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3 Reasons to Invest in Your Employees [Podcast]

Episode 133: Michael and Kathryn talk about why business leaders should invest in their employees and how this will ultimately transform morale, improve retention, and increase profit. If you've ever struggled with prioritizing company culture, especially if you feel too busy or your budget is tight, then this episode is for you.

happy team at table


In This Episode You Will...

  • Discover what efforts will actually improve your team's overall morale.
  • Find out how poor retention affects your team dynamics.
  • Get our tips for improved employee engagement and leveraging public recognition.
“If you invest in your employees, it's going to make your life and the life of your employees better by multiples."
- Kathryn Redman

Resiliency Quiz

References:

www.fulfilledthebook.com

 

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Michael:
              Hello there and welcome to HaBO village podcast. I'm Michael Redman.


Kathryn:
               And I'm Kathryn Redman.


Michael:
              And today we're going to talk about...


Kathryn:
               We're going to talk about the three reasons you should be investing in your employees.


Michael:
              So stay with us. It's going to be a great show. So thank you so much for coming today and joining us. This podcast is about really helping you as business leaders, develop passion provision companies, full of purpose and profit and legacy, and all those cool things. Because we know it's possible, and we want to give you hope and encouragement and hopefully some tips along the way to actually practically apply all this stuff.


Kathryn:
               Yes. We live to remind you of the possibility of Passion and Provision. Both of them, not mutually exclusive, both.


Michael:
              So, just to give a little bit of hope to our listeners right now, if you've been listening to us for a long time, you've heard about Rabbit Hole Hay. If you haven't been listening to us, it is our other startup that we started in 2012. We've been in business together, Catherine and I, well, we've been married for 27 years. We've been in business at Half a Bubble Out and HaBO Village for 18 years plus, and we started in 2012, a company in the pet food industry called Rabbit Hole Hay.


Kathryn:
               Because when you're a marketing company, why would you not want to sell hay to rabbits?


Michael:
              We're basically...


Kathryn:
               I mean-


Michael:
              We're not basic. I was going to say, we're basically entrepreneurs. I'm an entrepreneur. Catherine...


Kathryn:
               Tags along.


Michael:
              Tags along as a reluctant entrepreneur, but she's come to love it. And so part of our journey is to actually be processing and walking through what does all that look like? How do we do it? So on and so forth. That said, RHH right now. We just, this is this place where I want to encourage you. This is the first year we've actually been profitable.


Kathryn:
               Which we learned this morning is also true for Tesla. So I'm feeling pretty good about being compared to Tesla in our own minds.


Michael:
              What's similar to our little company, our little pet food company, and Tesla?


Kathryn:
               First year of profitability. Whew!


Michael:
              It doesn't always come fast.


Kathryn:
               They might have more big numbers than we do, but.


Michael:
              Their profit is a little bit bigger than ours probably.


Kathryn:
               Probably.


Michael:
              But whether you're running a large company like that or a small company, sometimes it just takes a while to hit those numbers and everything else. And in the midst of the journey, it can seem incredibly painful and difficult. Sometimes you go, is it worth it? Should we be doing this? And we have continued to pursue and live out this Passion and Provision business model that we have, that we've written about in our book Fulfilled, to actually we're living it out. We're practicing.


Michael:
              And I want you to know we didn't just do it once and that's it. We're continuing to apply it. And it doesn't mean that every day is awesome and amazing, but we are seeing the fruit of that journey, of following that wisdom that we've been given on all the years. And in the book Fulfilled, we've really pulled together so many different pieces of wisdom that we've learned, that have been shared with us, and we've been taught. And it can be great. And right now we're on one of those highs where I just wanted to share it, because we're just excited about what's happening.


Kathryn:
               I keep pinching myself. We almost gave up.


Michael:
              Wow, there's money.


Kathryn:
               Yeah, we almost gave up about a year and a half ago.


Michael:
              We almost said, this really is...


Kathryn:
               I don't think this is ever going to turn the corner.


