On August 4 I told you about our new feature for email subscribers, a weekly people practices email geared toward improving your company's bottom line.  Tom Walter, CEO of our 2010 Top Small Company Workplace Tasty Catering, commented on that post saying it's a great idea.

This week he shared specifics with me on exactly why he thinks business leaders should sign up for this free email (emphasis mine):

The Weekly Bottom Line-Improving People Practice email should benefit all business leaders.  The world has become commoditized.  The true marketplace differentiator is human capital.  I enjoy learning the Best Practices other companies use with their most valuable asset - their people.

An engaged workforce is typically harmonious, productive and profitable.  These Best Practices eliminate the need to manage.  We have replaced management with effective leaders armed with Best Practices, and the difference has been remarkable.

While Winning Workplaces surely plays only a small part in Tasty Catering's success, you can't argue that they're not doing a lot of things right in their staff engagement that comprises their highly productive workplace culture: As we shared in the company's award profile, in a very tough year broadly and certainly in their industry (2009), their employee leadership development and other strategies helped them earn above-average revenues.

Register now to start getting our weekly, bottom line-improving people practices email FREE in your inbox.

Longtime readers will recall that I wrote the following in June:

Trust building activities may register high on the radar screens of the organizations Winning Workplaces [has honored], but on the whole among the roughly 27 million small businesses across the U.S., they do not.  These and other human capital strategies are considered by many leaders to be "soft," and therefore, in a down economy, not worth leadership's time and energy compared with other areas of the business.

Maybe the results of Deloitte's latest Ethics & Workplace Survey will change some minds regarding the ROI of building trust in the workplace.  Surveying more than 700 employed Americans in April, Deloitte found that close to half have lost trust in their employer since the start of the recession; this has propelled more than a third of respondents to look for a new job as the economy picks up.

Certainly, some leaders are hip to and worried about these trends; those who run our Top Small Company Workplaces are among them.  As Management-Issues notes today, the same survey from Deloitte found that

Two-thirds of Fortune 1000 executives who are concerned employees will be job hunting in the coming months acknowledge that trust will be a factor in any increase in voluntary turnover....

The results of this survey make me wonder how much lower the percentage of employees looking to bolt would be if more companies had tried to share the pain in the midst of the worst of this recession, instead of pulling the layoff trigger first.  I also wonder – and maybe future studies will put some quantifiable data behind this – how much more revenue small and other businesses that did not view worker trust as a priority during the apex of the crisis might have right now.  The answer to this question has larger implications, including on our current GDP level and jobless rate.

Related: In April I profiled six small businesses in our network that turned to employee furloughs and pay cuts instead of layoffs to weather tough times, and came out stronger for their decision.  Read their stories here.

Last July, when Amazon.com was on the verge of acquiring Zappos.com, I questioned if the move would lead to the demise of the unique – and uniquely powerful in terms of buzz and sales – productive workplace culture Tony Hsieh built within his retail business.

A year later, I'm happy to note that just the opposite seems to be true.  Hsieh has remained in place as CEO and, more importantly from an employee engagement perspective, he's become even more visible as a "chief culture officer": I was one of many bloggers and reporters to pick up on his New York Times Q&A in January in which he shared the benefits of attracting and retaining offbeat workers.  Last month, Hsieh went even further in sharing his workplace culture beliefs, practices, and successes with the release of his book Delivering Happiness.

Through it all, Zappos continues to wow customers with its incredible service, helping to maintain sales in a tough economy.  What's more, the company serves as a beacon of hope to job seekers and a vital source of tax revenues in hard hit Las Vegas.

Honest Tea, a finalist for our 2010 Top Small Company Workplaces award, appears to be following in Zappos' footsteps.

After seeing this post last week on the Triple Pundit blog, which spells out the dilemma for the 12-year-old, Maryland-based organic tea bottler – staying true to its "no high-fructose corn syrup" label, and thus its customer base, with a Coca-Cola minority stake that's set to become more significant next year – I decided to dig into Honest Tea's application for our award for clues to their next moves.

Here's how they answered our question on their key long-term strategic goals for the organization and the workplace (my emphasis is in bold):

A critical strategic goal is to maintain our mission-driven, entrepreneurial culture as we grow alongside the world's largest beverage company, and to mentor other mission-driven companies.  We will continue our tradition of including all employees on crew drives, a vital way of instilling the Honest Tea culture.  Rapid expansion in 2010 will demand participation from everyone in the company.  Crew drives enable employees from every department to experience selling and marketing our beverages and directly invests them in our business fundamentals.  Another key goal is to maintain and build our position as a leading, innovative organic beverage company.  In 2010 we introduce Honest Kombucha, a unique, sparkling tea beverage based on live, organic cultures.  Even as we grow nationally, we are determined to sustain our role as a leader in the local community.  Honest Tea is a founding sponsor of a local environmental non-profit, Bethesda Green, supporting a healthy economy and sustainable living.  The company's visibility in the community is a source of pride for our employees and a key part of our identity.  Finally, the company's commitment to transparency, the accessibility of our President and TeaEO and the rest of the management team, are important ways in which Honest Tea will continue to be steeped in its entrepreneurial, mission-driven culture.

