This is why employee happiness is the most important KPI for a company

I am often asked which KPI do I consider to be the most important for a company. The one to which I attribute the highest importance. That one value that reassures me when it’s good, and that worries me the most when it’s bad. And it might not exactly be the one you’re thinking of.

One often expects me to say something like revenue growth, the burn reduction, the profitability or the win/loss ratio. All of these, of course, are obviously extremely important indicators… just ask my shareholders. But in my opinion, they don’t really represent the most important thing in a company, the one thing that translates into its long term success, guarantees its longevity and allows a business to reinvent itself and push itself forward, even when facing the biggest storm. What really allows a company to truly stand out from the competition is its “team happiness”.

Employee happiness is just one of the many Key Performance Indicators (or KPIs) a company can use to measure success. But, to me, it’s the most crucial one for a business to achieve its goals. Let me tell you why.

Motivated and happy teams perform much better. When employees are satisfied with their work and their work environment, when they really enjoy their daily lives at work, they are more likely to be engaged, to go the extra mile to ensure their work is of high quality, to be innovative and find solutions to problems and, therefore, achieve better results.

It’s the same in personal life: when you enjoy doing something, you’re much better at it. The people who cook the best are usually people who are passionate about cooking. These people will spend their leisure time immersed in cookbooks. They will take the time to walk through countless market aisles to find the best products. They can spend a whole day preparing a sophisticated dessert that will just end up being swallowed in under 5 minutes during dinner. These people are driven by passion… And they transfer this passion — or at the very least pleasure — onto a dish so they can make it perfect. And that is why strong performance and passion often go hand in hand.

There’s no denying that employee satisfaction drives retention. When employees are happy with their jobs, they are more likely to stay with the company longer.

This leads to reducing the costs of recruiting and training new employees but it also saves HR teams the time they would have to spend searching for the right candidates. On the other hand, happier employees tend to be more productive and efficient, which greatly contributes to the overall success of the company.

All the happiness and positive energy of satisfied employees also has an impact on customers and suppliers. Satisfied employees tend to have a positive attitude and are more likely to provide excellent customer service. This can lead to a better relationship between the company and its customers and suppliers, which can generate business opportunities and a better reputation.

I see it happen every day at Rydoo. We have a very low client churn (less than 5%) and very high net retention rate — close to 120%, and it keeps on growing, year after year. Besides having a best-in-class solution (because of course it all starts with having a good product!) we have a great CSM team made of passionate and fulfilled people. This passion, I’m certain, is perceived in the way they interact with customers, contributing to a stronger performance.

Beyond customers, employee happiness has an overall impact on the way people perceive Rydoo, not only as a product but as a brand in itself.

When employees are satisfied, they are more likely to speak positively about their work and the company to their friends, family, other members of their network and even on websites such as Glassdoor. In the end, all of this “word of mouth” improves the company’s ability to attract top talent — just last year, 60% of our new employees came from internal referrals! —, which is critical to maintaining a competitive advantage in the marketplace.

If you’re looking for results to measure your company’s short-term success, then I would say typical performance indicators will be your best friends. But if you’re looking at medium and long term success, then I believe employee happiness takes the #1 spot on the podium. Rydoo’s success to this day is a direct consequence of our fulfilled and motivated team.

This is why we pay so much attention to employee happiness at Rydoo and send out a survey every quarter, doing a deeper dive one every year. Since we’ve started measuring our e-NPS (Employee Net Promoter Score), the same way we do for our end-users and customers, I’m very happy and proud to say that we’ve obtained an average score above 50 (often closer to 60!), which is quite high.

All of the above may seem obvious to you… In fact, many leaders say their top priority is employee happiness. But think about it: in “real life”, how many management teams pay as much attention to the happiness of their employees as to the performance indicators of the company? How many management teams monitor their employee satisfaction and discuss it “seriously” during their quarterly meetings? Not many, I tell you…

A company that understands and wants to be serious about it will build a real “employee value proposition”. How to do that, one might ask… Well, that’s a story for a whole other chapter. To be continued…!