Michael:
              Never going to make it. And it has. And our business partner who, again, we are really big pros on having the right business partners, because nobody gets to clarity alone and nobody achieves anything great alone. And so if you're in a place where it's just difficult or you're struggling, you haven't seen it. A, it is possible to get to the other side of this, so often, and survive and not be one of the casualties of business and statistics. And to actually get to a place where you're in business, there's money, and you're enjoying it. And we've seen that in Half a Bubble Out for years, we've seen that in Rabbit Hole Hay, and we've seen that in other companies that we've worked with, and it's possible for you. So today's subject is we're going launching off of that, that platform of it's possible, and giving a little hope. Take us into this, Kathryn, and tell us what we're doing.


Kathryn:
               So to remind you, in case you've forgotten, the topic today is three reasons that you should be investing in your employees.


Michael:
              Why would we even talk about this?


Kathryn:
               So we were in a conversation very recently where one of the questions that the person who was interviewing us asked is how do you encourage entrepreneurs leaders to not milk every dime out of the profit of their company, but to actually reinvest in their employees? How do you convince them that that's a good thing to do, that it's the right thing to do, that all of the investment doesn't have to go to marketing, that you actually, there's a value to investing in your employees? So that was the question.


Michael:
              And there seemed to be in the midst of that conversation too, the sense of not just the money, but why wouldn't you spend the time in making a culture that's worthwhile? Why wouldn't you invest emotionally in your employees, or your team, or whatever. And if you're listening today and you have a company and you have employees, this is really relevant, because sometimes we just get frustrated. Or there's something we can do to level up a little bit more and make it even better if we have these values. But some of you, I know you're... We have worked with so many leaders who, I love my people, blah, blah, blah. You know? And we say, "Well, why don't you encourage them?" And they're like, "Why do I need to encourage them? I pay them. If they screw up, I tell them they're doing something wrong. If not, they're doing great. They know they're doing great."


Michael:
              It's like telling your spouse I love you on the day you get married, and never saying it again, because why do I need to say-


Kathryn:
               I never took it back.


Michael:
              Never took it back. And you can't do that. And if you're a solopreneur, and you don't have any employees, why is this relevant for me? It's relevant because as you achieve your dreams, you're going to grow your vision. You're going to grow into something that you want. And you may not be able to do it all by yourself. Even if you have to outsource, freelancers, 1099s, something like that. And you have to be able to use all of these skills to manage, because you have to manage your vendors and there's no way around it. You don't get to go out and hire somebody and they're completely autonomous. They need your communication. They need to know that you're worthwhile, and you want to be a good customer to them, because if you show that you're a good customer to them and they like serving you, they'll continue to stick around. And we've seen it where it's like, we did that one contract, we don't want to do a second one with you.


Kathryn:
               Right. Whereas when we look at the way that our team is put together, we've got W2 employees, but we also have some really long-term 1099 folks. Folks that freelance for us but we're their biggest client.


Michael:
              Yeah, absolutely.


Kathryn:
               And we're talking seven, eight, nine, 10 years of working together, and it's good for them, and it's good for us, because we care, and we invest, and we're really fun to work with.


Michael:
              And we're fun to work with!


Kathryn:
               Come on, come on. We're bubbly. We were just told we were bubbly.


Michael:
              Bubbly people.


Kathryn:
               We're bubbly! We're Half a Bubble Out and we're bubbly.


Michael:
              Bubbly, I liked that. I thought that was very creative use of words.


Kathryn:
               So three reasons to invest in your employees. I'm going to tell you what they are and then we're going to unpack them. Okay?


Michael:
              Oh, that's very efficient.


Kathryn:
               I know. So that way you can, I don't know, be done after I tell you, if you think you understand it all. And if not, you can stick with us while we unpack it. So three things, three reasons.


Michael:
              Number one.


Kathryn:
               Number one, it improves morale. We'll talk about that.


Michael:
              Number two.


Kathryn:
               Number two, it improves retention. We're going to talk about that.


Michael:
              Number three.


Kathryn:
               And number three, if all you care about is the bottom line, by the way, it actually improves profit.


Michael:
              Whoa!