Like Zappos, Honest Tea is placing a premium on maintaining its human capital strategies and core values that have contributed to its massive success while it negotiates with a much larger company that has a sizable interest in it.

Related: For more on how Honest Tea's employee development strategies led it to become an industry leader, read our award profile on the firm.

Scott Shane, Professor of Entrepreneurial Studies at Case Western Reserve University, has an illuminating post on Small Business Trends this week in which, based on U.S. Census data of 6-year-old businesses, he shows that the typical (or median) entrepreneur's sales are below the average (or mean) sales in 9 sectors.  Shane writes that this distinction is important for entrepreneurs as well as investors and policy makers because

if average sales are high, while typical sales are zero, then a few entrepreneurs are very successful, but most are not.  Unfortunately, this is the pattern that we tend to see.

I want to take the opportunity to focus on the better numbers – the mean, or average, sales – that are more often used, and represent the "best case scenario."  I wanted to compare this data to our own, employee engagement research on similar small firms: the applicants for our 2010 Top Small Company Workplaces award.

Because Shane looks at 6-year-old businesses, I similarly pulled out only those applicants that were founded in 2004, and were 6 years old when they applied for our award this year.  Also, to compare apples to apples when it comes to sector, I pulled out only the industries we recorded for those applicants founded in 2004 that match up with Shane's table: Manufacturing; Transportation, Communication, Utilities; and Finance, Insurance, Real Estate.

The table below shows what I found:

The multiples of mean sales of our award applicants vs. the similar-age firms measured by the Census range from roughly 9 times (Manufacturing) to 34 times (Finance, Insurance, Real Estate).  When you average the three sectors together, our applicants report 19 times the mean sales of the companies represented in the Census data.

The big difference between the two groups of companies?  Our applicants use smart human capital strategies to drive everything from internal processes and metrics to external performance.

Related: For more evidence of the payoff of employee engagement, read this post which shows how some of this year's award winners compare to their industry when it comes to turnover.

For a special project we have been doing some additional employee engagement research into one of our 2008 Top Small Workplaces, California-based, leading organic rice farming operation Lundberg Family Farms.

One of the things that stood out to me as part of this effort is how much value, or ROI, the small business gets from its investment in health and wellness initiatives.  Since its business is healthful food, and its employees join its customers in caring about this, it makes sense.  Still, the company goes above and beyond the norm when it comes to wellness – and it can justify its involvement here.

Lundberg employs an on-site Wellness Coordinator who partners with outside agencies to initiate a host of organizational wellness activities including:

1. Sponsoring various charitable, physically challenging contests and company sports teams.
2. Encouraging walking during breaks and throughout the work day.
3. Hiring a trainer to teach all employees proper stretching routines.
4. Providing vending machines onsite so employees can access healthful food and beverages.
5. Offering daily distribution of free fruits and vegetables to its employees.
6. Providing reduced memberships to local fitness centers.
7. Adopting an Injury & Illness Prevention Plan and providing regular trainings and weekly meetings on safety-related topics.
8. Administering free flu shots and blood pressure screenings to all employees.
9. Developing an on-site employee garden to grow vegetables.

The results Lundberg has seen from this truly reflect Winning Workplaces' tagline emphasizing human capital strategies that are "better for people and better for business":

• In 2010, 95% of the workforce underwent a first-time Health Risk Assessment conducted by an outside insurance company.  Participating employees received a discount in their insurance costs. 
• As a result of the health and wellness activities, several employees have reduced their blood pressure, cholesterol and glucose levels.  Many more have made significant lifestyle changes by losing weight, exercising regularly, growing their own vegetables at home and eating healthier meals.
• Both of these employee results keep Lundberg poised for growth through lower turnover/higher average employee tenure, discounted health insurance premiums, and healthier employees who experience less overall stress and are more productive.

Related: Read our Q&A on achieving workplace wellness with stress management therapist Beth Moses.

Image credit: US Scouting Service Project

The business justification for employee engagement focused on their continued, on-the-job learning is easy to understand.  It's a win for employees who increase their skills and become more marketable in their careers; and the company wins because their talent has a greater ability to perform at top levels and to innovate, and it's less of a risk and more of an opportunity to promote from within (saving money on recruiting from outside).

Yet, there are myriad options when it comes to educational employee development strategies.  Where should a small business start?  Maybe a more important question is: Considering each investment in this economy needs to generate several times its amount back in returns, what learning initiatives are most effective for small firms?

