About 63% of US companies find it harder to retain than hire workers. Why is this? One of the major reasons is due to company culture. Whether intentional or not, every company has a unique culture. A company’s culture is the personality of your business. It plays a vital role in how employees behave and how the public perceives the organization. It can determine employee retention, productivity, and quality of service.
What is Company Culture?
Company culture is defined as a shared set of company goals, practices, and general attitudes. It is something outside of a formal program but rather the environment and feel in the workspace.
A company’s culture can be represented in its core values and behaviors, the support provided to employees, and the atmosphere of the work environment. It shapes everything the organization does, from how problems are solved to how employees feel they are treated. It also encompasses public perception of the organization.
Think of a company and what they seem to value. Whether it’s the innovative and creative spirit of an animation studio or a local restaurant's welcoming and comfortable atmosphere, that perception is the company’s culture.
An organization's culture is influenced in four areas:
- Working Environment or the setting, social aspect, and conditions in which an employee performs a job.
- Company Leadership. The quality and effectiveness of leadership is one of the most impactful components of company culture. A leader becomes the spokesperson of the organization as a whole as they implement objectives and develop relationships.
- Company Goals. As these represent the larger purpose for employees to work towards, they will impact the focus of the organization.
- Company Core Values. These are the principles, clearly stated, that guide an organization's vision, mission, and goals. Core Values are foundational to distinguishing culture.
Why Company Culture Matters
To put it simply, every company develops a culture. A company without a defined culture leaves the opportunity for employees to create one for it. According to James Sudakow from INC,
“If people in your company don’t have the skills to behave in the way that supports your culture, you’ll end up with behaviors that undermine it. As much as your people need to be skilled on the technical side of things, they need to learn how to work in the culture you want. This requires investment in building those things.”James Sudakow, INC
A company that lacks a strong culture is set to fail. Without a strong, positive culture, companies will be negatively impacted.
Company culture impacts an organization in the following ways:
- Employee retention
- Leadership effectiveness
- Employee satisfaction
The organization’s culture drives what type of employee you attract. For 46% of job candidates, an organization's culture is an important factor when considering accepting a job. Furthermore, 88% of job seekers choose to avoid companies with a bad reputation.
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In contrast, a company with a positive well-defined culture sees a 202% increase in employee performance. Their employees are more engaged, loyal, and willing to work through issues as they arise. Furthermore, these companies see a staff that works to grow and appeal to its customers with exemplary service.
The Benefits of a Positive Company Culture:
- Increased employee retention. Employees who feel happy at work are more likely to build loyalty to the company. They will be more likely to remain. As employees remain, this will reduce the amount of time and money spent on unnecessary turnover.
- Improved success and productivity. As employees understand the expectations, they will become more productive. They will be more likely to go the extra mile for a company they enjoy working at.
- Enhanced talent acquisition. A well-defined corporate culture will be more likely to attract talented employees whose values align with the organization.
- Enhanced reputation and quality of services. An inclusive, diverse, and safe workforce culture for staff builds trust and authority. This will be reflected in the services rendered, providing improved services.
Signs of A Toxic Culture
While every company will have varying opinions of the work environment, when there are common negative characteristics, it is probably a sign of a toxic culture.
What is a Toxic Company Culture?
These are work environments where practices, policies, and management styles foster unhealthy relationships and habits. In these environments, employees are made to feel punished, rejected, guilty, and defensive.
In these conditions, employees will find themselves unhappy, dissatisfied, and feeling the need to look for jobs elsewhere.
Signs of a Toxic Company Culture
To create a strong organizational culture and improve business longevity and business success, you must be thoughtful about the type of culture within the organization. It is important to be vigilant in working against any manifestations of toxic company culture.
Here are some signs to help you identify poor company culture:
- The company does not have a list of core values
- The company has core values, but managers do not follow them
- The workplace is plagued with gossip
- Competition is unfriendly among employees
- There are frequent absences and tardiness
- Employees work late or don’t take lunch breaks often
- There is no DEI policy
- Little to no hiring from within
- High employee turnover
- Employees lack enthusiasm for their work
- There is role confusion and dysfunction
- Employees experience chronic and excessive stress
Signs of a Healthy Culture
A positive culture is an authentic representation of company values. It stays consistent with those values and goals, finding ways to encourage employees to do the same.