Kathryn:
               What? So we're going to tell you now, and then tell you again at the end that if you invest in your employees, it's going to make your life and the lives of your people better by multiples.


Michael:
              One, two, three. What are those again?


Kathryn:
               Improves morale, improves retention, improves profit.


Michael:
              Okay. Let's dive into it. First one.


Kathryn:
               Morale.


Michael:
              Morale.


Kathryn:
               Do it.


Michael:
              What is morale? How do we talk about morale?


Kathryn:
               It's the state of being, how enthusiastic and encouraged, and the mood and the attitude of your peeps.


Michael:
              You know what I think about when I hear the word morale?


Kathryn:
               Tell me.


Michael:
              The morale of the troops,


Kathryn:
               The morale of the troops.


Michael:
              Right, growing up-


Kathryn:
               Are they ready to go into battle?


Michael:
              Are they ready? What's the morale?


Kathryn:
               Do they feel helpful?


Michael:
              Morale is low. Moral is high. Oh, they don't want to fight for you. Oh, they want to fight for you. I mean, I watched a lot of war films growing up and as an adult, I watch a few, but there's not as many as there used to be. And you talk about the morale of the troops, and there's always a point in the film where the morale is really low. Everybody's down in the dumps.


Kathryn:
               And what does it require to improve morale? Really good leadership.


Michael:
              It does. In the movies, it's always an amazing speech.


Kathryn:
               Yes.


Michael:
              It was said on top of a table or on top of a desk or...


Kathryn:
               This is the speech that General Patton gave his troops to improve morale. Yes.


Michael:
              When I think of dead poet's society even, and he was... I mean, what he did is he had a bunch of students who hated school. They were just going through the grind. They're in private school, blah, blah, blah. This is what we have to do to get good grades to pass. And he was trying to inspire them to actually learn so that they would get more out of it. And his life wouldn't hopefully suck as to teaching to these people who just are grinding it through as a task.


Michael:
              And so morale in a business, whether it's your vendors, or whether it's employees and fellow leadership, is all about what kind of attitude do they have and how optimistic are they for the future? Because it is incredibly powerful in statistics and research that when you are optimistic about tomorrow, your work is more inspired, more efficient, more effective, more creative. You can problem solve better because you're optimistic. We have a saying in our house, and the saying is, there's always...


Kathryn:
               Hope.


Michael:
              There's always hope.


Kathryn:
               There's always hope. Is there hope? There's always hope.


Michael:
              There's always hope. And we really believe it. We choose to look at life like that. And when we've had a bad day, we always say that in the morning...


Michael:
              New mercies.


Kathryn:
               There's new mercies. New mercies.


Michael:
              Just get a good night's sleep. Get up every morning.


Kathryn:
               Start over tomorrow.


Michael:
              And you have a new day and fresh mercies.


Kathryn:
               Well, and think about it. If you're the boss of the company and you walk in the front door and you say, good morning-


Michael:
              Good morning!


Kathryn:
               To your receptionist, and how are you today? And the answer is., "I'm all right. Yeah, I'm okay." What does that do even to you, let alone anybody else and how is that human answering the phone?


Michael:
              In your mind, you're like, what is her problem and why is she talking to people that walk through the door? This is such a mistake to have her there.


Kathryn:
               So just the general sense of just having that sort of upbeat, people are encouraged, people are happy to be at work. There's something so powerful in a culture of people working together that are happy to be there.


Michael:
              Happy. Yeah, it's true. And so this is really important. So what do we do? What does a leader do when you're trying to increase morale outside of a feature film that's a 90 minutes long?


Kathryn:
               You give the speech.


Michael:
              That's in the movie. Outside of the movie.


Kathryn:
               You stand up on a table and you give a rah-rah speech. Okay, give us something else. Give us something else practical, would you?