Luckily, Winning Workplaces has some real-world answers to these questions to share with you to help you decide how to invest when it comes to this important area of human capital strategies.  Our 2010 Top Small Company Workplaces award application asked applicant companies to give an example of a learning initiative they found to be particularly effective.  Here's how our 20 winners this year responded:

1. A Yard & A Half Landscaping: We spend the equivalent of 1-2 weeks per year offering paid training days for field employees.  Because of the democratic educational setting, by the end of the day, people were helping each other across work crews, and on two occasions, younger employees stepped in to coach crew leaders on machinery that was still unfamiliar to them.
2. All4: For our staff that are in the beginning of their careers and are developing their core consulting and technical skills, we have developed a skills matrix which allows them to know exactly what metrics must be met in order to be promoted to the next position. 
3. Alternative Solutions HomeCare: One interesting program ASH put into place in 2009 was the Dream Manager Program.  Tackling head-on the growing problem of employee disengagement, the program explores the dynamic collaboration that is unleashed when people work together to achieve company objectives and personal dreams.  We had so much positive reaction to this program that we will be continuing it in 2010.
4. Biomark: A couple of years ago we did a several-day team building training.  The effect is that when we employ an idea or theory from this training in our everyday work environment, everyone knows what we are trying to accomplish and is engaged in the process.  This has paid dividends in workplace happiness, turnover, and job performance.
5. Chroma Technology Corp: A few years ago Chroma underwent a full company Lean Manufacturing initiative.  Every employee attended a 2-day workshop and seminar about the fundamentals of Lean Manufacturing.  In addition, 25% of the company was directly involved in two different Lean Mapping and Value Stream courses and projects.  This resulted in $1 million material savings in the first year.
6. Daphne Utilities: We include a large number of our employees in public events involving interaction with our customers.  Here, they work side by side with upper management in events like street festivals and charity fundraisers.  This helps them hear the message being put out from the highest levels, allows top management to get to know each employee a little better, and helps to motivate our workers to take public pride in their work and their company.
7. Dealer.com: We launched uFuel in 2009, a customized online learning management system that was implemented over a 14-month period.  uFuel contains interactive simulations, measures success and knowledge gaps, and creates training programs for areas of improvement.  This learning initiative has been extremely effective at keeping all employees at the leading edge of online marketing best practices and ensuring consistent service for clients.
8. Dixon Schwabl: Our employee development includes an initiative launched by our CEO in 1998 to enhance overall employee communications and allow employees to appreciate each other's differences.  Based on Myers Briggs indicators, it helps frame leadership development, coaching, internal training opportunities, and cross-training.
9. Ginger Bay Salon & Spa: Beginning in 2008 and throughout 2009, we spent significant time with our leadership team opening our books and helping employees understand our financial statements and review our financial performance.  We believe that Open Book Management is likely the main reason that we were able to post results that were not only stronger than our competition, but reflect growth in all areas of our business.
10. MAYA Design: Teaching – many of our employees teach at local universities and we find that allowing this as a paid benefit helps employees learn more about their jobs, how to manage and work with others, and better communication skills.
11. NY Jets: In 2008, the Jets embarked on a first of its kind management development initiative entitled "Take It or Lead It".  Both Business and Football managers partcipated in the sessions.  When this program started, the Jets were in the planning stages of our relocation from Long Island to New Jersey.  HR was able to add in a special section on managing change that prepared mangers for the huge changes employees faced with our relocation.
12. Optimax Systems: The implementation of Job Instruction Training which ensures direction provided from internal trainers is consistent and measurable for effectiveness.  This has allowed us to make sure that people "get it" when instructed on a specific task.
13. Patagonia: Our Employee Development Program temporarily assigns employees to other positions in circumstances where an employee may be out on an extended leave (e.g., maternity leave, an environmental internship, etc.).  Employees participating in this program attain new job skills, have the opportunity to meet more people in the Patagonia community at a new location, and significantly ease the transition back to work for the employee they've replaced.
14. PortionPac Chemical Corp: For 22 years we have held a "Front to Back Day".  Management, office and sales staff spend the day working in the factory.  The "Front" staff gains an appreciation for the skills, talent and physical work that go into making PortionPac, while the factory staff are able to showcase their accomplishments and the attention to detail that goes into making each Pac perfect.  The event fosters communication and suggestions that go back and forth as to how our products can be made better and how the "Front" staff can make life easier for the "Back".
15. Red Door Interactive: We believe that promoting opportunity to change your role at Red Door has prevented talented employees from leaving the company to pursue interests and additional responsibility elsewhere.  Emergent practice areas such as social media and search marketing now comprise over 30% of our total service revenue, and those practice areas are led by people who identified new opportunities and invested in becoming experts by playing to their strengths.
16. Return Path: Most recently our CEO developed and delivered an "Effective Presentations" course.  Content is broken down into small, easily absorbed chunks and reinforced to create a solid foundation that is common for all new hires.  This builds not only a shared vocabulary in our unique business, it builds a shared context.
17. Tarlton Corporation: Our most innovative training program is called Increasing Human Effectives (IHE).  The philosophy behind this training is to help our employees grow personally through this process, which will allow growth professionally.  If they believe in themselves, anything is possible!  Happy employees are productive employees.
18. Tasty Catering: We have 11 advisors/consultants that work with our teams.  Advisors are in the following areas: Banker, Financial, CPA, HR, PR, Marketing, Legal (one for the company and one for the shareholders), IT, Culinary, Dietician and Sales.  The staff benefits by receiving advice from a recognized expert in the field who has larger and smaller clients.
19. The Sky Factory: To further our understanding and experience of the creative process as it applies to our daily work and to the building of the company, we prepared an all-company course with an art historian.  After viewing hundreds of art images and engaging in extensive dialogue it became evident that the process of building a company can (and should) be the same as that of creating a beautiful and lasting work of art.  This notion became practical when a designer aptly observed the skill of a production worker's multiple LED solders.  The fine quality of his work was especially significant because of a recent multi-million dollar fire caused by sloppy work from a competitor's LED system.
20. Van Meter Industrial: One effective learning initiative in our organization is our Foundations training program.  New employees attend this day-and-a-half course near their 90-day milestone anniversary with our company.  Feedback from employees has shown this is fun, interactive, and important training that provides a true insight to our culture, gives the basis for understanding what is important to our company, and sets the tone for who we are and what we represent.

