It might seem like a silly investment to buy a second coffee pot for the break room if the office already has one. However, buying a second coffee pot might mean that your employees spend less time in the break room annoyed as they wait for the Keurig to be available. Therefore, by purchasing that second, seemingly unnecessary coffee pot, you could conceivably boost overall morale and incentivize your employees to do more work. Intangible benefits are assets that are more difficult to measure than financial gain, like the joy of your employees as the result of those new coffee opportunities. They may not be financially beneficial, but they are an important consideration to take into account as someone in a decision-making position.
What is the difference between tangible and intangible benefits?
Tangible benefits are concrete, physical goods that can be measured. The amount of land owned by a company is considered a tangible benefit, as are the personnel they hire and the machinery they use. The most tangible benefit of all is money because it is more changeable than other tangible benefits that a company might possess.
When considering big business decisions, companies typically calculate a potential ROI (Return on Investment). These ROIs tend to consider all the physical, monetary returns but often ignore the intangible benefits that might accompany an investment; since they’re more difficult to measure and often even hard to spot, intangible benefit analysis can seem like a waste of time. However, intangible benefits are not as useless or random as they may seem. Here are some reasons why measuring possible intangible benefits before making an investment is a good idea.
3 advantages of intangible benefits.
1. Tangible benefits are facts, but they’re not the only facts.
It might be a fact that investing in basic stock bundles, like the S&P500 or the US Aggregate Bond Index, is the easiest and cheapest way to ensure an ROI, but another fact is that those indices include companies that actively pollute the environment. Another fact is that the environment is something that we as humans actually have to begin worrying about, and one way to take a stand is by divesting from companies that pollute. So if fighting against climate change is important to you, perhaps the tangible benefit of spending less money is not worth the intangible drawback of buying stock that goes against your morals.
2. You can use calculations to set a goal.
When you make projections as to the possible intangible benefits of an investment, you can think of it as goal-setting. For example, creating an IT department looks like a large cost from a monetary standpoint, but when you consider how it might benefit employee work pace, prevent breaches of security and improve customer experience, it seems far more worthwhile. Set improvement in those areas as a goal, and check up on how you're doing through surveys, computer safety checks and comparing output from month to month. It's likely that you will end up getting a lot out of that original expenditure if you work toward fulfilling your intangible benefits.
3. Happy employees don’t just work faster.
There are many unseen ways in which an employee who is pleased with their job will benefit your company, both in the short run and in the long run. An employee that has had a good day will feel incentivized to work hard, and if they are shown rewards for their efforts, they'll continue. An employee that feels well supported by their employers in general is going to speak highly of your company, which can help you find more qualified workers and facilitate networking in the future. Plus, happy employees make for a pleasant work environment, which can lower your own stress levels.
3 examples of intangible benefits.
1. Employee recognition.
Psychology dictates that when people receive positive reinforcement, they're likely to continue acting in the same way. Without positive reinforcement, however, they can become disinterested in the work they’re doing. Offering recognition to your employees can be as simple as shooting out a quick email saying they're doing a great job or as elaborate as giving out perks to employees who attain a certain publicly-recognized goal, like 10 years working for the company. No matter what the recognition is, it will boost morale.
2. Opportunities for advancement.
Positive reinforcement isn’t the only important motivation for a worker. In our (supposedly) meritocratic society, having available opportunities for advancement — i.e. raises and promotions — gives a worker reason to believe that if they work hard, they will be rewarded for that work with a better salary or job. This belief preserves a competitive edge in employees since they always feel that they have something to prove and helps everyone produce the best work they can — an intangible benefit that becomes tangible when you look at output levels.
3. Less micromanagement.
Trusting your employees to do their work without checking up on them may seem risky, but the fact of the matter is that if you allow your employees to set their own pace of work (while still holding them to deadlines), they will feel more respected. Nothing discourages someone from working like feeling infantilized. Once you stop micromanaging, not only will you save time by not spending energy checking up on everyone constantly, but you’ll also have many more content employees on your hands.