Michael:
              Something? Well you want is, first of all, you need to set people up and go, look, I am optimistic. I am encouraged. And if I'm not, I mean, leadership really starts with that whole idea of, how do I pour into people and show them that I'm doing okay? Now we're not trying to hide stuff. We want to be vulnerable and we want to be authentic, but people want to see their leaders, need to see their leaders, that even if they're struggling with something they're optimistic that they're going to solve the problem. And they don't want them to see them in despair. It really scares them when their leaders don't know what's next. It happens in small companies and large companies. I was watching this documentary with Disneyland, about the Imagineers on Disney plus, great documentary about multi series documentary on-


Kathryn:
               It's the reason to buy Disney Plus in Michael's opinion. The reason to have the monthly subscription is so you have access to the Imagineer documentary.


Michael:
              I said I was on my second way through, but I think it's actually my third way through.


Kathryn:
               It's possible.


Michael:
              And so remember, first of all, after Walter had died and Roy had died and there was this leadership craziness, and they got into this place where they had all these things that they were supposed to do. Imagineering and all this, and themes, and they worked on some really big projects, and it took everything they could do, and it was good. It was busy. It was everything else. But what they didn't have is they didn't have any clue. And one of the things the leadership at Imagineering said about the leadership of Disney is, this interim leadership, they had no idea what was next. There was no vision. There was no clarity. And they were expecting, I mean, they had had Walt as their visionary up to this point, and he was gone, and Roy was gone. And Walt Disney world was finished, and crap.


Kathryn:
               What do we do?


Michael:
              And I remember hearing that. And then I remember one of the other leaders who was one of the senior leadership at Wed, which was what is now the Imagineering station. And Wed was what it was first called.


Kathryn:
               WTA?


Michael:
              No, just Wed. WTA is W-T-A. It was-


Kathryn:
               No, that was one of-


Michael:
              Jackson's special effects company.


Kathryn:
               Peter Jackson.


Michael:
              Yeah.


Kathryn:
               Sorry.


Michael:
              In New Zealand.


Kathryn:
               New Zealand.


Michael:
              Yeah. For the movies-


Kathryn:
               Lord of the Rings.


Michael:
              Lord of the Rings.


Kathryn:
               Yes.


Michael:
              So-


Kathryn:
               Okay. We're going to get this, so nevermind. I just bunny trailed us down WTA, and now you're thinking about Tolkien. I appreciate that, but that's not what we're talking about.


Michael:
              That's what we're talking about.


Kathryn:
               Back to Disney.


Michael:
              So back to Disney. And I remember him going, they were getting ready for layoffs. This is the senior leader and the VP over Imagineering. And he's like, you see these pictures of him when he's younger and around his people. And he's like, I'm terrified. I'm terrified that we're going to be shut down. I'm terrified that a whole bunch of people were going to lose their job. It was incredibly stressful at this one season, the company was struggling financially as the whole company of Disney. It was pre the ABC stuff, when they purchased ABC. And he's like, I was doing everything I could not to show all of that fear so that my people could be creative, because if they went into a place where they saw that I was terrified that their jobs aren't going to exist tomorrow...


Kathryn:
               Yeah. It's really hard to be creative when you're terrified you're not going to have a job tomorrow.


Michael:
              Oh my gosh. And so he was... So there's a point at which there's that balance, and morale is... A great leader is thinking not just about what their own emotions are and what they're going through. They're thinking about the people they're leading, and they're thinking about their attitude and everything else. And you're willing, even, to sacrifice or put aside some of your own desires and needs for the moment, so that your people can be taken care of and encouraged.


Michael:
              You don't want to fake it completely. But sometimes, for the moment, your emotions just need to be put in check. And really for your own health, find one or two people outside the company that are your confidents, and just vent and tell them how scared you are. And talk about it. A leadership coach, a close confidant or a friend, another business owner in another field. You've got to vent and you've got to take care of yourself, but you want to take care of the morale of your organization. How's that?


Kathryn:
               Okay. What if I'm in a good mood?


Michael:
              I'm super passionate. If you're a good mood, share it, spread it, go love on people, encourage them. And one of the key aspects of when we talk about the five areas of management, the final one is encouragement or public recognition.


Kathryn:
               Or public recognition.


