It is evidently a no-brainer, and yet a broadly misunderstood concept: Happy employees make better companies, and better companies (should) make more money. However, translating this easy-to-grasp formula into reality is an entirely different conversation. Not even half of American workers were satisfied with their jobs in 2013, a figure well below the long-term average of over 60 percent (data kept since 1987). Even worse is the global lack of passion at the workplace. Last year, a recognized think tank concluded that only 13 percent of employees in more than 140 countries felt really engaged in their profession. Think of it this way: If you are the constantly busy and overachieving one at your job, nine of your colleagues likely don't "give a hoot."
In the U.S., the low point of workplace dissatisfaction was reached in 2010 (at a ratio of 42.6 percent), shortly after the Financial Crisis had passed and taken a significant toll on employment. A new national study finds that the uneven and protracted economic recovery has led many Americans to believe that the prospects for professional success have changed permanently for the worse, leaving a great majority with a pessimistic outlook about their futures. The reality, quite unfortunately, underlines this belief. Even considering the ever-popular message that the labor market is recovering along with the economy, it is an undisputed fact that America is largely "under-utilized," with millions of job-seekers working in part-time arrangements, often taking on more than one job to make ends meet.
An unbelievable two-thirds of Americans are stressed and insecure about their jobs and many even fear taking a much-needed and relaxing vacation; this is a rather sobering fact and, at the same time, indicative that many workers do give a hoot but potentially channel this energy into the wrong aspect of work life: Fear. Of course, there is the other side of the story, particularly America's corporate executive suite. Even though being the boss has become much more lucrative over the years, trying to deal with a declining work ethic across the board poses a significant challenge. Perhaps this is why the business for executive coaching is booming and absorbed more than $1 billion last year. The lasting effects, nevertheless, are questionable, as the workforce wants empathetic and fair leaders, while shareholders want hard facts and ever-expanding corporate profits-often a recipe for total disconnect between the two objectives and groups.
Not all is in vain: For more than 25 years, the Great Place To Work Institute has studied the professional landscape and consulted executives and employees with the objective of turning good companies into great companies. Whereas the process of transitioning from a heavy-headed and frustrated workforce to a productive and collaborative one appears to be nearly impossible, there seems to be a single, differentiating key factor: Trust. Trust that employees and managers feel toward one another serves as the foundation for companies to be highly productive, motivated, and lucrative. Simon Sinek, a recognized coach and author, even brought "chemical proof" to this idea: If employees feel "protected" and can trust their leaders, their entire biochemical outfit aligns with goals and objectives of their professional and private lives.
As I am in the investment business, there is, of course, the pressing question of whether the described "feel-good" factors actually have commercial value, as in our initially stated formula. Apparently, U.S. equity markets are booming on the belief that corporations are at the top of their game, regardless of how motivated employees may be. It is, however, a proven fact that the best companies to work for are creating better returns for their shareholders, irrespective of being privately held or publicly traded. Great Place To Work® companies, between the years 1997 and 2013, have returned 11.80 percent annualized, while the S&P 500, over the same 15-year period, returned a little over 6 percent. Make no mistake, the compounding effects are significant: A dollar invested in the "best companies" would be worth $16.26 today and the "S&P dollar" only $4.33.
A few things to take away: First, even with extensive financial innovation occurring, no one has capitalized on the "best company" concept. To our knowledge, not a single Exchange-Traded/Mutual Fund or Managed Account built exclusively on this premise is available (we will happily stand corrected). Second, all research on the topic is quite simple and focused on obvious concepts, and it is about time, given the devastating numbers for workplace satisfaction, to be reminded of the deep-rooted value systems inherent to every decent human being. Change to foster workplaces that are exciting, creative, collaborative, and (!) profitable is carried in each one of us. Leadership, on the other hand, should not only be considered a concept of hierarchy, but also a higher standard to which we hold ourselves and others accountable.