It Really Pays to Have a Rich Company Culture [Infographic]
"Culture" has been a buzzword in the corporate world for several years, but what does it mean and why is it important? Entrepreneur.com defines company culture as "a blend of the values, beliefs, taboos, symbols, rituals and myths all companies develop over time."
In other words, company culture is the personality of an organization from the employee perspective, and includes the company's mission, expectations and work atmosphere. Whether it's written down, symbolized in the business logo, or simply an unspoken but understood definition, culture determines a company's environment.
An often-cited example of good company culture is Google. With an employee count of 47,756, it hardly qualifies as a mom-and-pop shop, and yet people who work there describe it as having a small-company feel where no one hesitates to "spike a volleyball across the net at a corporate officer."
But the culture of a company is not just about whether you're allowed to chuck balls at your boss -- it's also determined by what the company stands for and how it treats others. Google gives back to the community as well as to countries around the world in the form of financial aid and restoring public parks, with Googlers volunteering their time.
The link between employee happiness and productivity.
Statistics show that a company's culture has a direct impact on employee turnover, which affects productivity, and therefore success. A Columbia University study shows that the likelihood of job turnover at an organization with rich company culture is a mere 13.9 percent, whereas the probability of job turnover in poor company cultures is 48.4 percent.
The reason for this is simple: unhappy employees don't tend to do more than the minimum, great workers who don't feel appreciated quit, and poor managers negatively affect workers and productivity.
In Rob Markey's Harvard Business Review blog post, "Transform Your Employees Into Passionate Advocates," he states, "Loyal, passionate employees bring a company as much benefit as loyal, passionate customers. They stay longer, work harder, work more creatively, and find ways to go the extra mile. They bring you more great employees. And that spreads even more happiness -- happiness for employees, for customers, and for shareholders."
The link between employee happiness and profit.
Although you don't have to be a math whiz to understand the correlation between happiness and productivity, the Department of Economics at the University of Warwick found that happy workers are 12 percent more productive than the average worker, and unhappy workers are 10 percent less productive. In fact, unhappy employees cost American business over $300 billion each year. So it literally pays to make sure your employees are happy.
Statistics from New Century Financial Corporation indicate that employees who are actively engaged in their job, i.e. happy, produce better results. For instance, account executives at a banking company who were actively disengaged produced 28 percent less revenue than those who were engaged. On the other hand, companies with happy employees outperform the competition by 20 percent, earn 1.2 to 1.7 percent more than their peer firms, and are 2.1 percent above industry benchmarks. Happy workers are also more likely to solve difficult problems faster.
Negativity and the bottom line.
Are you starting to see the picture? Unhappy employees are disengaged at work, which leads to negative attitudes and low productivity, and ultimately affects your business' bottom line.
In fact, low-level engagement within companies results in a 33 percent decrease in operating income and an 11 percent decrease in earnings growth, whereas companies with high-level engagement have a 19 percent increase in operating income and a 28 percent increase in earnings growth.
Your business can stand out from the crowd by making use of your greatest asset: your employees. Marketing Innovators makes it clear that satisfied employees equals satisfied customers, who then spend more on your service or product and provide free marketing via great word of mouth.
They say that money can't buy you happiness, but according to the data, happiness sure can buy you money, so to speak.
Company culture makes a difference!
Beyond keeping employees happy and productive so that they positively affect your revenue, having a great company culture can encourage solutions, inventions or innovations that might not have come to light in a more oppressive environment. When a worker feels valued and respects their organization, the productivity possibilities are endless.
It's clear that there is an exceptionally strong case for company culture. When your organization's culture is in alignment with your goals and you hire people who share your values and enthusiasm, you are paving the way to financial success and building an outstanding reputation.
I've made a company culture cheat sheet that summarizes the key points and lists every link in this post for easy reference. Save it to read later or email to coworkers. Get the free bonus here.
So what are you doing for your company culture?
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