Michael:
              You really, it's that, that a boy, or that a girl. And how well are you doing? And letting them know that you're proud of them, because so often we say I'm independent, everything else, but we really want the approval of our leaders. And we want the respect of our leaders, and we want the respect of our peers. And it is gold when somebody genuinely and authentically sees something that I did to contribute, whether it be a little thing or a big thing, and says thank you, Michael, for doing that. I saw that. I saw you do that, and I really appreciate it.


Kathryn:
               For sure.


Michael:
              There's this guy in one of our volunteer groups in the community groups that we work with, his name's Barry. You know Barry. And Barry's an interesting guy. He's in his seventies. He's never been married, no kids. He's a twin. He and his brother live together, and they're consummate volunteers and everything else. Barry is an amazing encourager, because he'll wait until something has happened. He'll wait for a quiet moment after an event when there's a lot of tension and everything else. And he'll say something like, I want you to know, I really appreciated how tactful you were in handling that difficult situation. I really want to let you know that I appreciate your encouragement in that moment.


Michael:
              And he waits until later, and then he comes back. And as a leader, there's times when Barry drives me crazy, but Barry sits there and has this amazing way of encouraging me. And then he'll also tell me about my other leaders and how they did something well. And I'm like, that's it. That's a Barry gold nugget that he sees. And as a leader, if you're worrying about morale, that's one very tangible thing you can do. Think about what Barry, what would Barry do?


Kathryn:
               WWBD? The other thing I just want to say out loud too, is that if the company is doing really, really well and you're having a great year, which okay, for 2020, some are, some aren't. But if you're having a great year, if your employees know that you're having a great year and the only one benefiting from that is you as the owner, that might not be great for morale.


Michael:
              It's tough.


Kathryn:
               And I say that because with Rabbit Hole Hay, with RHH, one of the things that we get to do for the first time is there's enough margin in life now to be able to give bonuses, for example. There's enough to begin to start doing some employee benefit types of things, things that will help improve morale. Like, we care about you, we're going to invest back in you and that's going to cost us. But we care enough about you that we want to do that. So those kinds of things are critical too. It isn't just financial, for sure. But to be in a position where everything's going really, really well, and you're stingy, that's not good for morale.


Michael:
              That's not good for morale.


Kathryn:
               Not good for morale.


Michael:
              So yeah, generosity almost never got you in trouble.


Kathryn:
               Almost never.


Michael:
              I wouldn't say never, but almost. So, the second point.


Kathryn:
               So the second point is, another reason to invest in your employees is it increases retention.


Michael:
              Okay. So let's talk about retention, and there's a couple of different things in retention. One is it creates a lot less stress. So there' emotional, psychological aspects to that and all that, and brain trust stuff. We'll come back to that in a second. The first one that's the biggest one we want to talk about is really money in your pocket. How much does it cost?


Kathryn:
               It costs about one and a half times the annual salary to replace and train somebody in any position.


Michael:
              One and a half to sometimes two X.


Kathryn:
               Sometimes two X.


Michael:
              Of a skill. Now, we're not talking about your basic, I just found some kid on the street and I pay him basic wages to chop wood. Split wood all day long, or to flip burgers all day long. But we're talking about skilled workers, which in today's world is most of the companies we're talking to. And that means, so to put numbers to it, if you're paying somebody a hundred thousand dollars a year and you lose them, it's going to cost you $150,000 to $200,000 in both lost revenue and lost potential, and inefficiencies of getting a new person in there and getting them up to speed.


Kathryn:
               And it also impacts morale. Because when people leave, when there's lots of turnover in a company, that massively impacts your culture, your morale, your ability to have cohesiveness, to get everybody on the same page. I mean, all of those parts that matter, from moving your company forward, get damaged when there's a lot of turnover,


Michael:
              And sometimes you just can't help it, right? There's going to be people that are going to leave. They're going to move on. They're still building in their career. What does that look like? They have big dreams of being something else or doing something else, and this is part of it. And they've served well and everything else, but you sometimes have to say, "I wish you the best and you were awesome. And I can't hold onto you. And you've got a great opportunity to go work at this other company and get an experience I couldn't give you." How do you say no to that?


Kathryn:
               Yeah.


