The moat, instead, becomes your people.

Great Place To Work® found that higher levels of trust drove as much as 7.5 times higher revenue growth for small businesses (10 to 99 employees) and 3.4 times higher for medium-sized businesses (100 to 999 employees).

When you talk to business leaders from the Fortune Best Small and Medium Workplaces™, you immediately understand why they experience the Great Place To Work Effect. They treat culture as a business strategy, rather than employee perks.

In an era of AI abundance, high levels of trust make people want to stretch their skills, stay with the company, and create new intellectual property (IP).

For e.l.f. Beauty, a beauty company based in Oakland, Calif., the vision goes beyond its suite of products. “We make beauty products, but we don’t necessarily like to consider ourselves a beauty company,” says Kerry Preston, vice president of people development.

The company takes inspiration from bold disruptors outside the beauty industry and wants to compete in a broader marketplace. That only happens because employees are willing to stretch and contribute outside of their narrow field.

“We stretch beyond our lane,” Preston says. “I may be in charge of the people development function, but I have eight years of commercial experience. I’m adding my perspective where I think we could make a difference.”

As a result, 96% of employees at the company are proud of their work, and 93% say the company is a great place to work.

For Stellar Solutions, a global aerospace and systems engineering provider, there would be no business without the unique relationships and reputation its employees have within the industry.

“We don’t have a traditional business development function,” says Sara Walker, senior director, people and corporate strategies. “We have never needed one because growth comes from relationships and network connections.” For example, when an Air Force lieutenant colonel retires and gets a job with a defense contractor, Stellar Solutions has people who deployed with them or worked together on another project where they built a working relationship.

“Cold calling in this industry would never work,” Walker says.

Care drives retention

For Lucid Software, the company behind Lucidchart, Lucidspark and other tools, its people are the most valuable part of its business. “My IP walks away every night when people go home at the end of the day,” says Brittany Call, vice president of people operations.

For all these companies, retaining and engaging employees is mission-critical for business success.

“We’ve calculated how much money it costs when you do have to replace a worker,” Call says. “When you factor in recruiting expenses, lost productivity, and the ripple effect on team morale, it becomes clear that retention isn’t just an HR goal; it directly drives overall business success.”

Listening that changes your business

Caring starts with listening.

“When we act on feedback from our engagement surveys, it creates a better workplace for everyone and drives high retention across the board. Tailored initiatives like fertility support are a great example of how acting on survey data directly strengthens our female retention,” Call says.

It’s not just women at Lucid: A whopping 97% of employees say they feel cared for.

For a company like Stellar Solutions, extraordinary care can be found in its commitment to every employee to pursue their “dream job.” Once a year, team members fill out a dream sheet, and there are ongoing conversations with leaders about what might improve a job, from scheduling challenges to growth opportunities.

Nearly all (98%) of employees say they are offered the professional and development training they need at Stellar Solutions.

At e.l.f. Beauty, every employee gets equity every year, part of CEO Tarang Amin’s belief in having a team of passionate owners running the business. Amin writes handwritten notes to every single employee when issuing the equity grant.

“How we take pride in working for e.l.f. for me is a direct reflection of our leadership team,” Preston says.

Engineering stronger relationships

The Best Workplaces don’t leave camaraderie to chance. They intentionally build connections.

At e.l.f. Beauty, the company believes in “zero distance,” opening the C-suite to both employees and consumers. Its CEO goes live on TikTok to get feedback from the community and ask questions. Its chief financial officer teaches financial literacy on Twitch, with thousands of viewers tuning in to learn.

At every office, the company hosts a “family lunch” weekly with pizza or other cuisine, and everyone is invited to sit down and connect. “Everyone is a part of one team, and you sit down, and you share pizza,” Preston says. “It doesn’t matter who you are; you’re sitting next to our C-suite.”

At Lucid, team activity budgets have been expanded, and the company invests heavily in helping people connect with colleagues. “At any given time, 50% of our population is engaged in our cross-departmental mentor program,” Call says.

Meeting a human need

What makes a company special isn’t the benefits or the perks. Instead, it’s the willingness to solve problems that arise, even when they aren’t the direct purview of an employer.

Walker at Stellar Solutions is often most proud of the personal touch company leaders can give to an employee. When she learned that someone’s spouse had been affected by a layoff, she helped send out her resume to headhunters in her network. “It’s just looking at the entire person and saying, ‘What does this situation need and do we have the resources?’” Walker says.

Her advice: “When you spend time on people, they feel valued. We can fabricate almost anything. We can fabricate gifts, recognition — but time is not repeatable.”

Think you belong on this list next year? Start here.

Ted Kitterman is a content lead at Great Place To Work®.