What do workers want?

Photo: D. Hannte. Source: Morguefile

A recent study of over 19,000 employees and managers looked at what makes folks more productive at work. The answer was notable: people perform best when their physical, emotional, mental, and spiritual needs are met. When we feel energized, appreciated, focused, and purposeful, we’re happier and more effective in everything we do.

What’s surprising is how important these factors are to profitability. When all four areas are covered, employees feel over twice as engaged in their company’s business. And firms with the most engaged workers proved to be 22% more profitable than those with the least engaged workers, across all kinds of different industries.

The message? Employees don’t live by bread alone. We’re complex creatures, with a full spectrum of needs. How much we get paid is important, but it’s only part of an intricate web of benefits, responsibilities, and relationships we call “company culture.”

The takeaway for investors is to look beyond the bottom line. Read management’s discussion of its businesses. Listen to a conference call. Do they look out for their workers? Do they invest in their training and renewal? Is productivity—sales or cash-flow per employee—gradually improving, or does it just jump around? Every firm says that their people are their greatest resource, but you can really see if they believe that by looking closely at their financial statements.

Wal-Mart Sales per Employee. Source: Bloomberg

Respect is the secret sauce of business success. Everyone wants to be respected and to be respectable, to “wear a dignity that is deserved.” It’s one reason we like sports, where people rise or fall by their own merit. As Confucius once asked, without respect, what is there to separate us from the beasts?

Douglas R. Tengdin, CFA

Chief Investment Officer

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