Additionally, pay attention to what those values represent. A focus on productivity and not hours fosters the ability to produce quality work instead of the complacency of clocking in and out. If employees are productive, that may demonstrate a positive workplace culture.
When addressing an organization's culture, you can ask yourself some of the following questions: Do employees feel autonomous? Are they passionate? Do they have a healthy work-life balance? Do they seem happy? These questions will lead you to understand whether or not the culture is healthy.
Here are some other signs of a healthy company culture:
- There are multiple long-term employees. Happy and engaged employees are more likely to stay.
- Employees are friends. A company with a supportive, encouraging environment will find their employees have more friendships with each other.
- Communication is clear. From the top down, communication is transparent, and employees understand where they and the company stand.
- Leaders are supportive. Available, honest, and supportive leaders foster collaboration and success.
- Diversity is appreciated. The organization values all perspectives, ideas, and backgrounds.
- Employees are celebrated. A company that celebrates personal and professional accomplishments will foster an encouraging and healthy culture.
How to improve company culture
Developing and maintaining a healthy company culture will take continuous efforts. All organizations will need to be vigilant in looking at the various indicators of company culture and finding ways to improve. These improvements can be supported through discussion and outlined by HR leaders in various forms of documentation.
10 Ways to Improve Company Culture:
1. Hire Quality Leadership
An effective leader will help their team feel better by understanding each team member and their workload. A talented leader will need to be a role model for the company's values. They also will be able to connect to, recognize, and empower their employees.
2. Establish Core Values
Decide what you want to be at the heart of your company. What phrases do want others to associate with your company? Examples of core values are:
3. Set Clear Goals and Objectives
Creating achievable personal, departmental, and organizational goals will create a vision for all members of the company to follow. Consider developing value statements to help your staff see how their individual performance will play a role in attaining the goals.
4. Encourage Teamwork
Teamwork plays a vital role in creating a healthy company culture. Teamwork directly works against unhealthy competition in the workplace. When a team works together, they share ideas and responsibilities. Collaboration helps alleviate overall workplace stressors, and your company's employee experience improves.
5. Utilize Employee Feedback
One of the major ways to foster a healthy company culture is through employee feedback. Listen to them. Their feedback will help you understand if their needs are being met and if the culture aligns with what you intend to promote.
6. Improve Communication
Evaluate whether or not the organization is providing clear, open, and accessible information to all employees. Management, employees, and leadership should be able to access each other to discuss questions and concerns. Eliminating internal communication barriers between the various levels of a company will lead to greater employee satisfaction.
7. Foster an Environment of Workplace Appreciation
All members of the organization want to feel their work is appreciated. In fact, “69% of employees would work harder if they received more recognition.” Employees should feel appreciated.
Showing appreciation can be by a shout-out in weekly meetings, creating incentives for meeting goals, or sending a group card.
8. Create an Inclusive Environment
Find ways to celebrate the differences in your team. Those differences will allow colleagues to learn from each other, gain exposure to new mindsets, and expand their perspectives. The more inclusive an environment, the greater your employees will feel they bring something unique to the table. Inclusivity will increase problem-solving and, in turn, meet the needs of a larger variety of customers. However, the greatest impact of promoting inclusive language and engagement will be that your employees feel safe in your organization.
9. Nurture Wellness
Create initiatives that look out for your employee’s well-being. A healthy company culture recognizes that employees are full people outside the workplace. They have needs, interests, and responsibilities. To avoid employee burnout, find ways to encourage healthy habits. Foster a work-life balance, so employees know you value their physical and mental health.
10. Development and Promotion
One of the biggest detriments to healthy company culture is the feeling that there is nowhere to go. Employees will become dissatisfied and lose interest in the job if they feel like they cannot grow within the company, they
To combat this, provide opportunities for employees to develop new skills and become experts in their field. Encourage them to become leaders within the company by meeting milestones and performance rates.
Company Culture Plays a Vital Role
Whether intentional or not, the culture within a workplace will impact its overall success. As you focus on employee experience and developing a healthy culture, your company will see increased appreciation and collaboration between leadership and employees. The organization will find itself with a higher morale and a higher caliber of employees.
Your efforts to build and maintain a healthy culture will significantly benefit employees, and you will find more people eager to work for the organization.