Related: Dive even further into learning activities that will benefit your workplace culture, and your bottom line, by reading our Success Story on ShoreBank.

Image credit: Wikimedia Commons

In March 2009 I referenced Stan Lee's quote from Spider-Man – With great power comes great responsibility – in warning small business owners not to take advantage of employees' willingness to do more in a tough jobs environment.  (Although, as I wrote about last week, in the year since then the hiring picture has improved somewhat, leading some workers – especially top performers – to be more willing to leave if they see this dynamic at play.)

Yet, this new article on Management-Issues by Mitch McCrimmon makes me think Lee's quote should be reversed when the discussion shifts from the perspective of employees, to leaders and managers and how they keep employees engaged and empowered to put forth their best effort.  In prefacing three techniques to help managers engage their people more effectively, McCrimmon says, "Delegate more - not just more work, but greater responsibility."

Giving workers down to the lowest levels more authority and autonomy to better serve customers, and thus the company, is something Winning Workplaces' small business award honorees over the past eight years not only do, but are highly intentional about.  For proof, check out these Success Stories we've written on some of them:

• Alaska Wildland Adventures
• Pro Motion, Inc
• Red Peg Marketing
• Stellar Solutions, Inc.

So, with respect to Mr. Lee, I submit that when it comes to the ROI of your human capital strategies, "With great responsibility comes great power."

Related: One of our most popular, related webinars is this one on growing leaders from within, featuring CEOs from thriving small firms in two diverse industries.

Photo credit: Blog@Newsarama

Trust building activities may register high on the radar screens of the organizations Winning Workplaces named as 2010 Top Small Company Workplaces in the latest issue of Inc. Magazine, but on the whole among the roughly 27 million small businesses across the U.S., they do not.  These and other human capital strategies are considered by many leaders to be "soft," and therefore, in a down economy, not worth leadership's time and energy compared with other areas of the business.

But as Greg Harris noted on The Science of Work blog yesterday, and as I subsequently tweeted about, Harvard Business Review – long a barometer on where business is and where it's headed – has seemed to focus of late even more on the "fundamentals" of people management.  This means employee engagement strategies to build a more productive workplace culture.

Harris mentioned the May HBR headline "How to Keep Your Star Talent."  Is it a coincidence that this month the AP reported on employment data which show that more employees are jumping ship as the economy improves?

I think not.  Yes, we always see the cycle that in tough economic times, employers don't have to worry as much about retention because people are thankful to have a job, and that in better times they need to pay more attention to it because workers sense a job-seeking advantage and are more apt to leave.  But we are coming out of the Worst Recession Since the Great Depression® – a time when many employers' first reaction was to let go of staff and ask for a great deal of concessions from their remaining workforces.

It's no wonder, then, that employees, feeling beaten down in many cases, are looking for the exits.  This is especially true of top performers, who have a good understanding from their latest performance reviews that they're a strong commodity.

What can keep these folks from leaving?  At a base level, a work environment of trust, respect, and fairness – qualities we point to as one of six building blocks of a winning workplace.

It will be interesting to see how many more leaders and managers put activities designed to maximize trust, such as investment in employee leadership development, at the top of their to-do lists.  And by doing so, moving people practices from the "soft measures" to the "hard measures" column to maintain their competitive advantage.

Your thoughts?

Some of the most (and most vociferous) comments I've seen related to the announcement of our 2010 Top Small Company Workplaces last week in the June issue of Inc. Magazine – firms whose human capital strategies contribute to their revenue growth and profitability – appear in response to this post by Manish Mehta on The Jets Stream blog, on NYDailyNews.com.

There are 87 comments to Mehta's post on the NY Jets as of this writing.  Here's what Bob from garfield had to say:

Evidently, no one at Inc. is a Jet season ticket holder.  If Inc. really wants to see how the Jets PSL sales staff do their job, they should view the movie “THE BOILER ROOM”

I've seen that movie and the Jets' sales environment is about as far from what's depicated in it as can be.  For one thing, the salesmen (I don't recall seeing any women in the workplace in the film) were given zero autonomy in their work.  In contrast, here's how the Jets answered the question in our award application, How does the organization encourage employees to participate in important business decisions?

