Fortune’s most popular issue every year is the “The Best 100 Companies to Work For.” It’s no surprise, as Fortune’s Editor Alan Murray says, “Companies fight to get on this list each year because they know it will help them attract the very best talent.” However, Fortune provided some additional insight that makes this list intriguing especially when it comes to firms that have repeatedly made the list. This year, in conjunction with release of the 2016 list, Fortune held an event in New York that featured the CEOs of three of the top ten companies:
- Danny Wegman, CEO, Wegmans
- James Goodnight, Co-founder and CEO, SAS
- James Weddell, Managing Partner, Edward Jones
There were some compelling common threads to the companies featured at the event despite their obvious differences in industry focus, business mix and geography.
Private Companies Dominate The Top 10
Eight of the top ten firms are privately held including all three featured in the panel. They all cited the ability to stay focused on the long-term as a key differentiator in how they manage their strategies and operations. There is no overreaction to the short-term earnings pressure from shareholders or analysts that public companies often experience. During the financial crisis, SAS avoided lay-offs by engaging their employees in managing costs. As a result, their confidence in their strategy and talent first mindset provided the foundation to continue to manage for long-term success. The leadership of these organizations recognize that talent is their only sustainable differentiator and competitive advantage—one worth investing in.
Focused and Continual Investment in Training and Development
Each of the three companies have made significant investments in training and development. They created specific training programs to enhance their employees’ skills. One example is Edward Jones’ Financial Advisor Career Development Program which is viewed as a cornerstone of their successful organic growth strategy and lasts seven to nine months. All three organizations feel strongly that their learning culture significantly improves job satisfaction and the customer experience. They recognize that learning in the construct of peer networks is critical to sustaining their culture and building the relationships that translate organizational boundaries.
Employee Benefits Tailored to Their Needs
The three panelists highlighted the diverse and unique nature of their employee benefits. Wegmans workforce is 60% part-time including many high school students. Over the past 30 years, Wegmans has awarded $100 million in scholarship funds to more than 32,000 employees. Currently, over 5,500 employees receive scholarship funds from Wegmans.
SAS was one of the innovators of the campus environment which includes free access to a health clinic and schools. SAS estimates that the annual benefit of ensuring that many of the needs are met on campus is worth $20 million in incremental productivity.
The conclusion was that these firms really understood their employees’ needs beyond compensation and constructed employee benefits and a working environment designed to help them succeed. One telling statistic is the superior level of voluntary employee turnover which in all three instances were far better than industry norms. They understood the value of continuity that comes from engaged employees who provide outstanding service to customers. Conversely, they also recognize the large savings that come from avoiding recruiting costs and the costs associated with lost productivity resulting from high turnover.
Our Perspective: Create a Virtuous Cycle
The companies featured both in the panel and the latest Fortune list evolved their approaches and practices over time but have reached a stage where they have created a virtuous cycle that is self reinforcing. Key elements of creating and maintaining this cycle include:
Focus on the Motivation
Understand what connects your employees to your mission and what resonates with them. Engagement survey insights may provide a perspective but it requires leadership engaging employees in the design of the talent ecosystem to make the effort relevant and sustainable.
Develop your Game Plan
Our perspective of the most critical elements that firms should include in their game plan:
- Develop a clear Employer Value Proposition
- Recruit and assess for skill, fit and learning agility
- Develop your leaders at all levels
- Invest in continual learning at all stages of the career development cycle
- Tailor your benefits to the needs of your employees
Keep it Simple
Start somewhere and do something. Companies are often too wed to what they have for a variety of reasons but mostly because they fear what changes may cost and the uncertainty or lack of confidence around the benefits. For example, one element that successful organizations are investing in is the creation of peer networks and encouraging peer learning. The programs are typically inexpensive, create immediate knowledge share opportunities, and have strong positive cultural benefits.
While the companies featured are not immune to the challenges of the labor market including diversity and the rise of millennials in the workforce, they understand the broader context around employee engagement. They connect their employees with their mission, help them understand their role in a larger context, make investments in their development and create an environment that meets their needs.
In the words of Dr. Goodnight, “If you treat people like they can make a difference, they will.”