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Is company culture holding your business back?

A friend of mine is going through a tough time, work-wise. What was once a modern, dynamic, progressive workplace has undergone a major culture shift in the past 12 months, as jobs have been moved offshore, incentives have been removed or reduced and communication about these changes has been close to nonexistent.

This cultural shift has sparked something of a mass exodus from this company, with a number of employees fleeing to competitors. My friend is aiming to do the same, as soon as an opportunity presents itself.

“I don’t even care if I end up getting paid less. I just want to get out of here.”

This attitude – that a positive culture trumps money – isn’t an uncommon one. According to Leigh Branham, founder of Keeping the People Inc, only 12% of employees leave their job for more money.

The effects that a negative culture can have on your organization are myriad. Companies with engaged employees outperform those without by 202%. Turnover at companies with poor culture averages at a whopping 48% – and in the US alone, turnover is costing companies $11b annually.

The good news is that a lot of workplaces (my friend’s employer notwithstanding) are realising that focusing on employee engagement and company culture is a necessity in modern business.

If you’re not sure whether or not you’re encouraging a positive culture in your workplace, it’s worth remembering that a positive culture is rarely (if ever) something that happens accidentally. If you haven’t given much thought to developing the culture in your workplace, or boosting employee engagement, then there’s a good chance that there are some cracks that need to be addressed.

That said, there are a few key warning signs that your employees are unhappy or disengaged. If any of these sound familiar, don’t panic – we’ve got some tips on how to begin the healing process below.

Warning sign #1: High turnover

I’ve already mentioned that, for companies with a poor culture, the average turnover rate is 48%. While turning over nearly 50% of your workforce in a year is clearly a staggeringly high number, it doesn’t tell us much about what your turnover rate should be.
In 2014, turnover rates came in at an average of 15.7%, up slightly from 15.1% the previous year. These rates were slightly higher in some industries (higher in hospitality, lower in utilities) so it’s worthwhile checking out what the average in your industry was.
While looking at turnover rates is important, it’s also important to look at who’s leaving. If your turnover is relatively low, but primarily made up of top performers and valuable employees, that can be as concerning as a high turnover rate.

Warning sign #2: Low mobility

One of the biggest factors that causes employees to disengage from their work is a lack of professional development. In fact, employees under the age of 25 cite it as their number one driver of engagement. For employees aged between 25 and 35, the existence of professional development opportunities is the second biggest driver of engagement.

In 2014, LinkedIn asked professionals who had recently changed employers what had caused them to do so. The number one reason people left was because of greater advancement opportunities.

If professional development opportunities and upward mobility are pretty thin on the ground in your organization, there’s a distinct possibility that your employees are actively disengaging from their role.

Warning sign #3: Excessive sick days

In 2012, psychologist Michelle McQuaid (author of the colourfully-titled book, ‘Five Reasons To Tell Your Boss to Go F*** Themselves) released a survey that found out that the majority of American employees are unhappy at work – and that most of the time, these employees were unhappy because of their bosses.

On top of that, McQuaid’s research also found that employees who dislike their bosses take an average of an extra 15 days of sick leave per year. This is in line with a wealth of other research, that suggests that absenteeism rates and engagement rates are closely linked.

If you’re concerned that your existing company culture is one that’s breeding negativity in the workplace, there’s a few things you can do to get things back on track.

  • Ask your employees for feedback regularly
  • Assess what professional development opportunities exist currently, and whether you can expand that offering
  • Improve your onboarding processes, to ensure new hires are actively engaged from the beginning
  • Give frequent feedback to employees – millennials, especially, perform much better with consistent, frequent feedback on their performance
  • Encourage leadership, collaboration and teamwork
  • Build shared experiences through team-building activities
  • Be proactive – don’t expect a great company culture to just form of its own volition
  • Show your appreciation of work well done – whether it’s verbally, or with something simple like coffee or ice-cream

Keep in mind that each company’s culture is a system of expectations, experiences, beliefs and values that is unique to it, and there is no quick and easy checklist to follow when attempting to build a positive company culture. Instead, you need to be informed by the things that your employees value, and involve them in the process.

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