In 1993, Fred Reichheld described the value of customer loyalty in a groundbreaking article titled “Loyalty Based Management.” Later in his 1994 book, The Loyalty Effect, he described the direct relationship between customer loyalty and employee loyalty and the correlation between customer loyalty and profitability. Since then, many studies have corroborated these findings.
For a CMO or CEO who sincerely wants to improve company performance, improvement in employee loyalty alone is a guaranteed profit and growth builder. Of course, there are other benefits such as more experienced employees, more efficient processes, superior employee teamwork, and retention. The evidence confirms that getting on a “Best Places to Work” list is as important to Marketing as it is to Human Resources.
Since we know that employee loyalty is directly correlated to customer loyalty, it is important to recognize that “Best Place to Work” companies have substantially greater employee loyalty. This chart, organized by industry, shows that employee turnover is lower in each “Best Place to Work” company.
Actually, there are many “Best Places to Work” lists. While the Fortune list is the most well-known for mega companies, there are lists by region, size, industry, and even an AARP list for companies that want to attract seniors as employees or customers. Selecting a list is an early step in the process as it drives some necessary changes. So here again is a Marketing challenge.
While for very few companies getting on a “Best Places to Work” list comes naturally, some training and changes are required for most. There is a process that smart companies follow, just as they follow a process for ISO 9002 certification or Malcolm Baldridge Awards. A useful guide to achieving these results can be found be following this Optimal Thinking “What Is a Best Place to Work” post.
Timing is important in this. These are annual awards that companies need to start preparing for now in order to make it onto the list for this year. Typically, depending on the changes that have to be made, a lead time of six to nine months is reasonable.