The Jets culture, which is very employee centric and collaborative, enables the senior management of football and business to encourage all employees to share ideas and contribute even in important business decisions.  There are number of ways that we foster this participation.  The most important way is actually in the design of our new facility.  Before we moved to NJ, we had two offices in NYC and Long Island.  The distance between the offices made communication and collaboration challenging.  In the layout of our new building, open workspaces and open door policies reign supreme. The results have been phenomenal.  Managers and employees from different departments can work in small or large groups to develop creative ideas and solutions to important business issues.  A great example of an idea generated from this workspace collaboration is the "Opportunity Knocks" sales campaign for our season tickets and seat licenses.  With such a well known brand, the Jets needed to let the public know of the rare opportunity available to buy season tickets in our new stadium.  Opportunity Knocks was the result.  In the football world, our General Manager encourages his staff from pro personnel assistants to the Assistant General Manager to be actively involved in player decisions.  The scouts, as they are called, study players from college and other professional teams to develop suggestions and recommendations on who should be drafted on Draft Day or who should be signed as a free agent.  There have been many times that an employee will feel passionately about a player that they feel is worthy of the Jets uniform and the decision will be made to go after that player even if the GM is lukewarm on that particular player.  On both sides of our business and both sides of the ball, we would not be able to be as successful a football team if the employees were not encouraged to voice their opinions, share their creative ideas or be enabled to think "outside the box".

Further down in the comments to Mehta's post, greenjohnny wrote:

Sounds nice, should look good on a belt buckle but who really cares.  It's [sic] pretty good that they can make all their employees take two weeks off without pay and still get an award for best place to work for.

This relates to the Jets' answer to another, topical question in our application, Over the last year, what kind of impact has the economy had on your business? Please briefly explain how your company has responded?  Here's how the NFL franchise responded:

Football is not immune from the economic downturn and recession that has gripped the entire country.  Our local revenue comes primarily from ticket sales and sponsorships.  Our fans (customers) have been affected by layoffs, salary freezes and reductions in work hours.  Our sponsors have seen a dramatic decrease in budgets for spending on advertising.  Consequently, the Jets have been affected by a slowdown in revenue generated by ticket sales and sponsorship deals.  Over the course of 2009, we were challenged to find ways to decrease spending and cut costs.  Since our employees are the key to our success, this exercise needed to be done with layoffs as an extreme last measure.  Many teams around the NFL in the early part of 2009 were laying off their employees to save money.  ...  We froze salaries for the year.  Since we still needed to find extra savings, we made a crucial decision to furlough business employees for 2 weeks versus eliminating positions.  The furloughs were scheduled for the slowest time in our year at the end of June and beginning of July.  Employees had to choose 2 out of 4 weeks to take their furlough.  The response from employees was positive.  They were extremely grateful that they didn't have to say goodbye to a friend.  Our senior management participated as well, which made the program very credible.  It was tough for our employees to lose 2 weeks of pay, but overall the furlough program worked successfully.

In short, the Jets took a page from several of our previous honorees faced with tough decisions and chose to share the pain rather than lay anyone off.  The fact that senior leadership participated speaks volumes and, as you can see, helped maintain their productive workplace culture of ownership and high employee engagement.

I should mention that as part of our employee engagement research for our award, we conducted interviews with staff from different levels within the Jets' organization, and everything they told us about their employee practices, including what's excerpted above, checks out.  Especially for their industry, they are truly a Winning Workplace.

Related: For more on the Jets' new workplace environment, including some great pictures, check out this feature from the June Inc. Magazine.

Photo credit: Nikolas Koenig/Inc.

Hopefully many more small businesses, and larger ones, will invest in and see a payoff of employee engagement, since Harvard Business Review came out strongly this month in favor of engagement's impact on the bottom line.  As Portfolio.com wrote last week covering the McGill Institute for Health and Social Policy study that appears in HBR, a company's willingness and ability to treat workers at the lowest levels well is an extremely sound investment, since 90% of profitability is employee-driven.

Our 2010 Top Small Company Workplaces award finalists, which are all small and midsized organizations with fewer than 750 employees, have made this connection and have evolved to have practices in place that improve productivity and profitability, even as their people  experience a better quality of life (which the study in HBR notes is also part of the equation).

Working off of the key study findings that Portfolio pulled out, below are some data points among both our 457 applicants and 40 finalists for our 2010 award.  If the overall goal is to involve and invest more in people to drive profitability, the data below clearly show why the firms Winning Workplaces selected as finalists this year rose to the top.