Michael:
              But what you do is, when you can, you want to hold on to them, because A, of that costs, but let's talk about some of the different things. Institutional information. The institutional knowledge that an employee that's been very successful and been around a while is huge. It's like, well, they have all this knowledge of what's going on. And you can document all day long and can't document that knowledge well enough, the fluidity of it, and the quickness, and the speed, and the culture that they carry with them in the midst of it is powerful. What else? What else happens when you lose people and the turnover, the impact of turnover?


Kathryn:
               I mean, I've already said it, but I think one of the biggest things is how it impacts the way that the team works.


Michael:
              Elaborate on that.


Kathryn:
               So if you are actually a person who is working hard to develop your culture, which we want you to be, it's just one of the critical parts of what it looks like to have a Passion and Provision company is to invest intentionally in your culture. So when somebody is extracted from that culture, you lose something, especially if they were a really good person in your organization.


Michael:
              So let's talk about Ben.


Kathryn:
               Yeah. Do we have to? See, I knew you were going to go there. Okay. So we had this one employee who we loved and he got a great opportunity. He loved us and we had a great working relationship.


Michael:
              We're calling him out right now.


Kathryn:
               We're calling him out right now.


Michael:
              You rotten evil guy.


Kathryn:
               You rotten evil guy. But he got a great opportunity with a company that was much larger than ours. And we couldn't compete at the time.


Michael:
              Benefits, finances-


Kathryn:
               Yeah. All those things.


Michael:
              That kind of stuff.


Kathryn:
               So he needed to do what was best for his family. It was a good decision for him, but it was really, really hard.


Michael:
              He got a lot of autonomy. He got to focus on things that he just really wanted to focus on. Yeah.


Kathryn:
               Yeah. So for us, he left a hole, and there are days I still just go, God, I miss Ben.


Michael:
              Yeah.


Kathryn:
               And it was partly his competence. It was partly the work that he was doing, and all the different pieces and parts of what he was doing to help us move forward. But it was also just who he was as a human. He was fun, and he made people laugh, and he was silly and it was just really enjoyable. So when he left, it changed our culture. And then you have to move into a hiring process and you have to find someone, and you can't find that same person. No matter how great the next person is, it's a different person. And so it changes the makeup of your culture. And for us, I think for a period of time losing that one person affected the morale of our people.


Michael:
              It really did.


Kathryn:
               Because he was integral. And we're small enough that when one person like that leaves, it can hurt.


Michael:
              And for some companies, it's the team that they're around, there's enough employees that it doesn't affect the whole company, but it affects the team that they're on. Yeah. Especially when you have, when you really invest, this is the hard part, right. You're going to invest in the morale. You're going to invest in your employees about turnover. You're going to invest. You're not just investing financially, but you're investing emotionally.


Kathryn:
               Yeah. And some leaders would say, I'm not going to invest emotionally because of this very reason, because people leave and then it hurts, and I don't like it.


Michael:
              We had a manager here for three years, years ago. And she had come from an organization that had a thousand employees. And so there were lots of employees in her department that she oversaw, and she had learned, I'm not going to get, she had actually said, "I will not become emotionally attached to anyone. I will not put up pictures of my family and my office. I will not show them my personal side. I will not show them my life, and I don't want to know about all that other stuff, because if I have to ask them to leave, or if they leave at all, that is actually going to hurt too much. So I would rather not get attached at all and be vulnerable at all or anything like that because it hurts too much."


Kathryn:
               That didn't work out well for her in a small company.


Michael:
              It didn't work out well for her in a small company, and unfortunately, it hasn't worked out for her in her career because she's older now and she's moved through a few things. And last I heard still looking for places and she's, life has kind of empty. It's hard. And that's really difficult. It's challenging because when you don't invest in other people, you're the one that misses out. You really do.


Kathryn:
               Yeah. It's that paradox of, if you want to experience true joy and happiness, you have to also experience pain. You can't actually experience the great emotions and the positive emotions if you don't experience pain. Things become flat.


