To Boost Your Profit Margin, There’s Another Margin You Need To Focus On

A company’s measure of success is usually determined by its profit margin, or bottom line – but focusing on another margin also makes good business sense.

What is this other margin?

According to physician and author Richard Swenson, “Margin is the space between our load and our limits. It is … the place we go to heal, to reflect, to recharge our batteries, to focus on the things that matter most.” (Margin: Restoring Emotional, Physical, Financial, and Time Reserves to Overloaded Lives)

When employees complain of a lack of “work-life balance” – what they really are talking about is a lack of margin, or personal breathing space, between intense work and rest periods.

Why does personal breathing space matter?

In today’s constantly connected, 24-7 society, work often seeps into every hour of the day, leaving us checking e-mails over dinner with our families, talking to a client on the phone while sending the kids for swimming lessons, or replying text messages during a date with a significant other.

But often, working around the clock doesn’t lead to more productivity (as hoped for); in the long run, burnt out employees are less productive and take longer to recover.

Personal breathing space gives people time to recharge and reset their emotional and physical reserves before emptying it completely – it keeps busyness from turning into burnout.

For some people, personal breathing space can be 15 minutes of meditation a day, scrolling through social media updates every two hours, a regular family dinner night, or even a weekly rock climbing session with friends.

The quality and amount required will vary from person to person – the key is having a sustainable rhythm, alternating between periods of busyness and periods of enjoyment.

Regular breaks encourage problem-solving skills

Many people neglect this personal breathing space, thinking that a year-end getaway is enough, but our bodies were made for regular downtimes, not just an annual holiday.

In the book Creativity and the Mind, the authors’ research proved that regular breaks significantly enhance problem-solving skills by giving us the ability to step back and see things through fresh eyes – a process researchers call “incubation”.

Our brains work in two modes: the “focused” mode and the more daydream-y “diffuse” mode.

While the focused mode allows us to concentrate on a singular task at hand without getting distracted, it is the diffuse mode that allows us to see connections between seemingly unconnected things and come up with novel ideas and solutions.

This can only happen when we are in a relaxed state, according to science writer and journalist Jonah Lehrer.

Good work-life balance increases profits

According to a 2010 study by UK consultancy Morgan Redwood, organisations which help their staff achieve a good work-life balance earn an astonishing 20 per cent more per year from each employee.

Besides increased profits, emphasizing on a good work-life balance also reduces turnover, leading to increased savings in HR and administration costs.

In Sydney, a leading law firm estimated that it would cost about $80,000 to replace a solicitor with two years’ experience who did not return from maternity leave, but only $15,000 for 12 weeks’ paid maternity leave.

Likewise, sending a top performing employee (who has been pulling long hours) on a paid vacation will cost much less than replacing a talented employee who resigns due to burnout.

Finding work-life balance without compromising on performance

Yahoo CEO Marissa Meyer (who is also a mother juggling between work and family), says that “burnout isn’t caused by working too hard, but by resentment at having to give up what really matters to you.”

She adds, “When people are able to have what matters most to them, it fuels them to work really hard for a really long period of time.”

To create a thriving work environment that supports employees’ work-life needs, companies need to go beyond providing ‘perks’ like a supply of free food, laundry service, a ping pong table, and generous overtime wage.

Such perks could actually send the subtle message that employees are expected to stay back and work long hours since everything is provided for.

Instead, employers should focus on respecting what matters most in their employees’ personal lives –whether it is family, fitness, further education, or passion projects – without compromising on performance at work.

How top companies are encouraging personal breathing space

Here’s how some of the top companies around the world are encouraging employees to create more margin in their lives:

  • Cash to take time off work
    At software company Evernote, employees were offered a $1000 stipend to take a full week off at a time.
    Phil Libin, CEO of Evernote, said: “We don’t pay people hourly. We’re paying you for your mind. What makes you more productive is what you should do.”
  • Yes, you can work late, but you’ll have to make do without a desk. Heldergroen, a Dutch design firm headquartered in Amsterdam, has desks that are connected to ceiling beams via steel cables.
    After 6PM, all desks and everything left on them are lifted to the ceiling and the floor space is leased free of charge to local community groups for dance and yoga classes, or even to employees who want to host a dinner party or an open mic session.
  • Have plenty of vacation time while keeping productivity up – it’s possible! NYC-based non-profit organization TED (creator of the famous TED Talks) shuts down its office for two weeks in the summer and one week over Christmas, plus gives all employees a fourth week to take off at any time they choose.
    This gives everyone plenty of vacation time but keeps the company productive by synchronizing a bulk of everyone’s leave time.
  • We don’t call it ‘moonlighting’, we call it a side hustle. Instead of just focusing on rest and downtime, file hosting company Dropbox recognizes that pursuing other passions on the side can also have a rejuvenating effect on its employees.
    The company encourages employees to work on their side projects as a way to take a break during their work hours, and holds an annual “hack week”, where employees can be in the office but work on anything they want, including personal, non-work related projects.


Given today’s tough economic climate, where retaining good talent and maximising profits is more crucial than ever, why not focus on helping your staff find more margin in their lives?

You will be rewarded with happier, more loyal, and more productive staff, at a time when good talent is scarce.

But not only that, you’ll see the rewards in your bottom line as well.

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