• "By investing more in health care, employers managed to reduce the their workers' absentee rates and kept turnover rates low. Plus, the tactic boosted productivity."  Finalists pay 85% of employee health insurance premiums and 58% for dependents, while the percentages for applicants is 73% and 38%, respectively.
• "If companies did more training and offered more advance opportunities for those on the lowest rungs of the ladder, they were rewarded with lower turnover, easier recruitment, and increased efficiency."  Overall, the finalists have more fully developed learning and employee leadership development strategies than the other applicants.
• "Promoting from within had a big impact on keeping workers happy."  The finalists filled 27% of open positions from within in 2009; the percentage for other applicants was 22%.
• "Companies that offered stock-option programs also benefited."  33% of the finalists offer stock options as an employee benefit; 18% of other applicants do.

So what's the ROI of our finalists' overall greater investment in their employees?  Using the metrics Portfolio cites, they include:

• Finalists had turnover in 2009 of 8%; for all other applicants it was 19%.
• Finalists report easier recruitment and more employee-driven efficiencies than other applicants.
• Finalists' average employee tenure is 6.5 years; it's 4 years for other applicants.
• Finally, the biggie: 95% of finalists were profitable in 2009, vs. 90% for all other applicants.

Related: The Portfolio article mentions Dancing Deer Baking Company, the firm of our Best Boss Trish Karter.  Learn all about Dancing Deer's human capital strategies and their payoff (on more than one bottom line) by going to this search results page for our website.

There are so many areas of business where industry can be a barrier to entry: access to credit or a loan, recruiting, partnerships.  Yet, industry is NOT a limiting factor when it comes to implementing progressive people practices that drive a productive workplace.

In other words, no leader of a company, small or large, should ever answer the question "How well do you engage employees?" with "Our industry isn't conducive to that."

For proof, check out the 17 distinct industries in which our 40 Top Small Company Workplace award finalists for 2010 are operating:

1. Advertising
2. Architecture/design
3. Business-to-business trade
4. Chemicals/pharmaceuticals/biotechnology
5. Computer systems and related services
6. Construction/Engineering
7. Consulting
8. Employment services
9. Health and wellness services
10. Industrial Goods Manufacturing
11. Internet services/data processing and other information services
12. Natural Resources
13. Personal services
14. PR/Marketing
15. Retail Trade
16. Software
17. Travel/hospitality

The bottom line?  Chemicals is about as different from Travel as industries come, but even seemingly disparate firms are united by the common bond of stellar human capital strategies.  And guess what?  These strategies create another bond: steady sales growth and a clear path to achieving or maintaining profitability.

For more on our 2010 small biz award finalists, check out these posts:

• Patagonia Making a Triple Bottom Line Focus More Public
• How Our 2010 Small Biz Award Finalists Beat the Competition
• Map - The 2010 Top Small Company Workplace Award Finalists

Today Winning Workplaces announces the 40 finalists for our 2010 Top Small Company Workplace award, in partnership with Inc. Magazine.

We started our search in November 2009 for small and midsized organizations (750 or fewer employees) that engage employees and create a great workplace culture and, in turn, deliver improved business results.  Almost 500 firms completed our online application by the deadline in late January.

Our staff then pared these down to the 40 finalists that appear in the interactive map below.  Click on a marker to access a finalist's website, as well as to see when they were founded and their size and industry:

The next steps in the 2010 selection process include:

• Later this month our final panel of judges will choose this year's winners.
• These winners will be announced in the June 2010 issue of Inc. Magazine.
• The winners will be honored at Inc.'s conference in Denver on Oct. 27-29 (more info on this event coming soon).

If you know anyone interested in human capital strategies for a more productive workplace, I encourage you to share this post with them by using the button below.  Thanks!

Our former Top Small Workplaces judge Peter Cappelli, from the Wharton School's Center for Human Resources, was cited in a CNN article last week on lessons for U.S. bosses from their counterparts in India.

Cappelli provides a lot of good takeaways in the piece, based on his recent study of leaders and HR departments from close to 100 of India's biggest companies, but I think my favorite is:

A lot of U.S. companies in particular will say, 'We're not going to meet our quarterly numbers, so we've got to adjust everything in the pipeline to make sure we do.' That's a costly thing for the long term.

This falls under the Indian leadership lesson of taking the long view of growth and profitability – with average growth at a manageable 18% in 2009, it's a lesson our Top Small Workplaces share.  This strikes me as quite interesting, given that Cappelli's employee engagement research sample is the largest firms in India.

Other Indian leadership traits Cappelli advises American CEOs to embrace – which our Top Small Workplaces are already hip to – include:

• Have a social purpose
• Invest in employees through human capital strategies
• Trust your employees to tackle your biggest problems
• Act as "chief culture officer"

Related: We interviewed Cappelli when he came to our offices in 2008 to help determine that year's Top Small Workplace winners.  In the video below he shares some additional thoughts about a company can create a more productive workplace (click here if you can't see the video in your blog feed):

We've long argued, in part based on our own employee engagement research, that empowering workers to make on-the-spot decisions and to contribute to the strategic direction of an organization provides benefits for employees (increases their job satisfaction) and for companies (typically greater customer satisfaction because issues are resolved sooner and at a lower level; as well as increased employee loyalty and drive).

