Work is an integral part of each of our lives and it can be as rewarding as it is challenging. As a business owner, it’s easy to get wrapped up in the day-to-day of running your company, but the best organizations understand that the benefits of happy employees don’t stop with your staff, but can impact your business, too.

Why does it matter?

Last year, around 38 million people quit their jobs in what is being referred to as “The Great Resignation”, “The Big Quit”, or “The Great Reshuffle”. Although “resignation” and “quit” imply that these individuals are leaving the workforce completely, this is not the case. This mass turnover was largely due to feelings of being unappreciated and unsupported in their roles, and people no longer feel bound to jobs that don’t value them.

And the truth is, the real cost of staff turnover is much higher than you might think. All business owners should consider how the following factors would affect their company:

Financial cost

When you need to fill a position after an employee leaves, it’s not just their salary you need to consider. New hires can cost companies over $4,000 each through recruitment costs, training, and management time during the onboarding process.

Reduced productivity

At its most basic level, while you are looking to fill the role of an employee who has quit, you have a smaller team and fewer people to get everything done.

And once you fill the vacancy, it may take a new employee a considerable amount of time to reach the same productivity levels as their predecessor. Management experts Gallup find that it takes around 12 months for a new employee to reach peak performance potential. Industry analyst Josh Bersin agrees, stating that “people are what we call an ‘appreciating asset.’ The longer we stay with an organization the more productive we get - we learn the systems, we learn the products, and we learn how to work together.”

Lower staff morale

When an employee leaves, you may not have just lost a productive member of your team, but your remaining employees may have lost a work friend. According to Gallup’s "State of the Global Workplace" 2021 report, one of the main ways employers can be competitive and maximize business performance is to “foster employee wellbeing by encouraging friendships at work”.

Whether you’re a small business owner or a manager of a big team, here are five easy ways you can get started on letting your employees know how much you appreciate their hard work.

Develop and maintain a culture of gratitude

To say that most bosses do not appreciate the efforts of their employees would not be accurate, but perhaps this isn’t always communicated effectively. World-leading gratitude researcher Dr. Robert Emmons suggests “There’s a gap between what a company thinks it’s doing to appreciate great work, and what its employees see happening on a day-to-day basis: Only 7% of employees say their company is excellent at appreciating great work, while 56% of management say their company is above average at appreciation.”

From both a business and a personal perspective, acknowledging and thanking employees for a job well-done is more than just a “nice” thing to do. According to a survey by the American Psychological Association (APA), employees who felt valued by their employers were considerably more likely to report better physical and mental health, as well as higher levels of engagement, satisfaction, and motivation, compared to those who did not feel valued.

The best way to start and foster a culture of gratitude is from the top-down. Where you lead, others will follow. When it comes to receiving gratitude at work, experts have found there is a "spillover” effect, where employees become more likely to trust each other and help each other out.

Gratitude culture can also be promoted by allowing employees to recommend one another for small awards or internal recognition. Who has gone the extra mile recently? Who received glowing feedback from a client or customer? Who has exceeded their goals? Who came up with a solution to a problem? Who completed a project before the deadline? When you allow employees to be happy and share that happiness with one another, you can greatly improve the morale inside your entire organization. When employees feel happier at work, 85% say they take more initiative, 73% say they are better collaborators, and 48% care more about their work.

However, your culture should also look to thank those who do not promote themselves to be noticed, as well. It’s important to be sure that there is attention paid to everyone who is contributing in a significant way on a regular basis.

Regular feedback

Regardless of profession or position, everyone likes to know where they stand. Performance reviews are often a dreaded aspect of any role, but regular development meetings with your employees allow them to share their achievements and challenges, discuss the direction their career is heading, and strategize ways to reach their goals. Regular one-to-one meetings can often help prevent issues before they arise, as they provide valuable opportunities to ensure that everyone is on the same page, offer advice and support if needed, or just give a quick pep talk.

Knowing that you care about their success and are eager for them to progress is vital for employee motivation, engagement, and retention. A lack of opportunity or feeling “stuck in a rut” often goes hand-in-hand with job dissatisfaction.

Salary reviews

It’s no secret that an employee negotiating their salary with their employer can be a nerve-wracking experience. Similar to receiving feedback through frequent development meetings, providing your team with regular opportunities to review their salary is a great way for them to feel recognized and rewarded for their efforts.

While development meetings should focus on the employee’s goals, performance, and progression, the purpose of a salary review is to determine whether their earnings accurately reflect the responsibilities of their role and how well they perform them. Development meetings should be held every month or so, while salary reviews should be held at least once a year. This way, you can regularly check if what you are offering is in line with the current job market (i.e. the average salary for the industry, location, and experience) to ensure you stay competitive and fair.

Extra vacation time

Even if your employees are completely in love with their jobs, striking the right balance between personal and professional life is crucial. A poor work-life balance is one of the biggest contributing factors to stress and burnout and has even been linked to poor health.

• Gallup’s "Global Emotions" report found that 40% of adults were both stressed and worried in 2020
• In the UK alone, work-related stress, depression, or anxiety resulted in 12.8 million working days lost in 2019 and accounted for 50% of all work-related ill health cases in 2020/21
• A recent study by the Behavioral Science & Policy Association found that workplace stress can have as much of a negative impact on health as secondhand smoke. In particular, poor work-life balance increased the odds of self-reported poor physical health by around 90%
• It is estimated that the effects of stress on mental and physical health, from depression to heart disease, cost businesses between $200-$300 billion a year in lost productivity

Offering extra vacation days as a reward, or increasing vacation days for each year of service, gives your employees a very valuable gift - more time to relax, unwind, pursue their hobbies, or spend with their loved ones. You help nurture a healthier and more supportive work environment, showing your staff that you care about their well-being, and not just while they’re on the clock.

Handwritten notes

Don’t underestimate the power of small gestures! Taking the time to write a personalized note to thank someone for their efforts or achievements will not be soon forgotten.

Physical tokens of appreciation, such as handwritten notes, thank-you cards, or small gifts, that your employees can take home or keep on their desks will serve as a long-standing reminder of your appreciation for their work on a task, achieving a goal, or solving a problem, as well as boost their motivation and job satisfaction.

What's the bottom line?

When you have a dedicated team behind you, it shows. You can’t be successful without the help and support of the people around you, they are the ones who play a big part in helping your business to thrive.

Recognizing and appreciating your employees should not be a once-in-a-while thing. It should be consistent, thoughtful, and sincere. When employees feel valued and know that their contributions matter, they are more engaged, satisfied, and productive.

“If 80% of an organization’s employees are not engaged at work, the organization’s resilience during a crisis will be at high risk, and leaders won’t be able to consistently reach their goals” - Gallup "State of the Global Workplace" 2021 report

As gratitude expert Dr. Robert Emmons says, gratitude is “the ultimate performance-enhancing substance”, so if you do nothing else today, start building appreciation into your regular routine. With numerous benefits not just for your staff but for your business too, you’ll wonder why you didn’t start sooner!