Michael:
              Well, and one of the 13 behaviors of trust is smart trust, and actually giving trust. So it's that whole concept of, if I want you to be vulnerable, I have to be vulnerable. If I want you to be trustworthy, I need to trust you. If I want you to trust me, I need to trust you, but I need to do it in a wise way. It's not just this random stupidness, because sometimes we get hurt because we were unwise in the way we did the right thing. We did the right thing in the wrong way. And as much as we think, well, my intentions were right. That doesn't always pay off.


Michael:
              So doing the right thing in the wrong way isn't always, and often isn't, the best way. So thinking about what it looks like to invest in these people, because it's better to have all the amount of quality of time we had with any of our employees, Serene, Raquel, Ben, any of them, we could go back throughout the ages and really go, wow, we're really, really, really happy for you, and we really like you and we miss you. I don't resent pouring into you and caring.


Michael:
              It hurt every time they said they were leaving and moving on, but we got to keep them. The amount of the quality of retention we've had is way above the norm, which again, it goes back to the average person under 30 stays in a job seven to nine months, is one of the national statistics I read. Seven to nine months in a job. In Washington, Seattle, Amazon and Facebook employees, I heard this last year, they're spending an average of four months at one company. And then they go and then they leave because they get offered a job across the street, because they're across the street from each other. And the companies are okay with it because it's like, oh, they go over there for four months. And then they come back. And then go over there for four months and they come back. And they're thinking, oh, this is great. But this is tragic. It really is.


Kathryn:
               It really is. Okay. So improves morale.


Michael:
              Improves morale.


Kathryn:
               This is three reasons to invest in your employees. It improves morale, it improves retention. And in case those aren't good enough-


Michael:
              Right.


Kathryn:
               And you're just thinking, yeah, but I really only care about the bottom line, which if you're that person, you may not listen to our podcast for very long because we're going to tell you that there's more to life than just the bottom line.


Michael:
              Right.


Kathryn:
               Though the bottom line matters.


Michael:
              Yes.


Kathryn:
               So the third reason to invest in your employees is because it actually helps your bottom line. It increases profit. It improves profit.


Michael:
              So tell me how.


Kathryn:
               Tell you how. Well, Michael, the reason it improves profit is because people who have good morale, people who are happy in their jobs, people who are engaged at work, perform better. Oh no, what are you talking about?


Michael:
              No way.


Kathryn:
               They perform better? Yeah. They actually do the job that they're supposed to be doing better. They do it faster. They're more efficient. They don't have the obstacles in the way, because there's not all this stress and anxiety about their workplace being nasty or toxic. They're not dealing with that bad employee relationship. All those things that get in the way of employee productivity are helped by improving morale, improving retention, investing in your employees. So your bottom line actually improves when you invest in your employees. Tell me any more about that.


Michael:
              Bam.


Kathryn:
               Bam. I don't know. It's it matters.


Michael:
              It does. And I mean, let's talk about specific things. A lot of people are going, this is what employees say, why would I sacrifice anything extra at work when they don't care about me?


Kathryn:
               Right.


Michael:
              Employees say this all the time, 74%. But when Gallop says 74% of employees in America are disengaged, now in the last 10 years, that number has dropped a bit. It's dropped to about 64. 64%. Well, more than half, significantly more than half. And it's back up again. So you've got this bouncing between 64 and high 70s, but we're not getting much better.


Kathryn:
               Well, and if you remember when they define what it means to be disengaged at work, what they're talking about is people who are literally sleepwalking through the day.


Michael:
              Yeah.


Kathryn:
               So it's not rocket science to think if somebody is sleepwalking through the day, they are not giving you their best. They are not helping your company move forward in positive, meaningful ways.


Michael:
              That's so true.


Kathryn:
               And so if you are able to help those folks connect their job to the meaning and purpose and vision of the company, help them grow, invest in them in ways, training, whatever else it is that begins to engage them. That can do nothing except improve your profit margin.


Michael:
              No, that's good. It's really good. And it does. And so there's a financial reason if you're just a cold blooded, financially numbers driven person, and you're like, I'm only in business to make a profit.


Kathryn:
               Or, if you have as CFO that you're partnered with, who has a lot of say in what you invest in and don't, that is that person who's like, I only care about the bottom line.


