If you’ve ever watched the tv show Shark Tank, you’ll know that the single most important issue for the investors is money. If Feedwork had a seat in the tv studio, we’d be asking the same questions. Sure, we need to get along and the well-being and motivation of our employees is important. But what about the money? Is it profitable to invest in feedback? Will it show up on the bottom line of your company?
There’s no doubt feedback creates profit in very different ways than budget cuts and increased efficiency. Instead of cutting the number of employees, educating them in feedback is about investing in our employees. The profits to be gained from a healthy feedback culture is related to the effects it has on our employees.
Unmotivated employees are expensive
As you can read in this blog post about motivation, feedback is essential for the development of motivation among employees. In fact, Hackman & Oldham say that without feedback, motivation cannot exist. But is it really that bad if our employees aren’t motivated 24/7? They still show up and work 9-5 every day, so what’s the big deal? According to Gallup, lack of motivation and wellbeing costs the USA around 450-550 billion dollars. 450-550 billion dollars! Money lost due to lack of productivity because the employees aren’t motivated. This is an unfathomably large number, but I think most of us can relate to how a lack of motivation affects our effort in the workplace. We spend a little longer having lunch, check our social media a little too much and have a little too many watercooler conversations with our equally non-motivated colleagues.
No feedback? See ya later!
Unmotivated employees aren’t just inefficient, but the lack of feedback also may make them more likely to look for another job, which is also reflected in the financial results. In fact, the proportion of employees who change jobs quickly is 14,9% lower in organizations that often give feedback.
There are great costs associated with a large employee turnover. There are job postings to be written, interviews to be held, other employees may have to work overtime until someone else has been recruited, and then there’s the whole onboarding process. Josh Bersin from Deloitte estimates that the cost of losing an employee is approximately 1.5-2 times the yearly salary of that employee. All in all, it’s serious business to lose an employee, and feedback increases your chances of them staying – so why not invest in feedback?
Let’s look at the bright side
As detailed above, a lack of feedback can have significant consequences for the wellbeing, productivity and motivation of an employee. But let’s look at the bright side, because the implementation of a healthy feedback culture has several positive impacts for all businesses.
Innovative employees? Yes please!
Today most companies survive by being innovative. They have to be innovative, flexible and agile to compete with other companies. But how can a company be flexible and agile, if its employees are not? If an employee never receives feedback, there’s a pretty good chance they’ll just keep doing what they’ve always done. Because apparently that’s what works. Or maybe it doesn’t?
If you want innovative and creative employees, feedback is a must. A study by Officevibe shows that 92% think that constructive feedback is an effective tool to increase performance. By being acknowledged for what’s working well, and being shown what can be improved, employees can develop themselves and their skills which fosters productivity, innovation and creativity. And as mentioned above, feedback leads to increased well-being and higher motivation. Studies show that employees with a high well-being score are three times more creative than employees with a low well-being score.
Conclusion: Feedback affects your bottom line positively
If your company wants motivated employees who aren’t going to leave you, but also contribute with innovative and creative solutions, feedback is the way to go. All of this will show up on the financial statements, because the efficiency of your employees is higher, the costs of attracting new employees is lower and your revenues increase thanks to more innovative solutions. All in all, we conclude that feedback is not only good for the individual well-being of employees but is just as important for the business’ goals for growth and profit.
Another way to make employees perform better is to increase their belief in themselves. Read more here: