Episode 17, Season 4: Why People-First Businesses Outperform Others & How You Can Apply This Model

[00:00:00] Welcome back to the MSME Growth Hub Podcast. I am your host, Abanibhusan Bera and today we are wrapping up our powerful three-part series on the KPR Mills story and the transformational power of People-First business strategies.

[00:00:18] In the last two episodes, we explored how one decision by KPR Ramoshami to invest in his workforce led to a thriving, sustainable business model. We also broke down five key lessons MSME can apply to drive long-term growth.

[00:00:37] But today, we are addressing a bigger question. Why do People-First Businesses consistently outperform their competitors? In this episode, we will discuss why putting people before profits leads to higher revenue,

[00:00:57] the biggest myths about employee investment and why they are wrong, a step-by-step approach to implementing a People-First strategy in your MSME. Like previous episode, I will give my own imaginary use case as examples and if your organization happened to fall in that category, you may think of implementing the idea. Let's dive in.

[00:01:26] Now the question is, why People-First businesses win in the long run? Traditional business thinking focuses on profits first, people second. But research and real-world case studies prove that companies that prioritize employees and customers end up making more money, not less. What the reason is, increase and more.

[00:01:52] Reason number one. Higher employee engagement leads to higher productivity. Why? The fact is here, employees who feel valued and empowered work harder and stay longer. What this means for MSME is, engaged employees are 17% more productive than disengaged ones.

[00:02:16] Second, companies with high employee satisfaction see 21% higher profitability. And third, high workplace morale reduces absenteeism and turnover, which can be expensive to replace. Here is my use case example.

[00:02:36] A B2B industrial supplier can achieve a 25% increase in efficiency for sure after introducing performance-based incentives and training programs for employees. Now the TKO is a motivated team, is a productive team and productivity fuels revenue growth.

[00:02:59] Reason number 2. Employee retention saves money and builds expertise. What's the fact behind it? Hiring and training new employees costs 50-60% of their annual salary. What this means for MSM is First, losing an employee is more expensive than investing in them.

[00:03:24] Second, experienced employees contribute more to customer satisfaction and operational efficiency. Number 3. Long-term employees build stronger client relationships, leading to repeat business and reference. This is my imaginary use case example here. If you are an MSME offering IT consulting, you can reduce employee turnover by 40%.

[00:03:49] If you think of launching an internal mentorship program and offering flexible work options. So the TKO is, investing in employee retention is cheaper and more profitable than constantly hiring replacements. Reason number 3. People-first companies build stronger brands. What's the fact behind it?

[00:04:16] 70% of consumers say they are more likely to buy from a company known for treating employees well. Now what this means for MSM is First, ethical employee-focused brands attract more customers and command higher prices. Number 2. Businesses with a positive employer reputation attract top talent without high hiring costs. Number 3. And number 3.

[00:04:46] Customers are more loyal to businesses with strong values. My imaginary use case example for this is like this. If you are a handmade jewelry MSME, you can think of starting marketing your woman-led workforce and ethical sourcing policies. What outcome can be expected?

[00:05:09] Within a year, you may even triple your customer base and gain premium pricing power. So the takeaway is, customers pay attention to how businesses treat people internally and externally. Number 4. Reason number 4. People-first businesses are more resilient in economic downtrods.

[00:05:37] Now what's the fact behind this? Companies with strong workplace culture and engaged employees recover faster from economic downtrods. What this means for MSM is First, loyal employees stick with the company in tough times. Number 2. A positive work environment reduces stress and increase adaptability. And number 3.

[00:06:03] Businesses with engaged teams are 2x more likely to survive recessions. Here is my imaginary use case example. Let's say you are an MSME distributor in the automation sector and think of some recessionary period in which it was tough to retain all employees because of reduced turnover.

[00:06:26] Instead of layoffs, you may think of offering flexible commission structures to your top salespeople. It will surely help you rebound faster than competitors. In reality, I know many companies did this during COVID pandemic. So the takeaway is, loyalty during stable times builds resilience during crisis.

[00:06:54] Now let's see how to apply the people-first model in your MSME. How can you shift from a profit-first to a people-first model while still growing your business? Here's a step-by-step approach. Step number 1. Invest in employee growth. First, offer training, upskilling and career development opportunities. Number 2.

[00:07:21] Introduce a mentorship program for junior employees. Three, sponsor certifications and workshops relevant to your industry. Step number 2. Create a workplace culture that retains talent. A. Foster open communication. Employees should feel heard. B. Reward loyalty and performance. Bonuses, profit sharing or promotion. C. Offer flexible work policies if possible. Step number 3.

[00:07:51] Align your brand with ethical business practices. First, promote your values, fair wages, inclusivity and employee well-being. Two, highlight your employee initiatives in marketing and recruitment efforts. Three, engage with social causes that resonate with your industry. Step number 4. Focus on customer and employee experience simultaneously.

[00:08:20] Because happy employees create better customer experiences. Second, train employees to go the extra mile for customer satisfaction. And number 3. Implement feedback loops. Gather insight from both employees and customers. So, key takeaways and my final thoughts. People first. Businesses are more profitable, resilient and trusted by customers. Here is why.

[00:08:48] First, engage employees work harder and stay longer. Second, retention saves money and expertise adds value to business operations. Three, people-centric brands attract loyal customers. And number 4. Businesses with strong work cultures survive economic downturns better. So, what is your next step? Start applying one people first initiative this month. Whether it's training, retention strategies or workplace improvements.

[00:09:18] If you want a structured plan to grow your MSME, join my AI-powered MSME Growth Hub Community today for just 999 rupees. Get lifetime access to 3 secrets of MSME Business Growth Course. Free one-on-one growth consultation. Learning on the go with iOS and Android apps. Weekly live Q&A sessions with me for life.

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