Since the Covid-19 pandemic changed the way we work for good, people’s expectations of their employers and the workplace experience in general have shifted irrevocably. And it’s not just about flexible or hybrid working – factors such as a company’s environmental, social and community commitments, as well as their approach to equality, diversity and inclusion are becoming more important to today’s workforce. Here we’ll explore the power of company culture and why it’s a costly factor to ignore.
First, let’s consider why company culture is important for businesses. Numerous studies have shown that a positive culture can drive business growth through increased productivity, higher revenue and employee retention. Put simply, people are at their best when they’re happiest and feel free to be themselves – a concept known as psychological safety. But what benefits does this deliver to the company?
For small and growing businesses, positive company cultures don't simply attract top talent, they also help to retain it. Lower employee turnover leads to greater commitment and continuity, which can combine to drive innovation and growth. Research conducted in 2023 by WorkHuman and Gallup points to a clear link between culture and profits. For example, a 10,000-person organisation with an engaged workforce can save up to $16.1 million (£12.7 million) in employee turnover costs annually by making frequent recognition part of their culture. What’s more, Gallup research shows that high levels of employee engagement also correlate with nearly every important measure of organisational health: productivity, retention, safety, customer satisfaction and profit. A highly engaged organisation can see up to 18% higher revenue per employee compared with the average.
Now that we’ve established the value companies can gain from their commitment to company culture, we’ll take a look at what practical action leadership teams can take to build a company culture that will drive these positive outcomes. When starting out on this journey, there are five key changes leaders can make to have an instant impact on company culture and employee engagement:
Define core values: Establishing clear values that guide behaviours and decisions within the organisation will give everyone a common perspective on what’s expected of them, creating a cohesive and aligned workforce who are committed to the organisation’s goals and values.
Encourage employee feedback: Regularly seeking input from employees and acting on their suggestions and concerns will give people a sense of empowerment to shape their work environment, enhancing employee satisfaction and morale. Creating voluntary, employee-led working groups focusing on a specific topic or area for improvement can help build community between teams and help people feel involved in organisational decision-making.
Recognise achievements: Acknowledging and rewarding employees for their contributions and accomplishments will foster a culture of appreciation and recognition, motivating employees and reinforcing the company’s values and desired behaviours. People whose companies have an active employee recognition programme are 1.5 times more likely to feel connected to their organisation, reporting higher psychological safety scores, especially when it comes to their unique skills being valued and utilised at work. In fact, psychological safety centres around reward and recognition, supported by regular check-ins with managers and a company commitment to celebrating people’s achievements and life events both inside and outside of work.
Promote work/life balance: Offering flexibility and support for employees to achieve a healthy balance between their work and personal lives can improve their well-being and job satisfaction, contributing to productivity by reducing stress and burnout. Flexibility is particularly important to those with caretaking commitments outside of work – who will be more likely to seek a new job to gain a better work/life balance. This is an ideal area where encouraging employee involvement in decision-making would work well, as flexibility can mean different things to different people, depending on their personal circumstances.
Foster team collaboration: Getting rid of a ‘silo mentality’ between departments to encourage collaboration and teamwork can help build a sense of community, collective responsibility and cooperation. Team-building activities reinforcing shared goals will strengthen relationships and teamwork, which can drive innovation across the organisation.
Want to reinvigorate your company culture but need some structure and guidance? Ambition HR is here to help. As your strategic HR partner, we work with you to align your business and HR objectives, developing bespoke people plans and helping you put these plans into action. If you feel like you’d benefit from an informal chat about your business needs, you can schedule a call online today.
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