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Cultivating a Strong Corporate Culture to Attract and Retain Talent
The booming economy and record low unemployment in the United States has many companies struggling to attract needed talent amid tight labor pools. In addition to this talent shortage, the digital age has engendered greater workforce mobility. Using websites like Glassdoor, LinkedIn, Facebook, and others, employees can now easily become aware of other opportunities and find a job that better aligns with their values, goals and interests.
A new survey from CareerBuilder revealed that, while 50% of workers feel like they have a long-term career at their current company, the other half feel like they just have jobs. A surprising 32% of survey respondents plan to change their jobs this year. A recent Labor Department report confirmed that these employees are in fact following through on their intentions – the number of employees voluntarily leaving their jobs is at the highest rate it’s been since 2001. To keep pace with technological advances and remain competitive, companies require an experienced workforce with institutional knowledge to maximize productivity and operational efficiency. Given these trends, employee engagement and retention have emerged as top issues for business leaders.
A recent survey of over 3,000 adult full time workers done on behalf of LinkedIn revealed that 70% of professionals in the U.S. today would not work at a leading company if it meant they had to tolerate a bad workplace culture. 65% of respondents said they would put up with lower pay, and 26% would forego a fancy title, rather than deal with a bad workplace environment. Additionally, a Columbia University study showed that only 13.9 percent of employees working at organizations with a rich company culture had high turnover intentions, whereas 48.4 percent of employees had high turnover intentions in organizations with a poor company culture. Other research in a variety of settings confirms this fact – corporate culture has a meaningful influence on job satisfaction, and as a result, employee turnover intention.
Despite its importance to employee retention, many corporations pay little attention to this aspect of their business, and effectively just let their company culture evolve as it will. This is a big mistake, especially given the fact that Millennials are now the largest generation in the US labor force. Many researchers have documented the fact that millennials desire a strong company culture, and they will evaluate this part of your organization more than anything else when deciding who to work for. In addition, Generation Z, which has many of the same characteristics as millennials, is now entering the work force in sizable numbers.
The reality is that if you don’t have a company culture that is strong and appealing, you’re going to start losing key employees to competitors. In this blog, we’re going to discuss key best practice tips to help your organization develop an appealing corporate culture that will serve to attract and retain the best talent.
What is Corporate Culture?
It is hard to put measures in place to improve your company culture if you can’t define and/or describe it. As such, the first step in developing a strong and appealing company culture is to get a handle on what it is. The idea of defining a culture can be a little challenging, however, as culture is really a dynamic concept – cultures can change over time in response to both internal and external factors.
According to Entrepreneur.com, corporate culture is “a blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time.” Corporate culture is really the personality or work atmosphere of the organization from the perspective of its employees. It’s the shared values and beliefs that help employees understand the ways in which the organization functions and provide guidelines for their behavior when at work.
While every culture is unique, there are a number of key elements that define a corporate culture, and it is important to maintain consistency in these elements in order to develop an appealing and cohesive corporate culture that serves to boost employee retention:
- Vision and Mission – All great company cultures have a compelling mission (what the company does today) and vision (what the company wants to be/do in the future) that provide a strong sense of purpose for employees as they go about their day-to-day activities.
- Values – Values are at the core of a company’s culture. While the mission and vision statements enunciate the company’s purpose, the company values are a set of guidelines that employees are encouraged to adopt in order to uphold company standards and help achieve the company mission and vision.
- Actions – You can have the most inspiring vision and values in the world, but if the company actions are not a reflection of the vision and values, then your company culture will suffer.
- Leadership – Companies with good cultures have strong leaders who actively share the company mission and embody the company values and vision in everything they do.
- Company Story – What is your company’s unique history or story? The ability to communicate that story to both new and current employees in a passionate and compelling way is a core aspect of a good company culture.
In essence, a strong corporate culture will seep into everything the company does and ultimately help define brand image, along with how the company is perceived by employees, customers and even shareholders.
Tips for Creating a Culture That Enhances Retention
Companies like Google, Netflix and Zappos are renowned for having created a strong corporate cultures. Google, for example, has focused on creating a corporate culture that is fun and flexible with an emphasis on creating camaraderie among colleagues. The company is known for having many different perks on their “campuses” – play areas, coffee bars, free meals, dog friendly work environments, gym memberships, bowling alleys, outdoor terraces, etc. While this kind of open and flexible culture works well for a company that needs to inspire creativity and innovation in its employees, it may not work for companies in different industries, regions, or those with smaller budgets (e.g., a manufacturing facility). Different types of companies will likely function best with different cultures. The bottom line is that there is no single best corporate culture – there is only the culture that works best for your unique company.