Michael:
              Right, right, right.


Kathryn:
               Because that happens too.


Michael:
              That happens too. And in all that, then you just go, look, this is the way it is. This you say to these people, I will invest, because it's good for us financially. If that's all you cared about now there's other arguments about, at what point, how much, okay, how much caring do I have to have? How much investment do I have to have to meet that minimum threshold? Look, you need to throw yourself in. This is a double-edged sword here. You have to throw yourself all into it and actually care, because people notice when you're fake caring. Authenticity-


Kathryn:
               Faux caring. Faux caring.


Michael:
              Faux caring. Faux caring sucks, faux caring is not a good thing. If you're faux caring at work, people notice. They know it's insincere. They know that it's not authentic. And more than anything else, you will actually damage morale, your community, and the perspective people have of you as a leader and how they perform for you even more.


Kathryn:
               Yeah. So don't pretend to care, care.


Michael:
              Care. And then you'll move forward and that'll bring you financially the benefits, and then on the other side, it will reduce your headaches. It will increase... People who know you care for them will go the extra mile for you. They'll want to problem solve more. They'll want to help you out. They want to take care of their leaders.


Kathryn:
               Yeah.


Michael:
              They want to serve.


Kathryn:
               They will serve the clients better because they want to make sure the company is doing well. It's good for them. It's good for you. I mean, it just makes your life and the lives of your people better by multiples.


Michael:
              And every once in a while you have people that are on your employees, that are on your staff, that if you care about them, they just take advantage of it. But the majority of people are actually going to go, if somebody cares about me, I care more about... And I care about more about employees, I care about more about what they care. If you have people-


Kathryn:
               Wow.


Michael:
              That was a lot of-


Michael:
              I care more about what they care about.


Kathryn:
               Yes.


Michael:
              I was talking too fast, wasn't I.


Kathryn:
               You were, and there was incomplete words. Sorry. Incomplete words. I don't know.


Michael:
              So if you care about people, they will care more about what you care about, and they know it. And if you have people who do not care, they're taking advantage of you, they are selfish, weed them out.


Kathryn:
               They're bad for your morale. They're bad for company morale.


Michael:
              I don't care how much you think they're producing in your culture, or if they're the great salesperson who's bringing in so much. If they're there just to be this leech on your company, get rid of them. You're going be better off in the long run without them, because eventually they're going to leave and it's going to hurt. But as long as you keep them, it's going to be poison in your system. So these are the three reasons. Give me three reasons one more time.


Kathryn:
               So three reasons to invest in your employees. It improves morale, it increases retention, and it improves profit.


Michael:
              We love those three things. We hope you found those three things helpful, because what we want to do is help you build here on this podcast, a Passion and Provision company, full of more profit, more purpose for you and the people that work for you and with you, and a legacy that you can leave that's beyond you. Beyond maybe, and we're starting to talk more about four generations of legacy. And I'm just going to encourage you just thinking about that. Where is your legacy and how are you improving the world around you, and the world after you're there? What does that look like? This is a Passion and Provision company. You get to enjoy the fruits of your labor today, as opposed to being punished by the toil that can become running a company.


Kathryn:
               Yeah. If you want to know more about any of this stuff that we're talking about, you can buy Fulfilled, the book.


Michael:
              We wrote a book about all of this stuff.


Kathryn:
               Fulfilled, and you can go to fulfilledthebook.com, which is why I keep tripping, and get that for $10. And there's a bunch of great bonuses. And we have an actual chapter on culture that really does talk about this topic in a little bit more depth.


Michael:
              Some really good stuff. We really thank you for joining us today. If you like this, tell somebody else about it. Hit subscribe in any of the podcasting softwares you're in, and share it with your friends. We want to help as many people as we can build a Passion and Provision company where they're fulfilled doing labor that they love, work that they love, and sharing that with the world. I'm Michael Redman.


Kathryn:
               And I'm Kathryn Redman.


Michael:
              This is the HaBO village podcast, we'll see you next time.


Kathryn:
               Bye-bye.