Company Culture Matters: Here’s Why
Employee productivity is an essential factor that businesses can’t seem to maintain. Not so long ago, money used to solve this problem. A salary increase, better incentives, and more employee benefits kept them engaged and happy.
That is no longer the case today. Generation Y, also known as “the Millennials”, have begun entering the workforce, and this brought along a new wave of changes in the working industry. Money, while still vital, is no longer the primary instigator.
Corporate culture: What is it?
There’s a new motivator in town, and it’s called corporate culture. This is a potent factor that determines the satisfaction levels of a company’s employee. But what exactly is it? Simply put, corporate culture is the nature of an organization. A result of the amalgamation of a company’s mission, vision, core values, as well as the values of the people working in it.
Companies that put emphasis in developing a good corporate culture experience a lot of quantitative benefits. A study conducted by the Madison University in Wisconsin showed that engaged employees took fewer sick days. Moreover, 67% of engaged employees are more likely to recommend their company to other potential employees. Meanwhile, only 3% of disengaged employees recommended theirs.
That’s a large difference, and is a strong proof of how good corporate culture boosts a business’ chance at success.
If you’re an entrepreneur who wants to further improve his/her business, here are the reasons why you should consider putting effort in improving your company’s corporate culture.
Increase employee retention
HR managers and recruitment staff know the importance of employee retention. And you should too. Just consider the costs of searching and retraining a new employee. Depending on the position, your company may need to spend around 20 to 200% of the employee’s annual salary.
By encouraging a culture that promotes transparency and proactiveness, you’re bound to see a significant increase in your employee turnover rate.
Better employee performance
When an employee is well-paid, feels appreciated, and has a good work-life balance, their performance significantly increases. According to Gallup’s Key Performance Indicators from top and bottom-quartile work groups, worker engagement causes a 22% increase profitability, 21% increase in productivity, and a 10% increase in customer score ratings. There is also a 48% decrease in safety incidents, 51% decrease in lost or stolen inventory, 65% decrease in turnover ratings (in low turnover organizations), 26% decrease in turnover ratings (in high turnover organizations), and a 37% decrease in absenteeism.
Higher customer satisfaction
You may not notice it, but corporate culture affects your customer’s experience with your company. Happy cultures create happy employees, and happy employees treat customers better compared to their not-so-happy counterparts. By providing your staff with a friendly work environment, they will take prioritize your customers’ needs instead of catering to their own interests.
When employees’ performance is partly gauged by customer satisfaction, they will proactively look for ways to keep them satisfied.
Business owners and managers should begin implementing better company regulations. Abolishing outdated policies that mainly focus on the “sticks and carrots” strategy can prove to be highly beneficial, all they need to do is pay attention to the needs of their workers, and the rest of the benefits will inevitably follow.