While there are many different types of corporate cultures, there are common best practices that can be applied by all companies to build a positive culture:
Conduct an Assessment of Your Current Company Culture. The first step on the path to improving your company culture is to conduct a current state assessment. Start by listing the attributes that you want your culture to promote, and then follow up with a survey of your employees to measure to what extent they think those characteristics are present in your company culture. In addition, new talent management software tools are emerging that help organizations assess, monitor, and manage employee sentiment and culture. These tools can assist your leadership team to get a handle on the level of employee engagement in your organization, as well as determine when problems are arising.
Consider Culture During Recruiting and Onboarding. Most companies do not adequately take into consideration cultural fit when recruiting candidates. It’s not enough to just read a resume and interview a candidate for an hour. Have candidates meet with several people in your organization and allow them to get a feel for your culture. These meetings will also allow you to get to know the candidate better to see if they are a good fit. In addition, onboarding new employees should include immersion into company values and culture. While the first few weeks on the job are the best time to clarify key aspects of your company culture, the onboarding process should include consistent contacts over the course of the first year to make sure your new hire is still engaged.
Lead by Example. A strong company culture starts at the top. The companies with the best cultures have leaders who embody it. You can talk about your company culture all day long, but if your leadership team does not walk the talk, employees will sense the disconnect and lose respect for the organization. On the other hand, if your leadership team embodies a work culture that is aligned with the company’s mission and vision, that culture will ultimately become part of the company DNA.
Communicate Passion and Purpose. Instead of just communicating passion for the bottom line, companies with strong corporate cultures communicate passion for their mission and vision, while staying true to their core values. The fact of the matter is that purpose-driven employees find their work deeply meaningful. Employees tend to stay with a company when they resonate with the company vision, mission and values. Companies with successful corporate cultures typically have strong leaders that naturally inspire employees and help them make the connection between the work they do every day and the company’s mission and values.
Value Employees. One of the most important values a company should have is to value its employees. The companies with the best corporate cultures consider employee happiness every bit as important as customer happiness. Towards this end, it is important for companies to demonstrate they care with actions in addition to words. A few key ways to demonstrate that employees are valued and thus boost morale include:
- Strong workplace benefits (PTO, parental leave, gym memberships, health insurance, etc.)
- Competitive compensation packages
- Promote work/life balance and flexibility
- Professional development programs
- Hire/promote from within when possible
- Profit sharing
- Provide opportunities for employees to offer feedback and take it seriously – nothing is more stifling to health company culture (and overall company success) than when employees are afraid to disagree with a superior
- Employee recognition programs
A fundamental part of creating an appealing corporate culture is making it clear to employees that management values and cares about them and their future.
Foster Connection Between Employees. A strong workplace culture requires employees to be connected with each other in positive ways. Studies have shown that close friendships at work boost employee satisfaction by 50%, and that people with a best friend at work are 7 times more likely to engage fully in their work. Employees are generally highly motivated to stay in their jobs when they have coworkers that they enjoy being around. As such, companies seeking to build an appealing company culture should strive to create events and gatherings where employees can connect with co-workers to build relationships.
Learn How to Manage a Multi-generational Workforce. Many companies are now employing a workforce that spans four different generations, and each one of these groups has developed somewhat different values, motivations, perspectives, communication styles and work habits. With four distinct generations now working side by side to solve problems, make decisions, design products and serve customers, managers are having to rethink many common practices in order to create a unified team. It is critical for today’s managers to employ best practices for creating a cohesive multi-generational workforce.
Embrace Learning. Everyone makes mistakes and/or is wrong sometimes. A culture that focuses on learning from mistakes rather than being punished for them will flourish.
Today’s expanding job market combined with social media providing more corporate transparency has served to shift power from the employer to the employee. As a result, competition among US companies to attract and retain talent has never been fiercer. Many organizations have realized that building an appealing corporate culture that stays intact as the organization grows and evolves is essential for good talent retention.
Realizing that corporate culture is important is the easy part, however. Building a strong corporate culture requires commitment and will take time, energy and resources. That said, those corporations that take the time to apply the principles discussed in this blog are paving the way to dramatically boost employee retention and will thus have a significant advantage over their competitors as we move deeper into the digital age.