Invest in Employees… It Pays

Employee Return on Investment

“We are a people company” – is a commonly made corporate philosophy statement. Most people would assume that the company is drawing its strength from a large base of satisfied clientele. While this is partially true, a real people company is one that holds on to its “empowered, learned and innovative employees” as its pillars of success.

Indeed in today’s competitive world, people or the workforce make all the difference. Very often the thin line distinguishing companies that are struggling to stay in business and those who are striving is made by a team of efficient and engaged employees. It makes a lot of business sense for a management to invest on its workforce because it will pay rich dividends later.

In the Middle East where private companies depend on a largely mobile and floating expatriate population to drive their profits, managements tend to regard their employees as highly dispensable and are reluctant to invest in their training and development. In most cases this has proved to be counter-productive and the last decade has seen a renewed thrust on employee enrichment and empowerment.

There is a growing understanding and consensus that people are a critical asset that needs to be cultivated and properly managed. Without the right employees, businesses will not grow, become profitable, or generate new ideas. A company’s workforce is not merely a necessary expense, but also an investment in future competitiveness and earnings.

A lot of research studies support the idea that keeping employees engaged and motivated, as well as retaining the best performing employees over the long term, have positive effects on corporate financial results.

Investing in employees affects the bottom line in two ways. First, it reduces employee turnover, sick leave and healthcare costs. Second, investments in employee engagement programs, training, talent management, information and decision support, communication, wellness programs and technology all have a positive effect on workforce performance and productivity.

Empowering employees also augurs well for a company. Involvement and recognition generate positive energy and increase ownership of individual contributions. The freedom to act and take initiative within agreed frameworks motivates employees to reach their full potential and do a better job.

Mr. Sathya Menon is Director –Academics, Blue Ocean Academy, Dubai.