How Can Collaboration Help a Business Grow? [2023 Guide]

Which KPIs Do Collaboration and Employee Relationships Impact?

While factors like workplace collaboration and the quality of employee relationships may not seem essential, they have far-reaching impacts on several important KPIs, including the following:

• Employee retention and turnover — How well your business can retain employees or how often employees leave, which impacts factors like productivity and rehiring efforts. Employee retention is an important hybrid work KPI.
• Budget variance (planned vs actual) — The difference between how much money is budgeted (planned) vs the actual amount of money in expenses or revenue (actual).
• Customer satisfaction scores — How happy customers are with their experience, product, or service, which also impacts various sales KPIs and customer retention rates. 
• Upsell and cross-sell rates — The rates at which customers are induced to buy an upgraded product (upsell) and another product in addition to the initial purchase (cross-sell).
• Average sales cycle time — The average length of time it takes to sell to a customer from the moment they’re a prospect to the moment a deal is closed.
• Order fulfillment cycle time — The time it takes from when a customer places an order to when they actually receive it in hand.

When these KPIs take a downturn, your entire business suffers.

So it’s worth the effort to promote quality employee connections and an overall collaborative work environment.

How Can Collaboration Help a Business Grow?

Collaboration can help a business grow by providing the environment needed for good ideas to thrive.

From increased innovation driving revenue growth to enhanced problem solving that mitigates customer churn, effective employee collaboration produces trickle-down effects with major impacts on business performance.

Below, we’ll explore some of the fundamental KPIs that collaboration can help businesses grow, especially when combined with quality employee relationships.

1. Collaboration Boosts Employee Retention and Reduces Turnover

One of the biggest benefits of collaborative relationships is that they can help businesses retain top talent, thereby reducing turnover and negating rehiring efforts and costs.

In fact, new hires who have collaborated on others’ projects and have others help out with theirs are 65% more likely to stay with the company than their siloed peers.

It pays to have them stay because when employees quit, businesses must dedicate a lot of resources to locate, interview, and train new talent.

According to industry reports, the cost to replace an entry-level employee is between 30% to 50% of their annual salary. And, for a mid-level replacement, that figure rises to a whopping 150%.

So if a mid-level employee were making $100,000 per year, it would cost $150,000 to replace them. And if collaboration methods or company processes for communication haven’t improved, there’s no guarantee that this individual will stay on.

You can see how quickly these issues of poor collaboration and communication can add up and spiral out of control. Being able to collaborate saves your business both time and money in the long run, thus eliminating costly mistakes.

2. Collaboration Reinforces a Favorable Budget Variance (Planned vs Actual)

Your budget variance needs to be in the positive to save your business money. Fortunately, collaboration can help with that.

When employees work well together toward a common goal, they become more engaged, and their overall productivity can increase drastically. And when productivity increases, the budget variance becomes favorable.

Here are two ways this works:

1. If the actual amount is lower than the budgeted amount for expenses, that’s a positive result. It means you spent less than you planned. And since collaboration increases productivity, this alone saves you a massive amount in expenses. For instance, employee disengagement alone costs $7.8 trillion globally in lost productivity.
2. If the actual amount is higher than the forecasted amount for revenue, that’s also a positive result. It means your business made more money than expected.

As you’ll see below, in-person collaboration also reinforces a favorable budget variance for revenue by improving customer service satisfaction scores (CSAT).

3. Collaboration Improves CSAT Through the Magic of Teamwork

It’s no secret that teams who work well together deliver better outcomes, and customer satisfaction is no different.

Here’s a case study from Harvard Business Review (HBR) to illustrate just how important that is:

A firm producing marketing and analytics software dubbed TechCo was hitting all their sales and installation targets. Yet, many new customers weren’t satisfied.

When the executives looked into it, they discovered that each team in each department focused on their own tasks and didn’t work with other teams in other departments to make sure all the pieces fit together. As a result, the software didn’t work as it should’ve, and customers were irate.

So how can collaboration help a business grow?

Well, a global bank whose team members did collaborate increased their customer satisfaction scores by 8%. And thanks to satisfied customers, each branch took in 17% more in revenue.

When teams work well together, customers are happier, and revenues are higher.

Check out this article for some inspiring workplace collaboration examples.

4. Collaboration Increases Upsell and Cross-sell Rates

Collaboration makes it easier for employees to leverage creative thinking. It also allows them to get a broader understanding of how their efforts build off one another toward a shared goal. This leads to a more innovative workplace, which means more products being offered and increased upsell and cross-sell rates.

