Published on Forbes: Making Your Business A Great Place To Work Requires More Investment Than You Think

February 28, 2017by Gregg ApirianLeadership and StrategyEmployee Engagement

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The customer comes first. It’s an age-old maxim not without wisdom. Companies run on revenue, and revenue comes from customers. Therefore, customers are king. Could it really be that simple?

Of course not, and especially not in the present business climate. Customer expectations are high, rising and evolving. Sure, it makes sense to extend investment to keep customers happy and outsmart the competition. Every dollar that’s spent on attracting customers drives them to one of three places: your store, your retail partner’s store or one of your sales or service representatives.

But who is behind every single one of those destinations? Your employees. They are on the front lines with your customer every day representing your brand, taking care of customer needs, and creating the very products you spend millions of dollars marketing. They make or break revenue, they make or break profitability, and they make or break your MROI (marketing return on investment). And while millions continue to be spent on customer marketing, HR and communications budgets for ensuring employee engagement are paltry by comparison. In our unscientific estimation, HR and communications budgets are about 1% of the average company’s marketing budget.

Budgets provided to HR and communications teams have failed to keep pace with executive and employee expectations

Yes, wages and benefits are the single largest line item expense of most companies. And yes, more and more companies have increased their focus on improving the employee experience, but budgets across the industry provided to HR and communications teams have failed to keep pace with executive expectations, employee expectations and the competitive talent war our strong economy has put us all in.

Companies that get it are now investing a healthy number of resources to support the employee experience — i.e., the sum of all of the experiences that an employee has with the company — because being viewed as a great place to work could be the difference between success and failure, where success means attracting and keeping top talent. While such experiences come in many forms, when delivered right, they come in the form of a unified brand story that connects employees and employers to purpose and shared beliefs, and defines the culture across channels and touchpoints. It also extends to the recruiting process, making it easier to attract new hires.

There is a huge imbalance between the way companies prioritize customers versus employees

Richard Branson built Virgin into a dominant global force by, ostensibly, creating a superior customer experience. And yet he has stated that customers come second at his company, followed by investors. Employees actually come first. “It’s our people who drive our success,” Branson said in an interview on the Virgin website, “so we strive to maintain a healthy and happy culture, and create environments in which everyone can flourish.”

Sadly, the approach Branson champions as a major key to his company’s success is a rare one. In a recent report created by Newsweaver, out of 700 human resources and communications professionals surveyed, more than a third estimated their employee experience budget at $10,000 or less per year, and the average internal communications budget of an organization with more than 500 employees was reported at $185,000 per year. 

Compare that to the multimillion-dollar budgets most organizations set aside for marketing and customer experience and you’ll see that there is a huge imbalance between the way companies prioritize customers versus employees – a disparity that sets employee experience budgets at 1% or less of marketing budgets. An early 2016 Gallup poll showed that only 32% of employees in the U.S. could be considered “engaged” in their jobs, a direct reflection of the low number of dollars being spent on measuring and motivating employee satisfaction.

The good news is, employee engagement has a measurable effect on business performance. Dale Carnegie reports that companies with engaged employees outperform those that don’t by 202%. And Gallup’s 2016 Q12 Meta-Analysis Report says, “Employee engagement consistently affects key performance outcomes, regardless of the organization’s industry or company — and regardless of changes in the economy or massive changes in technology.”

Companies have to take a multichannel approach or watch revenue plummet. Marketers use powerful tools and techniques to measure customer behavior and satisfaction across channels like television, print, digital, social, mobile, in-store and customer service. They use that data and insights to form strategies for improvement at every customer touchpoint. Success is measured by ROI and fueled by behavioral science that helps the company better understand and predict what the customer wants or needs. In essence, they are measuring human motivation, behavior and response.

Why then are we as an industry – and this means you too – not funding and applying these same powerful tools and techniques to measure and influence current and potential employees? Employees are people too, and their relationships with their workplaces can be improved dramatically by efforts to influence and engage them, to provide the conditions that deliver satisfaction, not frustration, just like we do for customers.

As the war for top talent continues to escalate, company leaders need to increase their budgets for employee experience

If you use email to engage customers and measure open rates, why not use it to communicate with your employees and evaluate their open rates, too? If you give your customers best-in-class e-commerce sites and mobile apps, then your employees should have the very best intranet or digital tools available. If the purpose of a brand is to build an enduring relationship with customers, then you need an employer brand to build an enduring relationship with employees, so they can support the customer brand. It’s a symbiotic relationship.

Now more than ever, customers are aware of what’s going on inside your company, if not consciously, then via clues about the attitudes and effort levels surrounding your business, given off by your employees. Increasing budgets allocated toward employee happiness produces direct and indirect positive impact on your company’s success. We don’t advocate for an equal budget for both employee and customer engagement – that’s not necessary. But as an industry, we need to sensitize company leadership to the ROI an increased spend on enhanced employee experiences will generate. As the war for top talent continues to escalate, 1% of the marketing budget no longer cuts it.

This article “Making Your Business A Great Place To Work Requires More Investment Than You Think”  was originally published on Forbes.com.

Gregg Apirian

As the Managing Director of Vignette, Gregg is responsible for agency-wide vision and strategy, operations and finance, business development and engagement management. With nearly 20 years in entrepreneurial and executive-level roles, Gregg has been an instrumental leader at many distinguished agencies. Prior to Vignette Gregg was EVP, Digital Marketing at Trailer Park, EVP at Schematic (now POSSIBLE), and began his agency career as co-founder and CEO of BLITZ. Over the years Gregg’s leadership and combined experience drove growth, profitability and delivery of innovative and effective solutions for brands like GE, Microsoft, Coca-Cola, Target, Verizon, OWN, Sony Pictures, NBCUniversal, Johnson & Johnson, HSN, Ann Taylor & LOFT, Nike, and Reebok.