How much leadership engagement increases employee performance in the best small and medium-sized companies

That’s what you’ll find among Fortune’s best small and medium-sized workplaces for 2024.

“We see it clearly in the data: When people feel cared for, their full potential is unleashed, and even the smallest group of engaged and confident individuals becomes an unstoppable force,” says Michael C. Bush, CEO of Great Place To Work®. “When leaders truly care about their employees, and we mean all their employees, it changes a company.”

At the best small and medium-sized companies, more than nine in 10 employees report that management shows a genuine interest in their lives (95%) and that employees care about each other in the workplace (98%). In a Great Place To Work market survey of 4,400 U.S. employees in a typical workplace, only 58% said management shows an interest in their lives. Just over two-thirds (68%) said employees care about each other in the workplace.

A caring culture unleashes the potential of your workforce.

When employees say their coworkers care about each other, they are 1.7 times more likely to put in extra effort at work. When they feel like managers care about their lives, they are 1.5 times more likely to want to stay with the company long-term.

For companies looking to increase productivity and improve performance, a culture of collaboration is critical. When employees say they are willing to collaborate, they are 6.7 times more likely to put in extra effort at work, according to survey data analyzed by Great Place To Work.

The good news for small and medium-sized businesses? Building a caring and collaborative company culture is cost-effective.

“Caring, empathy and compassion are tools that any leader can use, no matter the size of their company or how many people work in HR,” says Bush. “At the best small and midsize companies, caring leadership becomes a superpower – and these companies are finding that they can compete with any organization for the best talent.”

“At the best small and medium-sized companies, caring leadership becomes a superpower – and these companies find that they can compete with any other company in the battle for the best talent.”

This is how successful companies take care of their employees and promote a collaborative environment for everyone:

1. Even in small teams, assign an advocate to everyone.

Great workplaces offer employees numerous opportunities to engage with the company and provide feedback on their experiences.

At Anthem Engineering, No. 32 on the Best Small Companies to Work For list, each new hire is assigned an advocate who meets with them monthly. An advocate can be a person’s manager or another member of the team.

The advocate’s job is to ask specific questions to understand the employee’s experience: How are you developing? Are there things we can do to help you? How can we help you develop better?

Those conversations are then relayed to executives, and every request receives a response. “When you hear something, you have to do something,” says Rick Rowe, chief operating officer at Anthem Engineering. “Even if you come back with bad news, at least acknowledge it and own it.”

2. Listen carefully to an employee resource group.

While multiple employee resource groups may not make sense for a company with fewer than 100 employees, small businesses can still bring their employees together to listen intently.

Once Upon a Farm, No. 64 on the Best Small Places to Work list, uses its Employee Engagement and Empowerment Committee to strengthen its company culture and get feedback from employees. This universal resource group has 23 members, seven to 10 of whom participate in monthly conference calls to share ideas and develop programs. “With HR, I don’t have all the great ideas,” says Melisssa Ninegar, senior director of people and culture at Once Upon a Farm. “You really want to cater to the specific needs of the organization—so start with your team and make sure it’s a collaborative process.”

3. Ask about goals and plans outside of the workplace.

At WestPac Wealth Partners, No. 1 on the list of best mid-sized workplaces, advisors joining the firm are asked to share their personal goals and aspirations to ensure their work helps them make progress toward achieving those outcomes.

“If you work with me and make a lot of money, but the rest of your life sucks, then I’ve failed you as a leader,” says Travis Scribner, managing partner at WestPac. “I want you to succeed in all areas of life. What do you want to accomplish with your family from an educational perspective, from a recreational perspective, from a self-improvement perspective?”

Consultants share these goals with their manager, and leaders then review them quarterly to ensure everyone is benefiting.

Learning about personal dreams and interests can also provide unique opportunities to honor employees. At Anthem Engineering, employees receive a unique and special holiday gift that matches their interests. Examples include a fine bottle of wine or tickets to an NFL game. For larger milestones, such as a 10-year anniversary, leaders reach out to an employee’s family to find a unique, generous gift that an employee might enjoy.

4. Make your leaders accessible.

“A relationship with the company’s leaders can be extremely valuable to our team,” says Scribner. “People want their work to have meaning; they want relationships.”

To make WestPac’s executives accessible, each team member receives the personal cell phone number of the CEO and the company’s three managing partners.

“We hear from our team all the time,” says Scribner. “We know we don’t have the only good ideas. They can come from anywhere within the organization – and it’s incredible when we give the organization the opportunity to give us ideas that help improve the company.”

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