A great example of this is Apple, which disrupted the smartphone market with its revolutionary offering — the iPhone.

From 2004 to 2007, a cross-functional team using specialists from departments across the organization collaborated on this never-seen-before concept.

It took the world by storm, and the second-most valuable brand worldwide now offers its customer base a wide variety of products, software, and services — all designed for interactive use within the Apple ecosystem.

Talk about increasing cross-sell rates!

5. Collaboration Reduces the Average Sales Cycle Time

It goes without saying that a lot goes into selling.

First, you have to attract potential customers to your brand. Then, you have to make sure they want what you’re selling. If they do, that’s great!

The seven stages of a sales cycle.

But it’s not over yet. You still have to overcome their objections, but if all goes well, you will finally close the deal. That’s the sales cycle, and how long it takes your business to go through that process depends on how well your employees collaborate.

Integrated Environmental Solutions (IES), a leading integrated performance-based analysis innovator, uses unique software and technology to support cost-effective and healthy built environments.

However, after two years of working entirely remotely due to the COVID-19 pandemic, IES employees saw little benefit in returning to the office.

The challenge was in getting employees back to the office while continuing to provide them with the flexibility they wanted. Fortunately, IES discovered OfficeRnD Hybrid, which helped hybrid work work for them by allowing them to manage their real estate resources more effectively, use in-app announcements to encourage collaboration among their employees and eliminate friction from their workflows, among other things.

Read the full story here.

6. Collaboration Speeds Up the Order Fulfillment Cycle Time

Nowhere is collaboration more important than speeding up the order fulfillment cycle time. After all, customers not getting what they ordered on time gives your business a sour note.

In HBR’s case study from before, TechCo’s teams worked in the silos of their departments, which led to shoddy products their customers weren’t happy with.

In their haste to reach sales targets, the sales teams neglected to properly document their customers’ needs. The engineering teams then started working on the product without knowing what their customers needed, and when they finally delivered the product, issues abounded. The client service teams were then left to sort out the mess.

One, TechCo’s customers didn’t get what they wanted, and two, they had to wait until the client service teams sorted everything out. Assuming they finally got their working product in the end, that process from order to fulfillment was needlessly lengthy and convoluted.

It doesn’t have to be that way. And it won’t as long as employees work together and communicate well across different departments.

Here’s a useful guide on hybrid team collaboration that sheds more light on the topic.

How Can Using the Right Tools Boost In-Person Collaboration?

When you put the right fuel into your car, it drives smoothly. But using the wrong fuel can not only damage your car but also cost you handsomely.

It’s the same with collaboration.

You need the right tools to promote productive collaboration in the office, especially in a hybrid work arrangement. For example, OfficeRnD Hybrid makes it easy to schedule real-life interactions with collaborative scheduling.

Watch the video below to see that in action.

You no longer have to individually text your team to see who’s in the office because the platform will show you the ones who are. And if they’re not in the office? Send them a customized invite straight from the platform.

On top of that, employees can plan their week on a beautiful “Schedule” page and see existing workplace policies. Everything is seamlessly integrated with the most popular work tools to make face-to-face collaboration that much easier.

Take Workplace Collaboration to the Next Level with OfficeRnD Hybrid

It’s important to promote effective in-person collaboration and positive employee relationships if you want to guide your business toward future growth and financial success.

But while that may seem like a tall order, don’t worry! You don’t have to tackle it on your own.

At OfficeRnD, we pride ourselves on helping businesses create quality, collaborative workplace environments using our specially designed OfficeRnD Hybrid. It’s easy to use, feature-rich, fully integrable, and it’ll get your employees collaborating seamlessly in the office, thus boosting productivity and engagement.

So the next time you ask yourself, “How can collaboration help a business grow?” remember the KPIs it impacts. It doesn’t have to be difficult, painful, or expensive. Business growth is within reach with OfficeRnD Hybrid.

Click here to start for free with OfficeRnD Hybrid or book a live demo with one of our workplace experts.

FAQ

Why Is Collaboration Important in a Business?

Collaboration is important in a business because it helps that business grow. In-person collaboration boosts employee creativity and engagement, which increases productivity.

How Do Collaborations Benefit Companies?

Successful collaborations benefit companies by fueling innovation, saving money, increasing productivity, and ensuring growth.

What Are 3 Benefits of Collaboration?

Three key benefits of collaboration are the ability to gain and share skill sets, better handle challenges, and expand your network.

What Are Some Keys of Collaboration?

Keys of collaboration include communication, cooperation, coordination, transparency, accountability, trust, and a shared vision.