Do happy employees perform better? Insights from the retail sector
In my journey to understand whether happy employees indeed perform better, I set out to explore this notion from the ground level—from the trenches of retail, where the day-to-day realities unfold.
The academic research supports the idea, but how does it translate into the real world of retail? How can businesses get it right? This quest led me to speak with several remarkable individuals who shared their insights and experiences, shedding light on the true impact of employee engagement on business success.
Engaged employees equal happy customers: The retail perspective
Thanks to our contributors, whose insights have shaped this commentary:
- Eddie Hartley, Community Lead for the LGBTQ+ Network, Sue Ryder
- Bluebell Valentine, Volunteering Manager& Co-chair LGBTQ+ Network, Sue Ryder
- Chris Shearer-Wright, Senior Equity, Diversity, & Inclusion Manager, Oliver Bonas
- Giles Smith, Advisory Board Member at Mach (Selfridges & Burberry Alumni)
- Gareth Whalley, Founder of Big Bang People Solutions
The link between employee engagement and customer outcomes
One of our interviewees, Giles, eloquently summarised the importance of being people-focused: “Being people-focused means prioritising the well-being, growth, and engagement of my team. Day-to-day, this involves open communication, actively listening to feedback, and ensuring that everyone feels heard and valued. It’s about creating a supportive environment where team members can thrive and achieve their personal and professional goals.”
This approach is crucial for customer satisfaction. When employees feel engaged and valued, they are more likely to go the extra mile for customers. Engaged employees are more productive, innovative, and committed to their work, which directly impacts the customer experience.
… and the research supports the connection
Research consistently backs the link between engaged employees and improved customer outcomes. According to a Gallup study:
- Highly engaged employees contribute to a 41% reduction in absenteeism and a 17% increase in productivity.
- Engaged businesses see a 10% increase in customer ratings and a 20% increase in sales.
An IDC survey on employee experience revealed that 85% of respondents agreed that an improved employee experience and higher employee engagement lead to better customer experiences and higher customer satisfaction.
When employees are comfortable and engaged, they are more likely to provide superior customer service, leading to increased customer loyalty and satisfaction.
Gallup’s research further emphasises that motivated employees are not only more productive but also more loyal to their company. Happy workers are more likely to recommend their company’s products and use them in their daily lives, thereby boosting profits. Engaged employees are also 23 times more likely to recommend their organisation as a great place to work, enhancing employer branding and attracting top talent.
The role of DE&I in enhancing employee engagement
Inclusive workplaces lead to higher employee retention rates. When employees feel valued and included, they are more likely to stay with the company long-term. A committed and happy workforce enhances the company’s reputation and yes, play a true part in building customer loyalty.
The benefits of deepening and nurturing employee engagement through DE&I are clear. Giles’s experience highlights the direct impact on business performance: “By aligning their roles with their skills and interests, providing them with the necessary resources and support, and creating a safe space for innovation and risk-taking, I help them unlock their full potential.” This approach leads to higher productivity and better customer service.
At Sue Ryder, Eddie emphasises the importance of maintaining a family-like atmosphere while implementing DEI initiatives: “In every single one of our stores, (just over 400), we have a very dedicated team of volunteers. It’s almost like personal families. You create a bond with the manager and team members. We aim to keep this family feel while making our initiatives inclusive and vibrant.”
Eddie shared, “The feedback from our Pride initiatives and the tangible benefits of our rainbow badge program show how these efforts improve both staff morale and customer relations.”
Long-term impact is another significant benefit. Gareth remarked, “Creating great employee experiences, especially for retail staff, is about more than benefits and hours. It’s about connecting them to the company’s culture and values, ensuring they feel included and recognised.”
The role of psychological safety
Providing psychological safety is crucial for building an environment where employees feel comfortable sharing their opinions and feedback. Gareth underscores the importance of psychological safety, explaining that employees need to feel safe to take risks, be themselves, and challenge the status quo. This environment of trust and openness leads to greater innovation and better decision-making.
Gareth states, “A shared belief that a team is safe for interpersonal risk-taking is essential. If employees don’t feel safe, they won’t take the necessary risks that lead to growth and improvement.” This highlights the need for creating a supportive environment where employees can express themselves freely and contribute their best ideas.
Strategies for engaging disparate teams
In retail, most workers are out on shop floors, in warehouses, or studios, not behind computers in head office. They work shifts with different line managers, making traditional methods of team building and communication complex. The vision and mission must be so clear that it translates effectively across all levels and locations. Engaging employees requires both thoughtfulness and tailored strategies.
