How Your Company Culture Impacts Employee Retention

Zachary Amos
Mon, 05 Aug 2024 20:32:31 +0000
Company-culture, Corporate-culture, Corporate-values, Dei, Employee-benefits, Employee-dynamics, Employee-engagement, Employee-engagement-and-retentio, Hr, Staffing, Sustainability-initiatives, Work-culture, Workplace-culture, Workplace-values, Employee-retention

A competitive job market has made employee retention all the more crucial. Of course, knowing what motivates employees to stay is critical for businesses to successfully retain top talent. Learn how aligning corporate values with staff values prevents turnover.

Impact of corporate culture and values on hiring and retention

According to the Bureau of Labor Statistics, there were 8.5 million job openings in June, with only 6.8 million unemployed workers to fill them. While this is good news for U.S. unemployment rates, it makes it difficult for businesses to find qualified job candidates.

Holding onto quality team members is essential for avoiding lost productivity and rehiring costs, meaning brands must take stringent measures to prevent turnover. About 33% of hiring managers expect turnover rates to rise in the coming year, costing organizations roughly $36,295 annually.

Although fair compensation is a big factor for employees, it isn't the only thing affecting turnover. Many workers seek a deeper connection to their work overall. They want to know their contributions make a difference in helping their workplace achieve its mission. At the same time, they uphold specific values they hope their brands share.

Retaining employees: where corporate and employee values intersect

Many corporate leaders assume they know what staff want, from free snacks to on-site gyms and game rooms. Although competing against one's co-worker in ping pong makes for a fun 15-minute break, it isn't going to inspire loyalty. To hire and retain top talent, a company's culture and values should take into consideration the following employee expectations.

1. Work-life balance

When Covid-19 caused stay-at-home mandates and a fast transition to remote work, few could have anticipated its benefits for work-life balance. As enterprises began reopening with vaccine rollouts, employers were left stunned at the return-to-office resistance.

Yet, 90% of employers say work-life balance is very or somewhat important to them in their careers. For one thing, remote work—even in a hybrid setting—enables greater flexibility and autonomy. For parents especially, the ability to assume caregiving responsibilities while working their way up the career ladder is invaluable.

Valuing work-life balance demonstrates a keen interest in people’s well-being and cultivates a more substantial commitment to job performance. For instance, working from home at least a few days weekly allows workers more time to care for themselves and participate in hobbies they love. And a change of scenery can also inspire newfound creativity and innovation.

2. Fair compensation

Brands must reevaluate salaries and understand their staff’s worth to prevent high turnover. Nearly 37% of employees who quit their jobs in 2021 cited poor compensation as a primary reason.

3. Professional development

According to the 2024 Career Optimism Index, there is a disconnect between what employers believe they offer employees regarding professional development and what employees say is actually offered. In fact, 90% of employers say they provide workers with opportunities for career development, while only 69% of workers say they truly have these options.

Professional development demonstrates a company's willingness to stay ahead of the curve, making it exciting for employees to become more engaged. In a world where artificial intelligence has taken industries by storm and advancing technologies leave many worried about job performance, professional development fosters a more experienced and adaptable workforce.

4. Diversity, equity, and inclusion

In July 2024, the Society for Human Resource Management removed the word "equity" from its diversity, equity, and inclusion strategy (DEI) and adopted just I&D, much to many people's dismay. The change arrives as many organizations lay off their DEI teams to cut costs.

However, according to a CNBC/Survey Monkey workforce survey, 78% of respondents said working for an organization prioritizing diversity and inclusion is important, with 53% saying it was imperative. DEI initiatives foster a sense of belonging and loyalty among employees. As a result, they may be more likely to stay on long-term and refer people they know.

5. Mental health

The pandemic took a toll on many people's health, but workplace stress was an issue long before the onset of Covid-19. The difference is now employees are adamant they work for more caring companies.

The American Psychological Association's 2023 Work in America Survey found being employed by someone who values their mental well-being is necessary for 57% of people and somewhat important to 35%. Another 92% want their organizations to offer mental health support.

Leaders can aid their workers' mental well-being and boost retention rates by:

Delivering mandatory mental health training to managers to become more aware of their teams' psychological health.

Including mental health coverage in health insurance plans.

Hosting mindfulness training, meditation sessions, and yoga classes at work.

Encouraging employees to take advantage of paid time off, and delivering vacation stipends to full-time contractors.

Making accommodations for workers returning from a leave of absence.

Reducing stigma by providing workshops on mental health topics.

Establishing an employee assistance program for low-cost mental health services.

6. Sustainability

As the climate crisis intensifies, more employees are concerned about their brand's environmental, social, and governance (ESG) stance. A Gartner survey says 67% of workers prioritize sustainability, yet only 31% agree their workplace supports ESG goals. Companies can demonstrate a higher regard for the environment by implementing green initiatives, such as in-office recycling and sustainable building upgrades.

They can also encourage participation in local park clean-ups and eco-friendly behavioral changes at work and home. Partnering with a green supply chain is another way organizations can demonstrate environmental values and retain their workforce.

Upholding like-minded values is essential for employee retention

Businesses can retain their best staff and build a more motivated team by creating a shared sense of purpose through core values. Workers want to know their companies value them and are committed to improving their job satisfaction.