Here’s this month’s piece from neuroeconomist Paul Zak. For those who might dismiss some of our thinking as the “soft side” of management, Paul puts “hard science” behind it.
Gyms. Gourmet food. Laundry service. Some companies have gone well beyond pension, health and dental benefits to attract and keep employees. But does offering goodies produce a measurable return on investment?
Studies by the insurer Unum Group show that when benefits fit what workers want and need, employee satisfaction is high. I’m not surprised. My own research has demonstrated that when companies engage in “strengthening connections to employees,” to use Unum’s words, it can stimulate the brain’s release of the connection and engagement molecule, oxytocin.
The payoff is potentially big. Oxytocin is a potent anti-anxiety agent, so providing benefits that demonstrate to employees that they are cared about may also reduce chronic stress and, in turn, healthcare costs.
One of the most exciting findings in neuroscience in the last decade is that as adults we produce new brain cells. Scientists have discovered that this adult “neurogenesis” occurs when people are placed in a stimulating environment, as well as through exercise. Work, if it’s appropriately challenging, can provide brain-building stimulation. But exercise has long been ignored, or even viewed as anti-productive, by many companies. That’s a mistake. Offering opportunities for employees to exercise on a regular basis, whether at the gym or through a company sports team, isn’t a no-brainer; it’s a pro-brainer.
So, which benefits should your company make available besides a chance to work out?
Providing nutritious meals and snacks not only promotes a healthy lifestyle but also saves the time needed to go out. Just as importantly, supplying good food also demonstrates care for employees’ needs at the most fundamental level—and that’s sure to get their oxytocin flowing.
There are also more subtle ways to empower employees through benefits. For example, rather than issue a standard company computer, buy each employee what he or she prefers—whether PC or Mac—complete with an oversized monitor. Computers are fully depreciate in three years, and if the employee leaves before that time, the company may lose a little physical capital, but the gain in social capital will more than compensate. If the employee is traveling extensively, let him or her pick out a phone that the company pays for.
The key is to form a partnership with employees where they are in charge of how they work. Beyond that, leaders should provide support so that their workers can be fully developed human beings, not simply more efficient FTEs.
How about going one step further? Let’s get rid of the “human resources department” and replace it with a “human development department.” Then, of course, you’ve got to follow through on this promise.
Peter Drucker noted that “man, alone among all the resources available . . . can grow and develop.” Taking human development seriously, and providing the right kinds of perks, is likely to boost your ROI.
Paul Zak is the director of the Center for Neuroeconomics Studies at Claremont Graduate University.