Understanding the Importance of a Great Company Culture

Companies of all sizes love to tout their company culture and for good reason. Your culture affects your employees’ productivity, morale, and engagement and—in turn—your bottom line. Yet, not every company has a good handle on what a positive company culture looks like or how to achieve it. To earn the rewards of a positive company culture, everyone from leadership on down must understand what it is and their role in it. In this blog we will look at how to understand and implement a culture that supports your business goals.

Why is Company Culture Important?

High turnover is not cost effective. According to Employee Benefit News, replacing an employee costs your company one-third of that employee’s salary. Yet, a 2018 Randstad report showed that 38% of employees want to leave their jobs due to a negative culture. That number goes up as unemployment goes down.

Reducing the high costs associated with employee turnover is just one way in which a strong company culture impacts the bottom line. It also:

• Improves performance
• Reduces absenteeism
• Attracts the best talent
• Enhances public perception of your brand

Each of these factors provides a quantifiable benefit, making company culture well worth the investment.

What Makes Up a Company’s Culture?

Though the benefits may be quantifiable, culture itself is more amorphous. Some leaders invest in
happy hours, ping pong tables, and bean bag chairs, but these perks do not a culture make. What really informs a company’s culture are its mission, values, goals, ethics and work environment.

Company Mission and Values

Every company has a mission but not every company communicates it clearly. First, ensure that your mission reflects the current state of your company and provides meaning to the work you do. Your values should relate to and support your mission. Many companies create them and communicate them in tandem. You might call upon your employees to help write the mission and values to ensure they reflect everyone’s viewpoints. Periodically remind everyone of the mission and values and keep them in mind when making all business decisions.

Company Goals

According to a Gallup report, one of the most important factors in determining whether an employee is happy in their job is a sense of ownership and control over their circumstances—and only 48% of workers are satisfied in this area. When everyone understands and works toward the same goals, they gain more sense of ownership. Communicate the “big picture” goals and identify each team member’s individual goals that lead there.

Company Ethics

Good ethics stem from keeping promises and holding people accountable. Leadership can set an example for doing the right thing. You also demonstrate company ethics through things like corporate social responsibility, sustainability, and philanthropy. Thinking about how your business activities affect the larger community can help employees feel good about working for you, as well as enhancing your brand. Give back to the community where you can.

Work Environment

All of the above contribute to a positive work environment, but the physical aspects of the office matter, too. The ping-pong table and bean bag chairs might come into play here, if they fit your company. Some companies invest in assets like stand-up or treadmill desks to support employee health, seating arrangements that foster collaboration or privacy as needed, or simply attractive decor to help people feel more at home. Some companies go as far as to offer on-site dry cleaning or car washes to help employees manage their time better.

How Company Culture Builds Engagement

A positive company culture should build and enhance employee engagement. Below are some of the ways in which the elements of company culture above influence employee engagement.

Advancement and Development

A key factor that helps employees feel engaged in their work is the promise of advancement and development. When everyone is united toward your shared mission, vision, and goals, offer them opportunities to continuously work toward those.

Internal Communication

Being able to communicate issues to their managers and leadership helps employees take ownership in their work, contributing to a more positive outlook and better job performance. Yet, one in five employees feel their manager isn’t transparent with them, according to the report The Global State of Employee Engagement. Foster good communication for better engagement.

Hiring and Onboarding Practices

Employee engagement starts with the hiring process. If a candidate doesn’t feel they’re treated respectfully during the interview process, they’re likely to worry how a company treats its employees. Treat any applicant like a future employee, and welcome new employees into your company. Let your hiring and onboarding practices reflect your company culture.

Examples of Company Culture Success

How you pursue positive company culture will be unique to your company. However, these are a few of the ways that come companies express their culture:

• Organizing group volunteer or fundraising activities
• Providing time off for volunteering
• Covering the costs of continuing education
• Allowing schedule flexibility and working from home
• Hosting social activities outside of work hours
• Asking for company-wide input on decisions
• Conducting surveys or other methods of employee feedback.

How Can Management Improve Company Culture?

A top-down approach often leads to success of workplace culture initiatives. Managers should actively demonstrate empathy, openness, and mutual respect in order for employees to feel comfortable voicing their concerns. A management styles test can help your leadership determine their strengths and weaknesses in relating to and leading your team, as can leadership coaching.

Middle management is also one of the major keys to ensuring the satisfaction of the majority of your employees. If middle managers feel pressured by job performance metrics or stress, they’re going to pass down that anxiety to their direct reports.

How to find and keep talent who fits the company culture

Creating a great culture for your employees and managers benefits the entire company. Pre-employee talent assessments can help you find employees who not only bring the right skills to the table, but who fit your mission, values, and overall culture.

To retain employees who fit your culture, assess your current retention rates and practices. Use data from exit interviews, check in with current employees, and prioritize developing your existing talent.

You don’t have to do it alone—here at InVista, we specialize in tailored assessment tools to give you the insight you need to hire and develop your talent in a way that makes sense for your business. Reach out today to get started.