Impacting Profitability: Don't Overlook The Hidden Benefits Of Empowerment

Organizations can expect obvious results when they implement an empowered environment. However, many people fail to realize the impact of the hidden effects of the empowerment process. These hidden benefits can have a more dramatic impact on profitability than a leader might imagine. When one considers the issue of the effective use of resources, the hidden impact of empowerment clearly demonstrates how leaders can effectively marshal the resources they are responsible for.

Many traditional managers fail to understand and comprehend how empowerment can impact their bottom line, as there are a number of hidden costs associated with restricting employee abilities and capabilities. Most are focused on their power and authority and concentrate on ways to maintain their personal power base.

Leaders, on the other hand, understand that tapping into the human potential of their employees unleashes a tremendous source of power, information, and expertise that the organization can ultimately benefit from.

Most leaders are unaware of the hidden or intangible benefits associated with empowerment. However, the thoughtful leader who takes the time to consider the costs of the traditional approach will find them staggering, which is often sufficient to motivate them to move the empowerment process along as quickly as possible.

The following outlines the great number of benefits that companies can measure beyond the results of increased productivity, efficiency, and effectiveness when implementing an empowered workplace.

Absenteeism

Absenteeism results from employee boredom with their jobs and a feeling that what they do is not valued and does not contribute to the success of the company. In other words, there is no personal connection between the company and the individual employee.

As employee involvement increases through empowerment, most companies experience a noticeable decrease in absenteeism because the individual contribution to the organization is sought, valued, and recognized. Empowered individuals are challenged to their maximum capacity and abilities, resulting in an increase in overall job satisfaction. Consequently, the cost of lost productivity associated with absenteeism is reduced and can be directly attributed to a benefit and positive effect of empowerment.

Employee Turnover

Employee turnover is often due to a lack of value, opportunity, and growth within a company. Employees feel that their only option is to look for a better job. Without job satisfaction, they appraise their work only in terms of what they are being paid.

Since empowerment taps the individual resources each employee can provide and focuses the combined efforts of all employees toward a common goal, job satisfaction increases. As a result, for the first time many employees feel that they are valued, and they come to understand their role in the company's success. They are invited to grow with the company and expand their personal capabilities. They are rewarded and recognized for their personal contributions, which motivates them to do more and continue to grow. The combined result is that it reduces their desire to leave the company, and, in many instances, it increases their motivation to do a good job and remain with the company.

When employee turnover is reduced, the organization saves the funds to search, relocate, and train new employees.

Safety

When employees are involved with the personal management of their tasks and assignments, they are empowered to work within the boundaries that enable them to make their jobs safer and more efficient. Most companies report a reduction in workers' compensation claims and, as a result, see lower insurance premiums. This can provide significant savings. When employees understand the financial impact of these claims, they are motivated and empowered to make the necessary changes to increase safety.

Productivity

Empowerment sparks new ideas and concepts throughout the organization, including ways to reduce waste and increase productivity and efficiency. While these may be small improvements, in the empowered environment they add up to additional profits over time.

Additionally, empowerment improves the relationships among managers, leaders, and employees, which correspondingly reduces complaints and grievances. While these elements are difficult to quantify, the productivity increase attributable to the resolution of these problems positively impacts the performance of the organization.

Lawsuits

Companies that have implemented an empowerment program have experienced a significant reduction in the number of lawsuits from employees and customers. An empowered workforce experiences increased job satisfaction, fosters better relationships with customers and suppliers, and produces a higher quality product or service. All of these factors contribute to a reduction in lawsuits and attorney fees.

Benefits

Benefit claims is an area organizations often overlook when assessing the overall effects and impact of empowerment. While savings will obviously vary depending on the benefit packages provided to employees, most companies report a reduction in medical and other health-related claims as job satisfaction and fulfillment rises.

Reputation

There is a demonstrable relationship between an enlightened workplace and overall performance. Companies that have empowered their employees are more productive, retain more customers, and are more profitable. They are able to withstand economic pressures and competitive demands because of overall employee involvement.

Excerpt: Empowerment: Pinpoint Leadership Skill Development Training Series (Majorium Business Press, 2011) $ 19.95 USD

If you would like to learn more about empowering your workforce, refer to Empowerment: Pinpoint Leadership Skill Development Training Series. This training skill-pack features eight key interrelated concepts, each with their own discussion points and training activity. It is ideal as an informal training tool for coaching or personal development. It can also be used as a handbook and guide for group training discussions. Click here to learn more.