Here are two new sources that support this argument, for your reading and learning pleasure:

1. A review of multiple studies by The Cochrane Collaboration found that giving employees control over their work schedule improves their stress levels, quality of sleep, mental health, and alertness.  (HR Morning)
2. "HR Bartender" Sharlyn Lauby defines 7 types of power in a workplace culture and uses these traits as the basis for an exercise to help you pinpoint how you influence action from others.  (Human Capital League)

Related: Need more proof of the impact of this leadership practice?  Read this firsthand account by an employee of a 2008 Top Small Workplace (identified as a finalist in the post based on the timing of that year's winners announcement) on how it's changed his impression of a productive workplace.

Will this be the decade in which the employee engagement activity of flexible work arrangements becomes systematized and pervasive across companies and countries?  2009 gave us a nod squarely in that direction, as human capital strategies consultant and author Dr. Sandy Burud writes on the Sloan Network Work and Family Blog today.

In both 2009 and 2010, four out of five of our Top Small Company Workplace award applicant firms report flexible work arrangements among their employee benefit offerings.  To provide you with some solid employee retention tips, check out these 18 top, specific flex work practices our 2010 applicants are using:

1. Employees can adjust schedules to leave early to accommodate childcare pick-up or attend evening classes.
2. Offer weekend work to allow hourly employees to earn extra hours if they missed a day but have used up all their personal time.
3. Managers can telecommute and/or work evening or weekend hours to accommodate personal responsibilities.
4. Religiously observant employees can opt to work a company holiday and take their own religious holiday off with pay.
5. Host our own IT services such as VPN servers, email, webmail, and intranet with a focus on "any user" "anywhere" "anytime" so that users have full and easy access from all remote/mobile locations.
6. Flexible arrival and departure times allow employees to arrive late or leave early with notice to supervisors in order to attend to personal matters.
7. Variable lunch hours.
8. Allow employees to split duty in divergent job descriptions in order to satisfy their personal needs for challenging work.
9. 100% telecommuting option.
10. Mothers and/or fathers with infants are able to work from home up to 80% of the time.
11. Average full-time employee work week of 30-35 hours.
12. Job-sharing including a reduced work schedule and cross-training to cover team members on "off days."
13. Flex Fridays in the summer during which employees may leave the office at 1 pm on Fridays after working a compressed schedule earlier in the week.
14. Three shifts available to work.
15. Pets are allowed at work.  Children are allowed in certain instances and in case of need.
16. Managers are trained to accommodate flexible work arrangement requests, and systems for accountability and communication are in place to facilitate successful flexible work arrangements.
17. Offer laptops and mobile phones with email to support people working where and when they need to so they can prioritize family/personal time.
18. Staff is allowed to work four, 10-hour days due to weather, travel or family/personal conditions with approval from the leadership team.

Related: Two Winning Workplaces Best Bosses shared how flexibility factors into their strategies for a more productive workplace in this webinar.

Yesterday and today I've been doing some serious number crunching to find trends in the employee engagement research Winning Workplaces does through our annual Top Small Company Workplaces recognition project – in this case, for the 2010 applicant pool that finished applying last month.

As a result, I can now tell you what a typical 2010 applicant firm looks like:

• Privately held
• S Corp
• $0-10 million revenue in 2009
• 21-50 employees
• In the Consulting industry
• In California
• In business for between 6 and 20 years (6-10 and 11-20 years, the largest segments in a range of years, have an equal number of applicants)

Benefits include:

• Medical insurance – company pays 73% of an employee's premium
• 401(k) retirement plan
• Educational assistance – tuition reimbursement of $2,550 per employee, per year
• Paid time off/vacation/holidays/personal time – for a one-year or longer-term employee, 24 days in a PTO plan

Stay tuned for more information soon on applicants' top human capital strategies, which you can adapt for your organization.  (Do you follow our blog?  Add it to your feed reader today.)

Check out this bold post that deals with employee leadership development by Amy Bermar, Founder and President of Corporate Ink, a PR firm for the tech industry based in Massachusetts (and one of our Top Small Workplaces).

Continuing the theme of transparency that is common among winners of Winning Workplaces' small business award, Bermar explains that you won't be able to reach her staff via email on Wednesday afternoons because they've carved out that time specifically for "thinking, learning, and making the creative space to come up with new ideas."

Longtime readers of our content on human capital strategies for small firms know that Corporate Ink is not the first organization to take this type of step.  Our board member and Best Boss, Michael Mulqueen, who formerly led the Greater Chicago Food Depository, told us that he actually eliminated internal emails during his tenure there so his workforce would be forced to talk to one another, which spurred greater innovation.

I find it refreshing that in an era – especially post-CES – where technology seems to have fewer and fewer limits by the day, a decidedly non-tech move like this can turn heads and, most importantly, have a real and lasting impact on the bottom line.

In your customer or employee engagement, have you ever consciously shunned technology in pursuit of greater returns than your peers who embraced it?

Winning Workplaces is checking in with people – the majority of them CEOs – from the small firms that are applying for the chance to be named a 2010 Top Small Company Workplace in Inc. Magazine this June.  We're asking them how the process of completing our online application has helped them think about and further develop their human capital strategies to enhance their business strategy.

