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We've all heard the jokes online that if someone says in their job ad that “we'll treat you like family” you should run away – that's the last thing a company would actually do. To be completely honest, I once consulted a friend who worked at a company that said this and had an extremely high turnover rate.
Employees at this company called and sent Slack messages at all hours of the day. The manager expected employees to be available 24/7, even though the company itself had normal working hours of 9am-5pm. The manager held a team meeting every month where he called each team member up to tell him, in front of everyone else, what they had done wrong during the month. Successes were never recognized at these team meetings.
On the other hand, my friend also worked at another company where employees absolutely loved the work culture. If you made a mistake, the company owner acknowledged it and helped you find ways to improve in the future. There was never any punishment or scolding. She encouraged everyone to learn from it.
She also recognized people's strengths and actively approached them about other opportunities. For example, she noticed that one employee who had originally been hired as a telephone operator had an affinity for numbers and enjoyed budgeting. With a lot of encouragement from the team and a little training, this receptionist moved up to inventory management.
All jokes and internet memes aside, the culture in your company can determine the success or failure of your business.
Related: How to create a work culture where everyone feels like they belong
The costs of a bad corporate culture
According to the Society for Human Resource Management, it can cost up to 6-9 months of an employee's salary to find a replacement. That means losing a $60,000 employee can cost you up to $45,000 to find a replacement. Just to put that in perspective, the company with the terrible work culture mentioned above had an average turnover rate within six months for a team of 15 people. Let's say they all made $60,000. That means the company was essentially burning through $675,000 every six months—which adds up to $1.35 million per year. As you might have guessed, that company went bankrupt.
Of course, company culture is about much more than money. Morale, performance, and the ability to attract top talent all suffer from a lackluster work atmosphere. Without positivity and recognition of success, employees feel like they can never do anything right, which leads to low morale and, in turn, low innovation and enthusiasm for work. If someone isn't interested in their job, they won't do it well, which leads to external problems for the company, such as poor customer service and missed deadlines. And if the company can't innovate in our fast-paced, ever-evolving world, it won't survive.
This then leads to employment problems. Companies with a bad reputation will have a hard time hiring top talent because no one wants to work somewhere that doesn't value them. According to an estimate by Gettysburg College, the average person spends 90,000 hours of their life at work – that's about a third of their life. People don't want to spend that time in a place that stresses them out or pushes them to the edge of their capabilities. This is true for current employees too; people don't want to work in a place where they have to constantly fear losing their job; therefore, many people will quit (once they realize the toxicity of the work culture). This leads to a never-ending cycle of talent coming and going, leaving the company with no opportunities for growth.
Related: 10 Excellent Examples of Corporate Culture for Inspiration
Create a culture that retains talent
There's been a shift recently where people aren't staying in their jobs as long as they used to. You've most likely heard of people who have worked at the same company for 50 years or more. These days, it's more common to hear of people who have worked for multiple companies in just a few years. That's because of the nature of the work, the benefits that come with it, and—you guessed it—the company culture. After working in the recruiting industry for nearly two decades, here's how to create a company culture that will retain your top talent, save you money, and help your company grow:
- Be present. Too many people want to own businesses without having to be present to run them. If you don't want to work there, why would your employees want to work there?
- Lead by example. Everyone is human and even artificial intelligence makes mistakes. Use a mistake or problem as a learning example and you might even be able to turn it into a marketing opportunity.
- Empower your employees. Give your employees the opportunity to advance their careers through training, certifications, etc. If someone wants to improve, help them!
- Celebrate success. Recognize achievements and set goals that reward your team.
- Communicate openly. When something goes wrong, it needs to be pointed out. Do this in a professional manner so the team can address the problem.
- Promote a healthy work-life balance. Especially when working remotely, employees are tied to their devices. Make sure they can take breaks and vacations, and set working hours that promote this balance.
- Offer incentives as part of the job package. Benefits also play a big role for potential young talent. Look at what your company can offer to attract employees to your business.
Related: How to create a work culture that can survive anything
If you're not sure what to change about your company culture, go to the source and ask your employees. Their valuable feedback will help you create a company culture that encourages employees to stay and develops top talent who will grow with the company.
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