Posted By:

Trish Barnes on December 10, 2015

How to Build Employee Morale and Keep it Up

Creating a positive company culture with high morale and motivated employees tends to translate into increased productivity and, ultimately, profitability. On the other hand, low employee morale and unmotivated employees often lead to increased turnover, diminished productivity and lower profitability.

As the economy continues to heat up after the Great Recession, workers have more options than they used to (especially highly-skilled workers) — and many will quickly jump ship for other opportunities and better treatment. Building high employee morale is an important aspect of running a successful company.

The Importance of Employee Morale/Retention

Although employee morale is an abstract concept that can’t be tangibly measured, it impacts several areas of operations that can be measured in concrete terms. Increased morale equals a higher retention rate and decreased morale equals a lower retention rate.

Why should you be so concerned with keeping employees and minimizing turnover? Besides having to go through the painstaking process of recruiting, interviewing and training, research indicates that turnover costs companies a significant amount of money. In fact, ERE Media found that:

  • For entry-level employees, it costs between 30-50 percent of their annual salary to replace them.
  • For mid-level employees, it costs upwards of 150 percent of their annual salary to replace them.
  • For high-level or highly specialized employees, you’re looking at 400 percent of their annual salary.

There also tends to be a correlation between low morale and low productivity because unhappy workers often lack the motivation of happy workers. This can rear it’s ugly head in several ways including:

  • Counterproductive behavior
  • Poor customer service
  • High absenteeism rates
  • Illness
  • Employee distrust

The bottom line is that a workforce of happy, healthy, satisfied and present employees will accomplish much more than unhappy, unhealthy, dissatisfied and frequently absent employees. When a company has high employee morale, its workers are likely to stick around longer and have a deeper sense of loyalty.

How to Establish a Positive Work Culture

While there’s no one-size-fits-all formula that works for all businesses, there are several ways to boost employee morale and establish a more positive working environment. Perhaps the most effective way to accomplish this is to offer employees comprehensive benefits such as healthcare, retirement, dental and life insurance. Studies have shown that benefits like these rank very high in terms of what employees are seeking.

Offering development opportunities where individuals can be promoted and work their way through the ranks can also serve as a good motivator. Many workers enjoy being challenged and like to know that there’s a chance for growth.

Also, many employees and especially millennials put a priority on achieving a healthy work/life balance and want their employers to recognize that they have other objectives and pursuits than just work. Consequently, offering flexible scheduling and having telecommuting options can be beneficial.

Some additional ways to improve morale and establish a positive work culture include:

  • Recognizing individuals for their accomplishments and showing appreciation
  • Offering adequate breaks
  • Offering competitive pay
  • Encouraging communication

For a business to truly thrive and have any real sustainability, it’s critical to achieve a positive company culture where its employees “buy in” and everyone’s on board. By taking measures to increase employee morale and building trust with your staff, it should put your company in a favorable position and ensure that you’re competitive within your industry.