Why a Positive Company Culture Is the Key to Employee Retention
As a business leader you have to talk the talk when attracting and hiring new candidates, but also walk the walk when implementing a positive working environment.
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Even though you can't see it, your company culture is a real and tangible thing. But it is only when it starts to slip or begins to feel toxic that you may sit up and pay attention. It can be the maker or the breaker of a company and needs to be carefully nurtured from the very beginning.
Take a look at the recent story about Revolut, one of the U.K.'s fastest growing fintech startups. When advertising for job vacancies, the company said of its competitors: "You're nothing but a number to them with dollar signs attached." This may speak as a company setting themselves apart and putting their people first. Scratching beneath the surface, however, there is a different picture being painted. Impossible targets and high-staff turnover are said to be rife.
This is no position that a company wants to find itself in, no matter what size you are. Poor company culture can not only affect your staff retention but also reputation and your bottom line. In fact, our own study found that staff turnover due to poor company culture is costing the economy £23.6 billion per year. The fact is, the culture that is established when you are at 20 employees is near impossible to shift once you reach 800.
It is no easy task to maintain, or indeed change, a company culture that you have produced -- whether that was consciously or not. This becomes even more pertinent as your company grows. Look at Uber, which found itself in the midst of controversy involving bullying, discrimination and several lawsuits. Its CEO has since come out and stated his intent to change the culture by "doing the right thing" by not just focusing on growth but also on transparency and partnership.
As a business leader you have to talk the talk when attracting and hiring new candidates, but also walk the walk when implementing a positive working environment. This will, of course, benefit not only your profit, but most importantly, your people.
Start the process early
I have learned for myself as a founder that you are in a unique position to influence the culture you want to see. When a company is in its early stages, the culture that is established will be that of the founders. This is a process that will happen naturally and likely without you knowing and won't require much effort.
Be mindful that a founding team's values are likely to be aligned. It's why you went into business together. Whereas well-funded and high growth startups may have the time and resources to spend on investing in their culture and putting plans in place for managing this while they grow, for others it is important to bear in mind how the changing roles of established leaders will affect the culture in the long term as their company scales.
Clearly define your values and purpose
So, you have established the culture that you want your business to embody. As the company grows, there needs to be a concerted effort to be more deliberate about the defining values that you operate under.
You may be scratching your head at what your purpose is, could or should be. If this is the case, you are not alone. As a first step, take into consideration how to make all aspects of your business part of a meaningful mission. Are there any hooks that are at the heart of your organization that really engage your employees? This is the core of your values and what will make people stick around.
Essentially, for an organization to successfully create and maintain a positive company culture, leaders must be clear on what they want from their people. Vitally, founders need to document and share this with all new joiners to the company. Not only will this make it clear what kind of environment they are joining and what is expected of them, but will also provide a valuable reminder to longer serving members of staff.
Walk the walk
The story of culture is tied up with that of leadership. Of course, it goes without saying that founders should live these values if they want their culture to be taken seriously. It is inevitable that when your business is established and flying, you may find yourself in a more hands-off role. This doesn't mean that the culture you have worked so hard to establish then sufferers.
Our study found that 50 percent of people do not trust their business leaders due to a lack of transparency. To mitigate this, visibility is key. This can be as simple as making yourself available by booking in time for one-to-one catch ups, to check in with individuals. Or, ensuring that information that affects the business as a whole is communicated in a timely way. It is often the smaller things that mean the most to those working for you.
Take these steps on board and if you are leading by example, and living and breathing your culture, your employees will too.