Whether you’re aware of it or not, every company has a distinct culture. Defined as the ethics, values, expectations, and mission of your business, as well as the working environment you offer, your company culture has a direct impact on your success.
According to Forbes, companies with strong cultures experience four times revenue growth when compared to businesses with weak or undefined cultures.
Deloitte reports that 88% of employees and 94% of executives believe workplace culture is important to commercial success.
Successful businesses typically have an easily identified company culture and a happy workforce. With the ability to increase growth, attract the best staff and boost productivity, the importance of company culture can’t be ignored.
What is Company Culture?
Although your company’s culture isn’t a tangible asset, it’s one of the most important things about your business. Every business has a unique environment and your culture helps to shape your company.
Encompassing your firm’s values, beliefs, and objectives, as well as your ethos and approach to business, your culture is a reflection of how you do business. Sometimes referred to as organizational culture, it includes the way in which your workforce is structured and how employees interact with one another.
In companies with an informal culture, for example, employees from all levels may interact with one another on a regular basis. In contrast, more formal company culture may exist in firms where traditional management levels are enforced. In such environments, executives and managers rarely interact with lower-level employees directly.
Whilst there are various definitions of corporate culture, it can be said to encompass these main areas: how staff act and interact, communication, the norms, symbols and habits of the workplace, as well as your company’s vision, assumptions, and beliefs.
Why is Company Culture so Important?
Studies have shown that company culture has a significant impact on commercial success, but they don’t necessarily explain why. In fact, there are various reasons why a strong corporate culture can lead to increased turnover and higher profits.
When there is a distinct in-house culture, employees know how to collaborate with one another and what’s expected, and acceptable, in terms of how the company operates. In an informal environment, junior members of staff may suggest ideas to management, for example, and in a more formal environment, suggestions may need to reach the top via a team leader, supervisor, and manager first.
Both types of culture are equally valid, but some companies are more suited to a particular type of culture. In creative industries, such as advertising, a more informal approach may be beneficial, whereas other businesses, such as law offices, may find a formal culture more advantageous.
Regardless of which type of culture you choose to cultivate, simply having it in place enables employees to work collaboratively within the bounds of the established expectations of the workplace. As a result, teamwork can flourish and business benefits.
Many people believe that happy employees work harder, and studies have confirmed this is true. According to The Social Market Foundation, happy employees are 20% more productive than their less satisfied colleagues. When assessed in terms of sales staff, a 37% increase in confirmed sales amongst happy employees was reported by Shawn Anchor.
Indeed, in One4All’s 2018 Workplace Happiness Report, 39% of employees maintain that they would work more productively if they were happier at work.
Increasing employee satisfaction and engagement can, therefore, have a considerable impact on your rates of productivity. When you’re able to increase productivity in this way, you’re effectively boosting your outputs, turnover, and profits without increasing your resources or funding.
CultureIQ reports that employees at companies with strong cultures rate their firm’s working environment at 20% higher than those with less well-established corporate cultures. Similarly, the Society for Human Resource Management reports that 55% of managers believe that a strong company culture contributes to hiring the right employees.
As employee satisfaction has such a significant impact on your company’s success, it’s vital to find ways to enhance fulfillment amongst staff. Strong company culture can do just that.
Fostering teamwork, shared expectations and joint objectives, a defined company culture shows employees they’re valued and earns their loyalty in return.
(Recommended Read: How the Employee Experience Improves Customer Experience)
When staff are engaged and fulfilled in the workplace, they are far more likely to continue working for their employer. According to Gallup’s State of the American Workplace report, businesses that cultivate highly engaged employees experience 59% less turnover. This is a staggering statistic and one which highlights the importance of company culture.
Attracting and hiring the right staff is one of the costliest aspects of running a business. Furthermore, induction training and skill development require further investment, thus emphasizing the benefits of retaining staff for long periods.
The ADP Research Institute maintains that 60-70% of staff turnover is voluntary, meaning that employees are choosing to leave their positions for something they perceive to be better. When this happens, companies can spend tens of thousands of dollars trying to replace them with suitable new hires.
As employees value company culture so highly, it makes sense to use this to increase your rates of retention. When you’re able to keep your best staff, you benefit from their expertise which can help to boost company performance. In addition, the company can significantly reduce the time and funds it takes to recruit replacement members of staff.
Developing Your Company’s Culture
Although the importance of having a strong company culture may be clear, many managers and executives are unsure how to implement an effective and appropriate culture within the workplace. However, this is not something that should be left to luck or ignored ad infinitum.
With so many benefits to be derived from cultivating a positive working environment, seeking expert assistance can be a savvy and cost-effective way to ensure you’re adopting the right company culture. Once you’ve successfully integrated your company’s culture in-house, you’ll reap the rewards of increased employee satisfaction, higher levels of staff retention, enhanced productivity and amplified business growth.
Learn how you can improve employee happiness and cultivate corporate culture by implementing an incentive program by contacting the incentive experts at MTI Events at 913-521-8946.