How to become the world's best place to work

By Kym McNicholas , written on November 14, 2012

From The News Desk

Great Place To Work Global just announced its list of the “World’s Best Multinational Workplaces 2012,” and the world’s largest private software company, SAS, topped the list. Google came in second, NetApp was third, Kimberly Clark was fourth, and Microsoft rounded out the top five on the list.

To come up with the list, researchers analyzed the most successful companies and measured the trust employees have in their employers, their satisfaction with the workplace, and what managers offer to their employees. What they found as they were putting this list together was a little surprising. It wasn’t the free lunches or nap pods that actually led to greater employee retention. It was the human values within an organization: Trust, credibility, respect, transparency, and camaraderie.

What does that mean?

“Basically, if an employees wakes up in the morning and looks forward to going into the office, that’s a good sign,” exclaims Susan Lucas Conwell, CEO of Great Place To Work Global.

More specifically, employers who have a clear set of core values and a mission statement that every single employee can embrace, who take care of their employees and treat them like they’re important and who value them as if they’re an asset, and who engender a collaborative environment -- their employee loyalty factor will increase, and so will performance.

Obviously that’s the case at the world’s best place to work, SAS. With more than 13,000 employees worldwide, the North Carolina based corporation has an employee turnover rate of 2.6 percent.

Some may look at SAS and say it’s because of the perks. Employees do value the company’s benefits program, the onsite healthcare facility and pharmacy, the on-campus gym, as well as the massage therapist on campus. But that’s not what keeps them coming back day after day.

"We don’t get absorbed in who we are, necessarily,” says SAS Chief Marketing Officer Jim Davis. “It’s more like, ‘Are we taking care of those around us?’”

From day one, people were of the utmost importance to company founder Dr. James Goodnight, which is one of the main reasons why the company is private. “It’s sad that Wall Street doesn’t tolerate the extra investment in people,” exclaims Davis. “It’s actually what led us to have one of our most profitable years on record.”

During the downturn, Dr. Goodnight was concerned about the impact on employees, as well as productivity. Hearing of so many companies going under and friends and family losing their jobs, he wanted to put his employees’ minds at ease. So at the start of 2009, Dr. Goodnight, in an all-hands meeting, told employees he not only would not fire anyone, but that he was willing to take a cut in profit so everyone could focus on simply creating great products. The end result was that employees, on their own, cut down on expenses, and ultimately SAS experienced one of the most profitable years in its history.

Dr. Goodnight’s commitment to his employees is a big reason why SAS is successful and why its turnover rate is much less than the industry average of 22 percent. Fewer management layers are another one of SAS’s secrets to success. On average there are about three different layers at SAS, versus the typical corporation, which has the CEO, its executive team, then the senior directors, the vice presidents, and on and on.

“No one’s better than anyone else at SAS,” explains Davis. “That’s the message this sends.” Davis believes the key to making a minimal management layer structuring work is to hire incredibly self-motivated employees who get excited about new projects and over pursuing new things.

“If you start the process from the very first hire, bringing in the right people, who treat one another with respect, the culture will police itself. Whether a person is not pulling their weight or suddenly can’t play nice with others, the problem individual will be gone,” assures Davis.

Keep in mind, if you can keep employee retention high, and turnover down, you’ll save a lot of money on recruitment costs, as well as time wasted getting new employees up to speed. A study of the SAS culture once done by Jeffrey Pfeffer, Professor at the Graduate School of Business at Stanford University, showed that its efforts in making employees happy actually led to a cost savings of $100 million dollars.

Justin Moore, CEO at Axcient, the seventh fastest growing company in Silicon Valley (Inc. Magazine), talked all about how to create a great culture from day one in a recent interview I did with him at the Founders Showcase in San Francisco. We talk culture about halfway through the interview. It’s worth watching if you’re building a company or trying to build moral in your organization. He’s received several awards for being one of the top places to work in the San Francisco Bay Area.