Many business experts argue that the primary purpose of a business is to produce financial returns for its stakeholders, but many organizations also pursue a number of non-financial objectives. Though these items may not appear to directly contribute to the organization’s bottom line, non-financial objectives can help improve a number of metrics critical to the company’s success.
Organizations depend on their workforce to succeed in the market, and organizational leaders must make a priority of recruiting and retaining the best available employees. Many companies post recruiting and retention objectives for their human resources departments, and may make a number of monetary and non-financial benefit options available to increase employee satisfaction. These options range from familiar packages like healthcare and training programs to more employee-centric offerings like childcare assistance, training and development programs and retirement planning. Organizations that retain top talent can capitalize on employee abilities to improve product offerings, implement market strategies and otherwise ensure the company’s success.
Just as most companies depend on their employees to generate financial success, organizations also depend on income from customers who buy the products and services. Recognizing the risk of reduced revenue if quality problems drive customers to competitors, many businesses implement rigorous quality standards and measure customer service results through numerous statistics and metrics to ensure customers receive the best possible products and service. Non-financial objectives like the percentage of faulty products or the time taken to answer customer calls help organizational leaders gauge the effectiveness of customer service programs, and many companies constantly assess their customer service objectives to ensure customer satisfaction.
Though customers and employees represent two primary stakeholder groups for most organizations, business leaders must take care to maintain relationships with many other stakeholders like investors, creditors, suppliers, managers and even legislators. According to Margaret Woods, a columnist with the Association of Chartered Certified Accountants, many organizations use non-financial objectives to manage relationships with these stakeholders. Some organizations, for example, may have an objective to host or promote a specific number of manager recognition events each year, and some organizations may have an objective to conduct periodic pricing and quality reviews with suppliers.
Many organizations have non-financial objectives that deal with benefiting their local communities, according to the consulting organization HVS. These objectives may include public exposure events that promote the company’s brand or service events that fill a need in the community. These events help boost the organization’s bottom line by creating brand awareness and building goodwill among potential customers, and can help solidify relationships with investors, employees and other stakeholders. As an added bonus, according to HVS, local governments often benefit from increased tax revenue from events with vendors or that produce sales for the sponsoring company.