10 Best Companies Reveal Secrets to Success
New Survey from Harvard Business Review Analytic Services uncovers common themes and unexpected results
May 9, 2012 (Des Moines, Iowa) – Successful companies’ unwavering commitment to their employees’ long-term financial well-being leads to a competitive advantage according to new survey from Harvard Business Review Analytic Services sponsored by the Principal Financial Group®. Companies studied show increased employee engagement, stronger customer relationships and deeper organizational expertise.
Luke Vandermillen, vice president of retirement and investor services for The Principal, introduces the report, "Commitment to the Future: 10 Years of The Principal 10 Best Companies" and identifies key trends from the research.
Amid the challenges of a decade that began with 9/11 and closed with the economic recession, companies surveyed maintained or increased their employee benefits. Most of them increased retirement contributions over the previous decade.
These companies’ approach to employee financial security is the basis of a new white paper, Commitment to the Future: 10 Years of The Principal 10 Best Companies from Harvard Business Review Analytic Services. The study sought to uncover what has made the winners of The Principal 10 Best Companies for Employee Financial Security stand out among their peers over the tumultuous decade and what can be learned from these companies for the decade ahead.
For the past 10 years, The Principal 10 Best Companies program has honored growing organizations for their commitment to employee financial security. Despite the economic uncertainty, 98 of these 100 companies remain in business today. The companies included publicly owned and privately held organizations, service businesses and manufacturers ranging in size from 15 to nearly 1,000.
“The Principal 10 Best winners continue to set the standard for improving employee financial security; they realize an investment in their employees constitutes an investment in their own future well-being,” said Luke Vandermillen, vice president at the Principal Financial Group. “The paper delivers more than best practices; it offers a way of thinking about employees and benefits that has consistently shown value time and again, even in some unexpected places like workplace safety.”
Benefits pay dividends
The majority of companies interviewed say investments in employees save the company money in the long-run. Three-quarters said employee benefits programs had a significant impact on retention and recruitment. Retention translates to lower turnover costs, and 10 Best winners have, on average, voluntary turnover rates less than half of industry averages. But, according to the companies, exemplary benefit programs also lead to stronger employee morale, greater competitive advantage and near spotless safety records.
For example, Placid Refining Company, a Dallas-based oil and gas discovery business that manufactures products at extremely high temperatures, reported that they have had no serious on-the-job injuries due to retaining skilled employees who have worked for the company for many years.
“As one HR director puts it, you can’t have customer satisfaction without employee satisfaction. A good benefits program’s connection to employee security, motivation and performance couldn’t be more clear,” said Angelia Herrin, research and special projects editor of Harvard Business Review.
A look toward the decade ahead
Respondents say the biggest issue on the horizon is managing benefits costs coupled with growing concern over health care reform. Harvard Business Review Analytic Services identified several key trends emerging for the future including:
- Rising health care costs were noted as a universal concern, but a large majority of companies surveyed have added wellness programs as one way to help control those costs and improve employees’ lives.
- Financial professionals can be invaluable to help sift through options and identify opportunities to maximize benefit value. A significant majority of the companies provide their employees with one-on-one access to financial professionals.
- Virtually all respondents reported placing a great deal of emphasis on communication including the value of benefits with employees. As Karen Rhodes, director for Texarkana, Texas-based Red River Credit Union put it, “a benefit not understood is not appreciated.”
Learn more about The Principal 10 Best Companies for Employee Financial Security and see the full report at www.principal.com/10bestresearch. For more news and insights from The Principal, connect with us on Twitter at http://twitter.com/ThePrincipal.
About Harvard Business Review Analytic Services
Harvard Business Review Analytic Services is an independent sponsored research unit within Harvard Business Review Group, which conducts research and comparative analysis on management challenges and emerging business opportunities. HBR Analytic Services has been recognized for its “Face-to-Face” research report, sponsored by British Airways, as a finalist in the 2010 M&M Awards in the category of “Best Contribution to a Media Campaign by a Media Owner.” Research from Harvard Business Review Analytic Services has appeared in The New York Times, Economist.com, USA Today, the Times of London, and other major media.
About Harvard Business Review
Harvard Business Review is the leading destination for smart management thinking. Through its flagship magazine, 10 translated licensed editions, books from Harvard Business Review Press, and digital content and tools published on www.hbr.org, Harvard Business Review provides professionals the world over with rigorous insights and best practices to lead themselves and their organizations more effectively and to make a positive impact in a changing world.
About the Principal Financial Group
The Principal Financial Group® (The Principal ®) is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $364.1 billion in assets under management and serves some 17.3 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
Harvard Business Review is not an affiliate of any company of the Principal Financial Group.
- “The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
- As of March 31, 2012.
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