If you’re a Small Business owner you’ve already got some significant advantages when it comes to building and maintaining Employee Satisfaction, but you may not yet fully understand just how important that measure truly is to the long-term success of your business.

As busy Small Business owners, we have a tendency to keep focused on hard numbers.  Easily defined and understood concepts like profit, sales, and customer spend are a lot easier to sit down and crank out after a long day of work.  Taking a look at – and even making a plan to improve – Employee Satisfaction can seem like a ton of work for very little payout, but I can assure you it’s not.

To understand the importance of Employee Satisfaction we must first look at the benefits that come along with having a happy workforce.  Workers who are more engaged and happier with their jobs have better productivity and you’ll have lower turnover as a result.  For public facing companies this translates to serious dollars saved.  A 2012 Study from CAP estimated it cost business owners roughly 20% of the salary of the person who left to find, hire, and train a new employee.  This number held true for basically all positions under $75,000/year.

For years the Gallup Organization has done a workplace study in 100’s of organizations around the globe.  The results of this scientific study are discussed in depth in the book 12: The Elements of Great Managing (which I’ve reviewed previously) and the book is a great resource for anyone trying to get a handle on how to keep employees happy and motivated.  That’s one of the reasons why it became central to my Personal Rules for Business.

Essentially, when attempting to identify and quantify Employee Satisfaction it’s important to hit a few key concepts.

Professional Development

Do your employees know what is expected of them?  One of the real bonuses for many small business employees is the variety of work that gets to be tackled, but this can have a downside as well.  Do your employees have a clear understanding of how they’re being evaluated or are they just rewarded for doing whatever they’re told to do when they’re told to do it?

Do they feel their work is recognized and valued?  Just like the need for clear guidelines in how each employee is being evaluated, you must also make sure that there is some sort of feedback system in place to acknowledge that work.  Are you regularly acknowledging their work on they fly as well as during structured feedback times?

Are they receiving opportunities to grow and develop?  Conferences and training sessions with experts are all well and good, but employees value any time that is spent expanding their knowledge.  It serves a dual purpose to both make the employee feel more valuable and appreciated as well as creating a more responsive team member who is able to handle more tasks.

Employee Connectivity

Do they feel like they belong?  This can be a tricky concept with newer businesses, but more established businesses should be able to clearly articulate their business’ unique goals and objectives.  Employees who feel a strong connection to those goals – even when their job may not directly impact them – are more engaged and happier.  You may only clean toilets at the company who wants to end world hunger, but at least you work for a good company!

Do they enjoy their work relationships with fellow coworkers? Although I’ve talked with many business owners who make every attempt to quash all workplace socialization in the name of “productivity” it’s important to realize that employees who have positive social relationships are happier and are more productive.  A study by Queens School of Business found that higher employee engagement led to some shocking statistics like 15% greater productivity, 30% better Customer Satisfaction, and 20% less absenteeism.  That’s one of the big reasons why Gallup has “Do you have a best friend at work?” as one of their 12 most important questions to ask.  Puts a whole new spin on “work wife” doesn’t it?

In short, building better Employee Satisfaction is not rocket science, and it can have tremendous positive effects for your business.  If you’ve had problems with improving engagement in the past then it’s possible you’re overthinking it.  Take a look at the review I did of the Gallup workplace study and take a note of the questions.  How many of these can you easily work into your day-to-day operations? It’s important to make sure that any employee reviews include these measures.

If you’re working with a business culture that has long since passed the “needs work” stage and has already entered the TOXIC phase, you might want to consider putting some time into doing some more research.  I recommend rethinking the whole environment using the framework discussed in Change the Culture, Change the Game by Roger Connors and Tom Smith.  They’re the guys who brought you The Oz Principle.  It’s a solid read, but I’ll be honest that it took me a second time through to get it all clear.