5 ways Workplace Culture Drives Business Profitability

TED KITTERMAN

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DAPHNE LEE

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DAPHNE LEE & TED KITTERMAN

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The employee experience is one of the strongest predictors of long-term business results. Here’s why.

When you invest in workplace culture, your business is more profitable.

Employees with consistently positive experiences in the workplace are more likely to stay with the organization. They experience less burnout, give higher levels of effort, and drive faster rates of innovation.

The cumulative result: Companies with high-trust cultures are more profitable and have higher stock market returns.

According to research from FTSE Russell, companies that make the Fortune 100 Best Companies to Work For® list outperform the market by a factor of 3.36. Over time, that is a staggering difference.

In 2023, recession fears have more companies looking to cut costs. With increasing pressure on business leaders to innovate and grow the bottom line, HR leaders must make their case: Workplace culture is a key predictor of financial success, in recessions and for years afterwards.

Here are five ways the data proves workplace culture drives profit:

1. Great workplaces have higher retention rates.

Companies that make the Fortune 100 Best Companies to Work For list — the flagship recognition list produced by Great Place To Work® each year — experience half the turnover of their peers. High-trust culture also helps companies recruit top talent. For the 100 Best Companies, employees are six times more likely to recommend their employer to others.

In the inaugural Singapore Best WorkplacesTM in Healthcare & Biopharma 2023, 90% of employees in Best Workplaces feel they work in a great workplace as compared to just 75% for the rest in the industry. 88% of employees at Best Workplaces say they take pride in their work and the organization as compared to 74% for the rest.

2. Great workplaces have lower levels of burnout.

Worried about productivity? Workers who are burned out might be “quiet quitting” rather than helping you reach crucial business goals. Or they might be actively seeking their next job.

Employees from the Singapore Healthcare & Biopharma Best Workplaces List share the top 3 things they value in their workplace culture.
– Can I count on my colleagues? 86% of staff ranked on the Best Workplaces List experience a sense of community, knowing they can count on their colleagues to cooperate (compared with 71% in other companies).

-Can I count on my leaders? 85% of staff say management deliver on their promises, compared with 67% at others.

– Are my leaders competent? 86% of employees say their managers hire the right people for the job (18% more than in other companies).

For the organizations on the 2023 Fortune 100 Best Companies to Work For® List, produced in partnership with Great Place To Work®, employees gave more in record fashion. Revenue per employee — a key productivity measure that every leader fixates on — increased an incredible 7% year-over-year for these companies. That’s almost double the 4% year-over-year revenue per employee increase among last year’s winners.

Profits don’t create great workplaces. It’s the other way around.

3. Great workplaces innovate faster.

When employees trust their employer, they work harder, contribute more, and drive higher levels of innovation and productivity.

In Great Place To Work research, the highest levels of innovation occur when every employee is empowered to participate — “Innovation By All.” For companies where higher numbers of employees report innovation and inclusion, median year-over-year revenue growth is more than five times higher than companies in the bottom quartile for connecting employees to innovation.

When workers agree that their colleagues adapt to change, that they look forward to coming to work, and that management seeks out new ideas, business results follow.

But it matters who is being left out.

Every survey will have a percentage of employees who are not having a positive experience. What should alarm business leaders is when certain categories of workers report having disproportionately worse experiences.

  • Are your front-line employees being excluded from the broader mission of the organization?
  • Do women managers feel as supported and celebrated as their male colleagues?
  • Do all races, ethnicities, gender identities, and LGBTQ+ folks feel like they can bring their full selves to work?

If the answer is no — or even “I don’t know” — you don’t have an “Innovation by All” culture. With the best organizations seeing their revenue grow 550% faster than less inclusive organizations, it’s expensive to leave workers behind.

4. Great workplaces rebound faster from a recession.

The answer is in your company culture.

In the ASEAN region, in 2022, we surveyed close to 146,000 individuals representing 260,000 employees across seven countries in ASEAN, across a wide range of industries and company sizes, including both local enterprises and multinational companies. Many of these organizations are Great Pace to Work Certified™ companies and Best Workplaces list winners.