Sue Ryder’s approach is a prime example. Eddie explained, “We cascade information through managers, ensuring that both customer-facing and back-office staff are well-informed. For Pride, for instance, we put significant effort into creating inclusive displays and activities that maintain our family atmosphere.”
Volunteer inclusion is another key aspect. Bluebell added, “We have about 10,000 volunteers, which is quite different from other businesses. We’ve focused heavily on DE&I for our workforce and volunteers, ensuring everyone feels included and valued through initiatives like our Inclusion Passport.”
Gareth further noted the importance of technology and leadership in retail: “Retail staff need engagement methods tailored to their environment. Using tech platforms that integrate with daily tools and leveraging store managers to communicate and reinforce DEI messages is essential.”
Strategies for enhancing employee engagement
- Training and development: Continuous development through regular training sessions, mentorship programs, and opportunities for employees to take on new challenges and responsibilities helps unlock their full potential. Giles emphasises, “By understanding each team member’s strengths and career aspirations, and providing them with the necessary resources and support, you unlock their full potential.”
- Feedback and adaptation: Gathering feedback from all employee groups and adapting policies accordingly is vital. Bluebell highlighted the importance of making DE&I work accessible, “We take multiple approaches to ensure everyone can engage, regardless of their tech access or language skills.”
- Recognition and feedback: Regular feedback and recognition are key components of a successful engagement strategy. Celebrating successes and learning from failures together creates a supportive and collaborative work environment. “Gratitude and mentorship have been pivotal in my career,” says Giles. “Expressing gratitude helps build strong, supportive relationships throughout my career.”
- Inclusive policies: Chris highlights the importance of inclusive policies. By implementing comprehensive policies like Religion and Belief at Work, Transition at Work, Menopause at Work, and Disability at Work, companies ensure that all employees feel valued and supported. “Our commitment to change is illustrated by our strategic pillars, including research and innovation, accountability, measuring and evaluating change, advocacy, and making and maintaining meaningful partnerships,” says Chris.
Effective policy implementation
Policies are essential to ensure that initiatives are not just well-intentioned but also well-executed. They provide a framework that guides behaviour and decision-making within an organisation, ensuring consistency and fairness. Policies are the backbone of creating an inclusive and supportive work environment, linking back to the overall theme of prioritising employee engagement and inclusion.
Effective communication and training are critical for policy implementation. At Oliver Bonas, Chris has spearheaded the creation of comprehensive and inclusive policies. “Our Equity, Diversity, and Inclusion team has been instrumental in creating informative resources, engaging workshops, and innovative initiatives that ensure our teams feel a sense of belonging at work and have an increased awareness of how important EDI is to us as a business.”
Chris emphasised the shift from equality to equity: “Since making EDI a core focus for us since 2020, our approach has shifted from equality to equity, diversity, and inclusion. We acknowledge that each person has different circumstances, and we should be allocating whatever resource and opportunity they need, tailored to them, to reach the same outcome as their peers.”
Oliver Bonas has introduced new policies such as Religion and Belief at Work, Transition at Work, Menopause at Work, and Disability at Work. These policies are designed to be explicitly inclusive and address the unique needs of diverse employees. “We wanted to ensure that everyone, regardless of their faith, gender, sexual orientation, or capability, was represented and covered,” Chris noted.
Conclusion
The relationship between employee engagement and customer satisfaction is clear and compelling. Prioritising DE&I not only creates a workplace where employees feel valued, supported, and motivated, but it also leads to tangible improvements in customer experience and business performance.
The insights shared by Eddie, Bluebell, Chris, Giles, and Gareth highlight that when companies invest in creating inclusive environments and support their employees’ growth and well-being, they unlock higher productivity, innovation, and loyalty.
As businesses continue to navigate the complexities of the modern world, it’s crucial to remember the human element at the heart of success. Effective initiatives, strong policies, and strategies tailored to engage employees at all levels can transform workplaces and drive better outcomes. The evidence is overwhelming: engaged and happy employees lead to satisfied customers and thriving businesses.
Incorporating these practices isn’t just a trend or a tick-box exercise; it’s a strategic imperative for sustainable success. By embracing these principles, companies can create a culture of excellence that benefits everyone—from employees to customers to stakeholders.
For more detailed insights into the research references, please refer to the below reports:
