Research ties positive Glassdoor ratings with higher customer satisfaction and company valuations
Reviews matter. Restaurants live and die by their Yelp ratings, film companies have begun to use Rotten Tomatoes scores in their promos (assuming they’re good), and review sites like GoodReads have grown explosively in the last decade. Before we buy meals, tickets, books, and more, we want to be confident that our investment will pay off.
Companies know that customer reviews are important. But less obvious is the importance of employee reviews, particularly Glassdoor reviews. As more than 67 million people per month now use Glassdoor — primarily to search for jobs — these testimonials make a huge difference. Better employee reviews attract better talent. Better talent delivers a better consumer experience, and consequently improves companies’ overall brand perception.
By focusing on internal development, companies can create happier cultures, which lead to more positive reviews, more top talent, etc. Beyond its intrinsic value, happier also means more productive: Studies have shown that human brains at “positive” are 31% more productive than at negative, neutral, or stressed.
Good business originates in happiness. In this article, we explore the proven power of employee reviews, and identify ways that companies can boost their scores. Be advised: Improved reviews won’t happen overnight, they will be a long-term result of committing to a healthier, happier culture.
The Science of Employee Satisfaction
Intuitively, the notion that happier employees deliver a better customer experience makes sense. But does the science back it up?
Signs point to yes. Between 2008 and 2018, Glassdoor led a study that analyzed the relationship between “employee satisfaction on Glassdoor and customer satisfaction from the American Customer Satisfaction Index (ACSI).” Spanning 293 companies and 13 industries, the study associated a 1-star improvement in employer company ratings with a 1.3-point uptick in customer satisfaction (out of 100).
The study found an even stronger relationship among companies in “high customer contact” sectors, like hospitality, food services, financial services, and healthcare. In those sectors, the effect was more than doubled.
Prior research had corroborated Glassdoor’s findings. Research published by Auburn University in 2014 found a 2.05-point rise in customer satisfaction for every 1-star increase in employee ratings.
Moreover, Glassdoor determined that higher employee ratings also meant higher company valuations. 1-star improvements produced anywhere from 7.8–18.9% higher stock market valuations.
Suffice to say: Investing in employee happiness, and seeing evidence of it on Glassdoor, has myriad benefits. When employees view their companies favorably, customers get better service. As proven by Yelp, great service is the primary driver of positive customer reviews, so that influx of employee satisfaction trickles all the way down to the company’s bottom line.
The equation is simple: Happy employees = happy customers = improved brand perception. So, what can employers do to reap these benefits?
Tips for Healthier Cultures and Higher Scores
There are a number of ways companies can improve their cultures, most of which are best implemented on Day One. But wherever you are, here are some ways to set employees up for success and satisfaction.
Tip #1: Communicate Honestly
This starts during the interview process and extends throughout employees’ tenures. In the beginning, be sure that the work experience you describe is accurate. Selling someone on an experience that proves false is a surefire way to sow discontent and rack up negative Glassdoor reviews.
Then, as employees become more experienced in the organization, communicate with them regularly to understand what they do and don’t like, where they are and aren’t excelling, and how they’d like to grow in the organization. Not everyone’s path is the same. Honest, open communication is step one in determining how to nurture employees’ growth.
Tip #2: Create a Culture of Feedback
If people are afraid to deliver feedback, you won’t hear about your faults until they show up on Glassdoor. Intimidating leaders will always be kept in the dark. Be forthcoming about your own mistakes, and repeatedly solicit feedback. Your team members may be reticent to deliver negative feedback at first, but if you consistently demonstrate your willingness to learn, they’ll eventually grow comfortable.
Upon receiving feedback, incorporate it. Demonstrating your capacity for listening and growth instills confidence in team members, both to speak up when something bugs them, and to trust that doing so will lead to a healthy resolution. Good reviews start with you. If you’re willing to adapt to your employees’ needs, they’ll be willing to sing your praises on all-important review sites.
Tip #3: Make the Most of Reviews — Positive and Negative
Feedback is money in the bank. It’s someone telling you exactly what they think of you and the job you’re doing. Whenever you get a thoughtful review, regardless of its contents, take it to heart. Don’t be overly flattered by praise, and don’t be overly offended by criticism.
Also, respond to your reviews as thoughtfully as they were written. It takes time and effort to write a meaningful review; show that you respect this by devoting the same time and effort to your response. It’s just one more way to make employees feel heard, and to instigate the process of mutual development.
The Feedback Loop
Whatever your company’s specialty, the quality of your culture has reverberating impacts. Cold, inhumane cultures produce disgruntled workers, high turnover, and ultimately, lower customer satisfaction. Cultures of care and transparency produce happy workers, lower turnover, and satisfied customers. Soliciting and accepting feedback is the grease that keeps those gears turning.
When properly utilized, platforms like Glassdoor make a world of difference. Positive reviews attract top talent, and evidence a stimulated, satisfied culture. Brand perception starts with your brand spokespeople — that is, your employees.