I've provided applicants' verbatim responses to this question in two recent posts.  But as an experiment, I wanted to see which words or terms stood out from the collective feedback on this that they've given us.  Here's a Wordle-generated tag cloud showing the results:

How does one interpret this?  Well, if I were to create an amalgamated answer to the question we posed to applicants based on this tag cloud, I would write it as:

This process helped in our thinking about how we can make our culture and work environment better for our employees.

A number of applicants report that what they learned from applying this year has turned into action steps to improve their employee engagement practices, so 2010 ends on a productive high note.  I love reading when this happens, as it's one of the benefits we intended when we worked extensively to improve the 2010 application over the 2009 version.

Want to increase your competitive advantage in your people practices area, too?  It's not too late to apply for 2010 Top Small Company Workplaces and reap similar value for your organization.  You can do so here.

Even if, because of the economy, your company is not doing a holiday party this year, the chances are good you're doing some holiday team building by encouraging your folks to do a "Secret Santa"-style gift exchange.  Or maybe your team is looking for a great gift for your supervisor.

Whatever the context for an office stocking stuffer, Winning Workplaces has you covered.  Check out these books, which come recommended by several business-related blogs I follow.

Referred by Management-Issues:

• Your Brain at Work: Strategies for Overcoming Distraction, Regaining Focus, and Working Smarter All Day Long by David Rock
• Creating Passion-Driven Teams: How to Stop Micromanaging and Motivate People to Top Performance by Dan Bobinski
• A Cup of Cappuccino for the Entrepreneur's Spirit: Volume I by Jeretta Horn Nord
• The Other Kind of Smart: Simple Ways to Boost Your Emotional Intelligence for Greater Personal Effectiveness and Success by Harvey Deutschendorf
• A World of Wealth: How Capitalism Turns Profits into Progress by Thomas G. Donlan

Referred by Small Biz Survival:

• BAM! Delivering Customer Service in a Self-Service World by Barry Moltz

Referred by Small Business Trends:

• Self-Promotion for Introverts: The Quiet Guide to Getting Ahead by Nancy Ancowitz

Referred by The Instigator Blog:

• The Four Steps to the Epiphany: Successful Strategies for Products That Win by Steven Gary Blank
• Inbound Marketing: Get Found Using Google, Social Media, and Blogs (The New Rules of Social Media) by Brian Halligan and Dharmesh Shah
• Pow! Right Between the Eyes: Profiting from the Power of Surprise by Andy Nulman
• Trust Agents: Using the Web to Build Influence, Improve Reputation, and Earn Trust by Chris Brogan and Julien Smith
• Six Pixels of Separation: Everyone Is Connected. Connect Your Business to Everyone. by Mitch Joel

Additionally, check out these eight titles we've reviewed on our website that are focused on helping you improve employee engagement:

• The Truth About Trust in Business: How to Enrich the Bottom Line, Improve Retention, and Build Valuable Relationships for Success by Vanessa Hall
• The Boss Benchmark: 35 Ways You Can Finally Reach It by Allison O'Neill
• Primal Management: Unraveling the Secrets of Human Nature to Drive High Performance by Paul Herr
• Wired to Care: How Companies Prosper When they Create Widespread Empathy by Dev Patnaik with Peter Mortensen
• The Offsite: A Leadership Challenge Fable by Robert H. Thompson
• Greening Your Office - From Cupboard to Corporation: an A-Z Guide by Jon Clift and Amanda Cuthbert
• A Manager's Guide to Coaching: Simple and Effective Ways to Get the BEST Out of Your Employees by Brian Emerson and Anne Loehr
• Tribal Leadership: Leveraging Natural Groups to Build a Thriving Organization by Dave Logan, John King and Halee Fischer-Wright

Photo credit: GeekSugar

On Friday Newswise reported on new employee engagement research by the Global Entrepreneurship Monitor (GEM) which puts some hard data behind the widely accepted notion that entrepreneurs thrive during hard times.

Among GEM's findings as part of its 2008 National Entrepreneurial Assessment for the United States of America:

• Total entrepreneurial activity increased 12.5% from 2007 to 2008.
• The ratio of those who started their business because of the opportunity vs. out of necessity is almost 7 to 1.
• "The United States continues to be at or near the top of the world's innovation-driven economies in terms of early-stage entrepreneurial activities."
• "Perceived opportunity is substantial despite a greater fear of failure."

The GEM study concentrates on early-stage entrepreneurs and young companies.  In order to build longevity and survive multiple downturns – whether they're macro or only industry related – a strong workplace culture characterized by solid and ever-retooled human capital strategies is needed.

With the theme of not just surviving but thriving in tough times in mind, I thought you'd enjoy these related posts:

• Engaging Employees Helps 18th Century Baking Company Become a 'Hot 100' Internet Retailer
• Local and Community Banks Doing Well, Thank You
• 'Team Building' Blog Roundup: Three Perspectives and Our Take

Photo credit: random theorist