Q4 is always known as the reckoning quarter. Performances are gauged and budgets are finalised during the most wonderful time of the year. Now, it’s often the case that when companies want to tighten the spending for the next year, it’s the spending towards the people that get cut first.

Internal celebrations are scrapped, coffee bean spending is reviewed, health insurance changed, and raises cancelled or curtailed in such creative ways as to bring puzzlement instead of appreciation.

But Dev Team would like to challenge this approach. We’re talking beyond making your employees happy by spending on them, what if this can also make you money?

Spend Some to Make Some

If you trace how you generate profit, it will always lead back to your employees. That could be finishing projects, taking new products to market, completing deliverables, etc.

Now let’s look at two scenarios:

1. You don’t have top talent. The people you do have take every opportunity to not show up for work, and after a few months, they leave. Your hiring department is the only part of your company operating smoothly. (And that’s because they have so much practice in onboarding and onboarding people due to high turnover.)

Your Glassdoor score? Let’s not even look at that.

2. You retain people, they like working here and are excited in being kept on, they stay for years and years and gain mastery in the field. While you’re retaining, you’re also attracting top talent in the industry because of good word of mouth. Your people feel secure in taking risks and being creative. Your company innovates.

Using these two examples, it’s obvious that the second one would produce better work, (and in turn, more money) just from a logical point of view. Less absenteeism means less delays. Lower turnover means less delays again, and having people excited to work means you’re getting their best effort. 

Is this really a big deal?

Absolutely. Admittedly, we’re using refreshments and office socials to mean all the spending you’re doing for your employees. That could be a comfortable (even beautiful) working environment, adequate staffing, work events that they can be proud of, and meaningful raises they can aim for.

Ultimately, people want to be compensated for their efforts, and deep down, they know how much that is, whether they say it out loud or not. When that is not met, they feel unappreciated and resentment begins to set in. 

No amount of leadership talk or fancy consultants can make an employee that feels unappreciated excited to work. 

How is this related to profit?

Employees noticing how little the company is spending on them can hurt your bottom line in multiple ways.

First, like mentioned before, increased turnover and absenteeism would delay the completion of projects, there you can calculate how much that would be worth to you. 

“It is estimated that to replace a salaried employee it can cost, on average, between 6-9 months’ salary. This covers recruitment costs, training expenses relating to the new employee, and salary.”

CentricHR

Next, losing (or never even attracting in the first place) top talent would mean your company will always underperform in your industry. When you’re known to be below par, you’ll struggle to win major clients, control your terms, and maintain competitive pricing. Instead, you will be caught in a race to the bottom.

Finally, achieving good results will ultimately cost you more. High turnover drives up hiring and onboarding expenses, and the employees you do retain are less motivated. By the time a project is done, it’s costlier and less efficient than it would have been in a supportive environment.

So About that 2025 Budget…

If you still can, we suggest increasing your employee happiness allocations for 2025. We know first hand the difference it makes when everyone feels appreciated.

Remember, when you choose to invest in your people, you’re also investing in your company’s profitability.