Whatever your political opinion of the new tax law, one fact is above debate: Companies that report corporate profits will pay less in taxes under the new code. All things being equal, companies will have more money to spend. What is far from certain, however, is how that money will be spent. That said, assuming successful profit-driven businesses spend money to make money, we can probably assume that the money will be spent in the way(s) deemed most profitable.
Companies that find themselves a little more flush with cash have a variety of options, from giving employees an unexpected bonus to paying down debt to giving the old HQ building that much-needed face lift. The possibilities are endless. For public companies the choices are even broader because they include things like stock buy-backs and increasing dividends aimed at increasing the stock price.
Smart companies will invest in their most valuable long-term asset: people. If ever there was a time to invest in talent, now is that time. Sharing the money with employees by giving one-time bonuses or unexpected pay increases is certainly a nice thing to do. In some situations, it might even be a good strategic move. But anyone who has studied industrial psychology knows that such “gifts” have a short-lived impact. The warm glow will last only until the company inevitably gives the employee a reason for disgruntlement. No, if a company wants to truly invest in its people there are better ways. Of course, it won’t be entirely lost on employees that their employer is about to get a raise that’s multiple times larger in percentage than the one they’ll be getting come raise time. What’s more, the company didn’t even have to work harder to get it. Of course, employees are unlikely to stand up and demand their “fair share” of the windfall, but they may be quietly looking for some sign that it’s being spent in ways that will benefit them too, even if that just means growing the business.
But why not invest in something that visibly benefits both employees and the company? Why not put a little of the money into improving the employee experience? It’s a good investment that’s good for employees.
The workforce experience is going digital … fast. Technologies are available today that not long ago seemed like science fiction. Imagine employees getting their HR questions answered and problems solved through their smartphones with the aid of robot-assisted navigation so they can find what they need without having to know where to look. Consider employees, especially older ones like me, using voice recognition and available artificial intelligence technology, to simply speak commands instead of having to navigate endless screens. With biometric security based on voice, fingerprints and facial recognition, envision your employees sailing through firewalls effortlessly yet securely. Think about all of this coming together in experiences you want employees to have during those key moments in the employee life cycle.
What’s more, think about the benefits of a better digital workforce experience to the business:
- A more engaged and productive workforce. Many of the same reasons for making employees’ physical spaces more pleasant apply to their digital environment. Better digital experiences make it easier for employees to do everything to a lot of things — e.g., connect to the organization’s mission & culture, develop their careers, figure out what benefits are available and right for them when a life event such as a marriage or the adoption of a child happens or is about to happen.
- A more efficient and productive back office. Automation of routine tasks (e.g., scheduling interviews, answering frequently asked questions about benefits, chasing down signatures, correcting data entry errors) results in time savings, which can be translated into dollars. Hours and dollars can be reallocated to more value-add work and make life more fulfilling for people in corporate functions like HR, Finance and IT.
While some of the technologies described are just finding their way into the workplace, all are in practical use today and will be mainstream in HR before we know it. So, while I’m sure your employees would like you just give them some of that cash, the smart investment is probably giving them something that will make the warm feelings last a lot longer, a new employee experience for the digital age. There’s never been a better time.
The views of the author of this article do not necessarily represent the views of Gradifi. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained here. Readers should consult their own attorneys or other tax or financial advisors to understand the tax, financial and legal consequences of any strategies mentioned in this article.