Employee turnover is costly. That’s obvious. Every CEO knows, their people are often the organisations’ most important assets. However, employee and talent retention are huge challenges for businesses today. It’s probably the most difficult nut to crack!
Aside from the obvious challenge surrounding the replacement of skills and capability, there’s a greater loss. Many businesses have an underlying ‘tribal knowledge’, undocumented pockets of information not known by everyone in the company. When employees leave, they take this information with them, leaving a gap in knowledge that wastes time, energy and money to reclaim. Low retention rates can reflect low productivity because of the constant need to train and onboard new staff, as well as losing important talent. As organisations begin to find ways to improve retention, more are turning their attention towards the heart of their company culture.
Company culture is defined as the “underlying beliefs, assumptions, values and ways of interacting that contribute to the unique social and psychological environment of an organization” and this reflects the environment and social norms within the workplace. These beliefs and values determine how and why things get done.
According to Deloitte, “Our global survey showed that executives rate ‘retention and engagement’ as their No. 2 priority. A focus solely on retention, however, may be misplaced. Companies should shift from strategies to ‘hold people here’ to ‘attracting and engaging people’ through measures that build commitment, align employee goals and experience with corporate purpose, and provide engaging work and a culture of development and growth.” A workforce of dispirited stayers (those who are unmotivated, disruptive and unproductive – yet keep cashing their pay check) will have equally as negative an impact on an organisation’s growth.
Many companies underestimate the importance of company culture and its impact on employee satisfaction, engagement and retention. Your employees will spend over a third of their lives at work, so having a place where they feel content is crucial for their health and happiness. Company culture plays a huge part in the success and overall health of your company and is one of, if not the, most important aspects in retaining employees and talent. If your culture creates positive space, your valued talent is less likely to leave. It’s that simple.
Research by Gallup found that highly engaged employees are 21% more productive, this brings a whole host of benefits to your company. Gallup also found that “the strong correlations between engagement and performance are highly consistent across different organizations from diverse industries and regions of the world,” showing that it is a universal trend which benefits every type of business.
Organisational culture usually follows a top-down approach. As a result, it is vital that leaders clearly communicate the beliefs and values of their organisation they want to install in their employees. There is a difference between a manager and a leader; when someone leads by example, they have a stronger and more positive influence on their employees. When a manager acts as a part of the team rather than the organiser, the team not only functions better but employees are much more engaged. It’s about finding that balance between a top-down and down-up culture.
The 2017 Gallup State of the Workplace report also concluded that employees supervised by highly engaged managers are 59 % more likely to be engaged than employees supervised by disengaged managers. A culture where managers empower the team and make decisions that benefit them creates positive engagement that drastically improves retention. It’s about respect; a manager needs to earn it and an employee needs to feel it in order to work to their full potential.
What makes a positive culture?
Company culture can help you define your company’s identity. People want to work at a company that has meaning for them in an environment where they feel respected, supported and above all else, happy. If people look forward to coming into work, their ideas are respected by senior management, (vice versa) and there is strong communication between teams there will be higher retention. Having transparency in your teams will help with this, keeping people ‘in-the-loop’ and showing them the benefit of their work makes people feel much more included and respected.
Strong company culture will not only keep your values at the centre of what you do, but it will also improve your employee’s performance and wellbeing. To achieve powerful change, you must always acknowledge your values; stop and think whether you are living in accordance with them and reflect on how they fit into your culture. Taking the time to focus on this will show you where the gaps are. Putting your values into the forefront of your company culture will help you retain your best talent and transforming your employees into advocates along the way.
Here at Hollaroo, we place the user at the heart of our platform, creating a space where conversation and creativity can flourish. We believe that relationships with your employees should follow three simple principles – respect, relate, respond. Respectful in terms of how and when you use data to make judgements about your worker’s welfare, relate(able) in circumstances where they might not recognise the implications from their actions and responsive – don’t track data to report actions like attrition, which is historical and difficult to reverse! Perhaps that’s a fourth R!