The Impact of Company Culture on Employee Retention
As companies everywhere continue their quest to become lasting brands, there’s more and more evidence that those performing best financially also perform extremely well when it comes to company culture. A recent study by the Boston Consulting Group reveals that leadership and talent management performance strongly correlate to financial performance. Companies that rank highest on 20 leadership and talent management capabilities increase revenue 2.2 times faster than companies lagging on those capabilities. And guess what one of the six talent management capabilities is? Culture.
The idea of using a soft measure like positivity to benchmark a company’s performance would have been laughable not too long ago. The culture and performance corollary were confined to a small group of “out-there” and “wacky” anomalies like Ben & Jerry’s. But now, company culture is being given its proper due. Every company should recognize a few absolutely critical things related to their ability to be competitive with culture, and the ways it can increase employee retention.
1. Culture is Your Secret Weapon
The world is becoming more technically driven. Nearly every company has an element of tech within its foundation, so we’re seeing a huge push for those kinds of jobs, and the jobs in marketing, sales and finance that support them. So why should a top engineer or project manager or CTO go to a less prestigious company over a huge employer that pays well and offers big stock options and more prestige? The difference is going to be in what the culture of that company stands for and how well it is communicated.
2. Employers Need to Communicate Their Brand Ahead of Time
It isn’t enough for employees to get a sense of the company when they step in the office for an interview. By then, they’ve already made certain judgments about what the company stands for. Of course, a true understanding of the company’s culture actually happens when employees are working and are part of the action on a day-to-day level. However, conveying your company values, being clear on your mission, and finding creative ways to demonstrate your uniqueness and how it relates to your workforce can create a baseline level of trust.
3. Culture Needs to be Reinforced
The company culture needs to be driven by the top leadership and reinforced within the norms of the way people behave, communicate, and interact. It isn’t enough to say you have a culture (there’s an old adage about “knowing it when you see it”). Employees will easily see through a positive climate that’s only brightly colored walls, open offices, and happy hours.
The key is to make these critical drivers of corporate culture a foundational asset for an organization. Focus on the results that you want and then look backward to the ways that can actually make them happen.
4. Define Your Company's Value Proposition
What is it that your organization does that nobody else can do? What is the unique value proposition that you hold over the marketplace? What does your company do that makes the competition irrelevant? That is your unique value proposition.
That value proposition then gets baked into the goals and objectives that every leader, team, and individual is focusing on. For example, at our company Emergenetics, we’re trying to grow quickly and responsibly in certain key market segments. Everyone in our company—from our CEO to our newest hire in our Singapore office to myself—knows exactly how much we want to grow and what markets we’re focusing on. And we know what our company does to make us unique.
5. Celebrate Your Unique Employees
The next key, and this is where culture starts to become real, is in motivating and driving employees to make this happen. Everyone is different, and I’m not just speaking about their roles and responsibilities. I’m talking about the way people work. What makes them tick? What motivates one employee? Would that motivate another? Zeroing in on exactly what employees want is where a climate of positivity, productivity, and collaboration can propel individuals, teams, and whole organizations forward.
Focus on those two keys—what makes your company unique, and what makes your employees unique—and you’ll be on your way to knowing what cultural initiatives will propel your organization forward. There are several factors that contribute to an employee “clicking” within organization. Part of it is job fit, part is raw smarts, part is employee motivation, and part is fit to the culture. When a unique company pairs itself to each employee’s unique wants, everybody wins.
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