Employees: The Competitive Advantage

I was recently having a discussion with a friend of mine, where he mentioned that he would love to work for Google. Upon asking why, I was simply pointed to an online article published by CNNMoney, “100 Best Companies to Work For.” Of course, this piqued my interest and I began wondering what made these companies so special. I started browsing the list, randomly clicking on companies to see what they offered. By the time I got to Google (which was number four on the list), I understood why my friend was interested. They offered everything from climbing walls, to free laundry, and even free food for their employees. I also noticed that their profits were up quite a bit. I closed that screen and clicked on another company also reporting profits. Then I clicked on another company and another. Each company was like the last-they were reporting profits. I began to wonder if there was a correlation and started to research the subject.

From 1938-1960 Sears, Roebuck and Company conducted a study on employee attitudes. Over the 22 year span, Sears surveyed thousands of their employees to determine their feelings towards the company. The findings were significant. During the studies, researchers were able to track how an improvement in employee attitudes led to an increase in customer satisfaction, which ultimately led to an increase in revenue.

These findings and more were laid out in an article written by Caterina Bulgarella and published by GuideStar Research in 2005. GuideStar is a research and consulting firm that helps businesses build better relationships with their customers. In the article, which details other studies that were conducted on the same subject matter, Bulgarella also goes on to offer strategic steps and advice that companies can utilize. “Satisfied employees have high energy and willingness to give good service; at a very minimum, they can deliver a more positive perception of the service/product provided,” states Bulgarella. “Satisfied employees are empowered employees; in other words, they have the resources, training, and responsibilities to understand and serve customer needs and demands.”

If you cross-reference the “top 100 places to work” with another list, “the most profitable companies” (CNN Money), you can actually see some company names repeated in each list (Microsoft, Google, American Express). Does this mean that happy employees are the direct cause of a profitable business? No. But as I mentioned earlier, there is enough evidence for a significant correlation.

In Bulgarella’s conclusion, she lists several strategic steps to guarantee employee satisfaction, but one more than any other really stood out to me: “View employees as the primary source of competitive advantage.” The employee is a company’s main point of contact when dealing with customers. They create experiences and relationships that leave lasting impressions. Having quality products and fair pricing is key to any businesses success, but I feel like there is enough evidence to show that a satisfied employee can be another important factor in order to achieve a competitive advantage.

What do you think? Do you feel that happy employees can lead to a better bottom line?

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