (Source: Gallup)
Talent attraction efforts…
11. When deciding whether to accept or reject a job, company values and culture are the third most important factors to U.S. job seekers (29%), after the company’s location and facilities, including accessibility and convenience (34%) and compensation (38%). (Source: Jobvite)
Download the free company values award planning guide. 12. 86% say company values and culture is a ‘somewhat or very important factor’ in the decision to apply for a job. (Source: Jobvite)
13. 35% of employees in the U.S. and 40% in Canada said they wouldn't accept a position if the corporate culture were a poor fit for them. (Source: Robert Half)
And lead to increased turnover.
14. Employees are 26% more likely to leave their jobs if they feel a lack of respect between colleagues and 24% more likely to quit if they don’t like their organization’s culture. (Source: TinyPulse)
15. People-centric organizations care deeply about their employees and prioritize their needs. This is why it’s not surprising that 82% of respondents to a recent Monster survey said they would consider changing jobs to find an employer with a return to work plan that fits their needs. (Source: Monster)
What currently stops organizations from prioritizing their people?
Well, it can be tough to please everyone…
16. Take return-to-work plans, for instance. According to the Monster survey, employees are split on their ideal work model. More than a third (34%) of respondents want to be in the office full-time, just under a third (29%) want to be fully remote, and 25% are interested in a hybrid approach with fewer days in-person. (Source: Monster)
And a lot of employees don’t use the programs created for them…
17. Gartner’s 2021 EVP Benchmarking Survey revealed that although 87% of employees have access to mental and emotional well-being offerings, less than a quarter (23%) actually use them. This pattern also applies to physical and financial well-being programs. (Source: Gartner)
And many organizations simply don’t know what to do or how to do it well.
18 - 21. According to a 2019 Deloitte survey:
- Only 53% of respondents felt their organizations were effective or very effective at creating meaningful work, an integral part of a people-centric culture.
- Only 45% thought that they were effective or very effective at delivering supportive management.
- While 59% thought their organizations were effective or very effective at creating a positive work environment, only 43% thought they were effective or very effective at providing the right growth opportunities.
- When asked about their workers’ trust in leadership, only 46% rated their organizations effective or very effective
What are key considerations and challenges you should keep in mind?
If you’re trying to lead a shift to a people-first culture, you’ll need to prioritize communication.
Listen to your employees and make sure they understand what you’re building, how they can access programs and tools, and how these actions benefit them.
22. Gartner research revealed that while nearly all organizations (92%) communicated with their employees about well-being more in 2020 than in 2019, many employees still don’t know about their organizations' programs. (Source: Gartner)
23. That survey also found that almost all organizations (96%) offered mental well-being programs, but less than half of employees (42%) knew about them. (Source: Gartner)
Culture change requires strong leadership advocacy.
Leaders and managers must embody the culture and actively care about their employees at every business level.
24. Unfortunately, the same Gartner survey found that only 49% of employees say their manager understands their problems and needs. (Source: Gartner)
Belonging is another critical component of building a people-first culture.
Employees need to feel that they belong to something and that they are part of a community.
25. A 2019 study from Globant found that two out of three employees (62%) wished they knew their coworkers better...
26. ... and four out of five (83%) believed that knowing their coworkers better would make them a more engaged team member. (Source: Globant)
Organizations will also need to proactively address the challenges preventing participation in cultural programs and benefits.
27. For example, the 2020 Gartner survey found that among all employees who indicated they could have participated in a physical well-being program in 2020 but didn’t, 38% said it was because they were too busy. (Source: Gartner)
Last, but certainly not least, there’s employee appreciation.
People-centric organizations care about their employees as people, not just as workers. Your people need to feel that they are respected and that the company believes in them.
28. A survey of over 1,000 U.S. employees found that a third of workers who feel unappreciated are looking for employment elsewhere, and 36% saw a decline in their mental health (Source: PromoLeaf)
29. For the 59% of survey respondents that said they felt unappreciated by their employer while working remotely, here were their top reasons why (Source: PromoLeaf):
- Lack of support (46%)
- Being overworked (45%)
- Lack of recognition (44%)
- Infrequent contact (31%)
- Being micromanaged (30%)
30. 63% of employees who are recognized are very unlikely to look for a new job. (Source: SurveyMonkey)
31. 82% of employed Americans don’t feel that their supervisors recognize them enough for their contributions, and 40% say they’d put energy into their work if their employers recognized them more often. (Source: OGO)
Turning data points into action: Next steps to build a people-first culture
While you can’t shift culture overnight, we’ve identified four key focus areas that can help your organization move in a people-first direction based on the data above.
1. Manager training and support. Creating a people-first culture starts from the top. It’s up to your leaders and managers to act as positive role models. They need to lead by example by communicating the company’s mission, vision, and purpose, and living the company values every day. They also need to recognize and reward their teammates who positively contribute to the company culture.
2. Psychological safety and belonging. Your people need to feel comfortable speaking up, asking questions, and challenging the status quo; this safety leads to more innovation, collaboration, and better overall performance. To nurture and promote psychological safety and belonging, you need to create space for new ideas (even out-of-the-box ones). You can even incentivize innovation by rewarding your employees’ creative contributions so they know their efforts are appreciated.
3. Career development and growth. Think about your entire employee lifecycle, from recruitment to exit. How are you prioritizing an employee's development and growth from day one? Is every employee getting the training they need to be successful? Are you rewarding and recognizing the right behaviors so your employees know what success looks like? Work through each stage of your employee experience and look for gaps between your current experience and one that would better meet your employees’ needs.
4. Mental health and employee well-being. Burnout is real. After almost two years of remote work during a pandemic, your employees may be coping with a whole host of mental health issues: stress, loneliness, anxiety, even grief. To address these issues, develop holistic well-being programs and address the barriers that could be keeping your team from accessing them (e.g., lack of knowledge, fear of stigma, time or energy constraints, etc.).
For example, rather than giving your employees a gift card or more company swag, why not reward their hard work with an experience that will help them to relax and unwind, reconnect with family, or indulge in a passion or hobby?
The evidence is there: your people are your most important asset. Place them at the center of everything you do, and you’ll see the benefits in the form of a happier, healthier, and more productive workplace.
