In an article published in 2013 by USA Today, writer John Waggoner discusses the theory of treating employees better to earn a higher profit in the long-run. He starts off by stating that most people assume there to be an “economic karma”; good employee treatment leads to higher earnings, stock-prices, etc. However, upon analyzing the article, I realized that the idea behind being a benevolent employer can be summed up in three words: low turnover rate.

What most companies fail to do is maintain a firm employee base, which is especially noticeable in companies well-known for poor employee benefits. For instance, typical retail stores tend to have high turnover rates due to minimal training, unsatisfactory policies, and, most importantly no incentives other than for employers. No one wants to work overtime  to reward someone else, which is strikingly similar to what happens in retail businesses.

I believe that in order for employers to achieve desired goals without having to replace employees, who are costly to train, they must put a certain amount of money aside to benefit workers. Medical insurance, higher wages, and job enjoyment are all factors that should be considered when trying to satisfy employees and earn higher profits.

Images and References:

http://www.usatoday.com/story/money/personalfinance/2013/02/19/treating-employees-well-stock-price/1839887/

http://www.retaildoc.com/blog/8-reasons-why-your-retail-employee-turnover-is-so-high