What do employees value at their workplaces? Among our Certified community, these are consistent traits within the workplace: a positive, high-trust experience around inclusivity, innovation, fairness and integrity.

We also found that particular aspects of the work experience were vital for employees. They are: feeling treated as a full member of the organization, management following through on promises, and fair promotions and feeling welcome when joining new teams. Another critical experience is “Innovation By All” – a sense that everyone in the organization is invited to generate new and better ways of doing things.

5. Great workplaces have higher stock returns.

It’s not just short-term cost savings that make a great workplace culture so valuable to businesses. Research from Alex Edmans of the London School of Economics shows investing in workers leads to long-term business success.

Edmans analyzed the history of the 100 Best Companies lists from 1984 to 2009. Controlling for firm size, industry, past returns, and many other variables, Edmans demonstrated that companies on the list outperformed the stock market by 2% to 3% per year.

With the best organizations seeing their revenue grow 550% faster than less inclusive organizations, it’s expensive to leave workers behind.

But isn’t employee well-being just an indicator of running a profitable business? The more money you make, the more perks and benefits you can offer alongside inflated salaries, right?

Not quite.

Treating employees well doesn’t just correlate with higher stock returns, it predicts future performance. It takes four to five years before the market catches up to the value of employees’ job satisfaction.

Do you have a culture that you’re proud of?

Compare the experiences of your employees with the most credible benchmark data available. Learn more about our data in the upcoming How to get Great Place to Work CertifiedTM Webinar on 10 May, 2023, and how to earn Great Place To Work Certification.

 

DAPHNE LEE

Daphne believes in building community-relatable content, telling stories through narratives that add value in today’s workplace and in culture-building. Her idea of a great workplace is one that thrives on openness, support and inclusivity while building trust and working towards a common business growth and purpose. A journalist, she spent 15 years writing for trade publications, lifestyle magazines and broadsheet supplements.

TED KITTERMAN

Ted Kitterman is a content manager for Great Place To Work®. Ted has experience covering the workplace, business communications, public relations, internal communications, work culture, employee well-being, brand purpose and more. His work shines a light on the unparalleled data and insights offered by Great Place to Work’s decades of research, helping the company share its vision of a great place to work For All™.

Great Place To Work identifies Best Workplaces in Asia™ by surveying 2.1 million employees in Asia and the Middle East about the key factors that create great workplaces for all and analyzing company workplace programs impacting 5.9 million employees in the region.

To be considered, companies must first be identified as outstanding in their local region by appearing on one or more of our Best Workplaces lists in Bahrain, Greater China (including China, Hong Kong and Taiwan), India, Indonesia, Japan, Kuwait, Oman, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, UAE, Vietnam during 2022 or early 2023.

Companies rank in three size categories: Small and Medium (10-499 employees); Large (500+); and Multinational. Multinational organizations are also assessed on their efforts to create great workplaces across multiple countries in the region. They must appear on at least two national lists in Asia and the Middle East and have at least 1,000 employees worldwide with at least 40% (or 5,000+) of those employees located outside the headquarters country.

Great Place To Work identifies Best Workplaces in Asia™ by surveying over 1 million employees in Asia and the Middle East about the key factors that create great workplaces for all and analyzing company workplace programs impacting over 4.7 million employees in the region.

To be considered, companies must first be identified as outstanding in their local region by appearing on one or more of our Best Workplaces lists in Greater China (including China, Hong Kong and Taiwan), India, Indonesia, Japan, Kuwait, Philippines, Qatar, Saudi Arabia, Singapore, South Korea, Sri Lanka, UAE, Vietnam during 2021 or early 2022.

Companies rank in three size categories: Small and Medium (10-499 employees); Large (500+); and Multinational. Multinational organizations are also assessed on their efforts to create great workplaces across multiple countries in the region. They must appear on at least two national lists in Asia and the Middle East and have at least 1,000 employees worldwide with at least 40% (or 5,000) of those employees located outside the headquarters country.

Great Place To Work® Best Workplaces™ in Singapore 2023 Evaluation Methodology

This year, Great Place To Work® Singapore is proud to launch our inaugural Singapore Best Workplaces™ in Healthcare & Biopharma List. This list recognizes exemplary companies in the healthcare & biopharma industry.

Recognized as a global hub for medical technology and research, Singapore has attracted top healthcare and biopharma talents and companies from around the world. It has become the center for essential healthcare services and innovations with its world-class research institutes, academic medical centers, and industry clusters.

In turn, the healthcare and biopharma sectors play a critical role in the country’s economic competitiveness, sustainability, and innovation. These industries have significantly helped in the overall improvement of public health and well-being of the people of Singapore and its neighboring countries.

The inaugural Singapore Best Workplaces in Healthcare and Biopharma List puts the spotlight on the organizations that are dedicated to providing employee satisfaction and engagement, and their commitment to excellence in the industry.

The companies in our Great Place To Work Certified™ community have the premier distinction that helps attract the best talent, build your employer brand, and secure a competitive advantage. To achieve this, they built a working environment that is purpose-driven and people-first. These companies have demonstrated that showing authentic care, prioritizing employee’s holistic well-being, and building a culture of trust go hand in hand with growth and success.

To determine the 2023 Singapore’s Best Workplaces in Healthcare and Biopharma, Great Place to Work®️ analyzed confidential survey feedback representing nearly 12,000 employees working in the tech industry in Singapore.Employees responded to over 60 survey questions describing the extent to which their organization creates a Great Place to Work For All™️. Eighty-five percent of the evaluation is based on what employees say about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do. Great Place to Work analyzes these experiences relative to each organization’s size, workforce make up, and what’s typical relative to their peers in the industry.The remaining 15 percent of the rank is based on an assessment of all employees’ daily experiences of innovation, the company’s values, and the effectiveness of their leaders, to ensure they’re consistently experienced.To be considered, companies had to meet the Great Place to Work-Certified standard. To ensure survey results truly represent all employees, Great Place to Work requires that Trust Index©️ survey results are accurate to a 95% confidence level with a 5% margin of error or better. We review any anomalies in survey responses, news and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results. Companies with 10 to 99 people were considered for the small and medium category; companies with 100 employees or more were considered for the large category.

Great Place To Work® Best Workplaces™ in Singapore 2023 Evaluation Methodology

To determine the 2023 Singapore’s Best Workplaces in Technology, Great Place To Work®️ analyzed confidential survey feedback representing nearly 12,000 employees working in the tech industry in Singapore. Employees responded to over 60 survey questions describing the extent to which their organization creates a Great Place To Work For All™️. Eighty-five percent of the evaluation is based on what employees say about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do. Great Place To Work analyzes these experiences relative to each organization’s size, workforce make up, and what’s typical relative to their peers in the industry. The remaining 15 percent of the rank is based on an assessment of all employees’ daily experiences of innovation, the company’s values, and the effectiveness of their leaders, to ensure they’re consistently experienced. To be considered, companies had to meet the Great Place To Work-Certified standard. To ensure survey results truly represent all employees, Great Place To Work requires that Trust Index©️ survey results are accurate to a 95% confidence level with a 5% margin of error or better. We review any anomalies in survey responses, news and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results. Companies with 10 to 99 people were considered for the small and medium category; companies with 100 employees or more were considered for the large category.

Methodology

This year, Great Place To Work™ Singapore is proud to launch our inaugural Singapore Best Workplaces in Technology List. This List recognizes exemplary companies in the information and communication technologies industry in four categories:

  • Micro category (10–29 employees)
  • Small (30-99 employees)
  • Medium (100-999 employees)
  • Large (> 1000 employees)

With Singapore’s ambition to be recognized as a regional technology hub, the influx of technology firms (around 80 of the world’s top 100 technology firms have a presence here) and global rankings that place us a leading technology hub outside of San Francisco, the establishment of a Singapore Best Workplaces List in Technology is indeed a timely and needed one. Technology firms in Singapore are characterized by hyper-growth and ambitious expansion plans. This means a continuous war for talent in a highly competitive and rapidly evolving industry.

