Why Employee-Centered Workplaces Have Stronger Business Outcomes

When I entered corporate America 20 years ago, I remember being told that appreciation was my paycheck, not to question authority and to keep my head down and be patient about success. Fast-forward to 2024, and employees expect more from their employers. Rather than a paycheck of gratitude, employees want their work to be purposeful and expect their employers to care about them fully as human beings.

That’s why the research report from Future Forward Institute is so important. They found a strong correlation between employee-centered workplace practices and financial growth. In my interview with Dr. Angela Jackson, founder of the Future Forward Institute and Harvard lecturer, she shared, “In the news, we hear this false tug of war between employees and employers. It’s the counter-narrative that is true—employees and employers partnering together is a win-win. To be employee-centered is the competitive advantage in business now.”

There are three primary reasons that employee-centered workplaces have stronger business outcomes:

1. Younger generations have more power.
2. Employees have more options.
3. There is a strong correlation to business outcomes.

Younger Generations Have More Power

Unlike my generation, which entered the workforce 20 years ago, younger people have more power. The economy is strong, there is a labor shortage and employers don’t have enough people to replace older generations as they retire at a faster rate. As Jackson expands, “Employee-centered workplaces realize that the younger generations are replacing older generations much more quickly than past generations, and realize they need to pivot more quickly to younger generations’ changing needs,” Jackson said.

Rather than a power grab between employers and employees, employee-centered workplaces look at power distributed equitably across employees. Rather than a chain-of-command hierarchical structure, employee-centered workplaces empower their employees through inclusive leadership.

Employees Have More Options

Younger generations value purpose over paychecks. That means they’re willing to forego traditional benefits for a more employee-centered work experience. They want to have a voice, they expect to be respected and they value flexibility and the trust that they’re doing their best work (and on their own terms rather than their employers’).

“People will opt for flexibility and purpose over higher pay. We are going to see the best employees exercise their transitioning to different organizations that align with their lifestyle, values and priorities. If employers refuse to change, they will lose out on top talent. If you want employees to have an ownership mindset, you cannot micromanage them,” Jackson said. Fewer than one in four U.S. employees feel strongly that their organization cares about their wellbeing—the lowest percentage in nearly a decade—creating a loss for both employees and employers.

Strong Correlation to Business Outcomes

Employee-centered workplaces have a proven record of success. Jackson’s study found that:

• Fifty-five percent of companies that excel in fostering mutualistic working relationships also show strong valuation outcomes.
• Fifty-one percent of firms with robust mutualistic working relationships achieve higher profits as a percentage of sales.
• Fifty-four percent of companies that innovate in employee benefits report higher profit margins.
• Fifty-six percent of companies that reimagine employee benefits demonstrate improved valuation performance.

Dr. Jackson has a Win-Win Workplace framework with key practices that she found are highly correlated to business outcomes:

1. Openness to listening (beyond a suggestion box)
2. Inclusive decision making (allowing more time and engaging technology)
3. Mutualistic working relationships (employers are serving employees)
4. Ownership culture (employees are centered)
5. Deep talent pipeline building (screen people in vs. out)

How often do you see these behaviors demonstrated in your workplace? Perhaps, as a well-intentioned leader, it’s easy to know what you “should” be doing versus what you are “actually” doing. Be honest with yourself.

Case Studies

Jackson researched workplaces firsthand for the study that provided the data in the aforementioned research report. One example she points to is Discover Financial Services. They needed a new call center for customer service. Instead of going to a traditional suburban area, they placed it on the south side of Chicago in an underserved community. By focusing on employees first and listening to their needs, they saw lower turnover, lower real-estate costs, higher productivity and a deeper connection with the local community. They now use this as a model for other communities, and they just reached their goal of hiring 1,000 employees at the call center.

The Win-Win Workplace culture at Discover’s Chatham facility is visible throughout—from the front desk to the leadership team. Discover is seeing a direct correlation between their culture and their business results, as the new call center boasts a 40% higher retention rate than other call centers in the network. Equally impressive is the broader impact of these jobs. Since opening the site, Discover has spent more than $3 million on local restaurants, $1 million on local vendors for daily operations and $8 million with Black-owned contractors for construction projects, all informed by employee voices and listening.

Nearly 20 years ago, when I was managing second-shift operations for a large warehouse, I quickly realized the power of listening to employees. My employer implemented Six Sigma, a process-improvement approach. We had big boards around our warehouse where employees could place their ideas. Instead of getting complaints, there often were problems with proposed solutions. Even if employees didn’t know what the solution was, they articulated why the problem was hurting the business. By connecting employees’ solutions to business problems, we were able to achieve a record-high employee-engagement score.

As Dr. Jackson’s team indicates, “Taking even small steps towards improving metrics on one or a few elements of the framework can make a major difference in the lives of workers and yield tangible benefits to the firm.”

Employee-centered workplaces have stronger business outcomes because employees have more power and more options. Employee-centered workplaces thrive with an openness to listening, inclusive decision making, mutualistic working relationships, an ownership culture and deep talent-pipeline building.