To maintain our lead as a technology and innovation hub, the ability to attract, retain and sustain skilled talent is critical. We are proud that companies in our Great Place To Work®-Certified community List have built a high-trust culture, engaged employees and maximized their potential to facilitate innovation. They are purpose-driven and adopt a people-first mindset. These are companies that have shown that authentic care and employee well-being need not be compromised for ambitious growth, and that it is possible for businesses to scale up quickly and responsibly. Their culture and core values are embodied in every individual—from senior leadership to rank-and-file employees—and differentiate them from their competitors, priming them to be powerful magnets for top talent.

To determine the 2022 Singapore’s Best Workplaces in Technology, Great Place To Work®️ analyzed confidential survey feedback representing nearly 12,000 employees working in the tech industry in Singapore.Employees responded to over 60 survey questions describing the extent to which their organization creates a Great Place To Work For All™️. Eighty-five percent of the evaluation is based on what employees say about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do. Great Place To Work analyzes these experiences relative to each organization’s size, workforce make up, and what’s typical relative to their peers in the industry.The remaining 15 percent of the rank is based on an assessment of all employees’ daily experiences of innovation, the company’s values, and the effectiveness of their leaders, to ensure they’re consistently experienced. To be considered, companies had to meet the Great Place To Work-Certified standard. To ensure survey results truly represent all employees, Great Place To Work requires that Trust Index©️ survey results are accurate to a 95% confidence level with a 5% margin of error or better. We review any anomalies in survey responses, news and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results. Companies with 10 to 99 people were considered for the small and medium category; companies with 100 employees or more were considered for the large category

 

Methodology

To determine the 2022 Singapore’s Best Workplaces™️, Great Place To Work®️ analyzed confidential survey feedback representing close to 70,000 employees across different industries in Singapore. Employees responded to over 60 survey questions describing the extent to which their organization creates a Great Place to Work For All™️. 85% of the evaluation is based on what employees say about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do.

Great Place To Work analyzes these experiences relative to each organization’s size, workforce make up, and what’s typical in their industry. The remaining 15% of the rank is based on an assessment of all employees’ daily experiences of innovation, the company’s values, and the effectiveness of their leaders, to ensure they’re consistently experienced. To be considered, companies had to meet the Great Place To Work Certified standard. To ensure survey results truly represent all employees, Great Place To Work requires that Trust Index©️ survey results are accurate to a 95% confidence level with a 5% margin of error or better. We review any anomalies in survey responses, news and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results.

Companies with 10-29 people were considered for the Micro category; those with 30 to 99 people for the Small category; companies with 100 to 999 employees were considered for the Medium category; and those with 1,000 or more for the Large category.

Great Place To Work® Best Workplaces™ in Singapore 2023 Evaluation Methodology

To determine the 2023 Singapore’s Best Workplaces in Technology, Great Place To Work®️ analyzed confidential survey feedback representing nearly 12,000 employees working in the tech industry in Singapore. Employees responded to over 60 survey questions describing the extent to which their organization creates a Great Place To Work For All™️. Eighty-five percent of the evaluation is based on what employees say about their experiences of trust and reaching their full human potential as part of their organization, no matter who they are or what they do. Great Place To Work analyzes these experiences relative to each organization’s size, workforce make up, and what’s typical relative to their peers in the industry. The remaining 15 percent of the rank is based on an assessment of all employees’ daily experiences of innovation, the company’s values, and the effectiveness of their leaders, to ensure they’re consistently experienced. To be considered, companies had to meet the Great Place To Work-Certified standard. To ensure survey results truly represent all employees, Great Place To Work requires that Trust Index©️ survey results are accurate to a 95% confidence level with a 5% margin of error or better. We review any anomalies in survey responses, news and financial performance to ensure there aren’t any extraordinary reasons to believe we couldn’t trust a company’s survey results. Companies with 10 to 99 people were considered for the small and medium category; companies with 100 employees or more were considered for the large category