What’s Culture Got to Do With Employee Loyalty & Retention?

If you work in HR, internal communications, employee engagement and even operations, the term ‘engagement’ has undoubtedly been thrown around, crossed your desk and left you feeling puzzled on how to measure it across your workforce. While engagement is surely something that employers should be thinking about to keep employees motivated, productive and happy, culture is just as important. But more often than not, it isn’t as high of a priority among HR and internal communications/engagement professionals. 

As our latest research study proves, that needs to change. Culture must be given a more prominent seat at the employee experience table. Why, you may be asking? Well, for one, 75 percent of HR professionals experience an average turnover rate of 30 percent each year. But there isn’t one single cause of turnover – it’s the result of multiple factors, including poor internal communications, lack of team unity, a poor/toxic culture, lack of trust/integrity and lack of access to management, to name a few. Considering our research also found that it costs, on average, $3,000 to replace each worker, it’s clear that turnover is more than just an employee morale killer and can be a serious financial drain on a company’s bottom line.

So the question is: How can you create a culture that fosters transparent communications, stronger workplace relationships, team unity, more happiness and loyalty among your employees? Let’s explore some of the study's key findings – and determine how HR, internal communications and operations teams can leverage them to improve their cultures and prevent employees from walking away (to competitors).

Culture is more important than work-life balance

Two of the most important findings of the study are centered around just how big of a role and impact culture plays in reducing turnover. More specifically, 48 percent of the global respondents said they would gladly choose to work longer hours (60 hours per week) rather than work for a company that doesn’t value culture.  As if that isn’t telling enough, another 58 percent said they would take a job with a competing company if the new company had a better culture than the current one.

Based on this data, it’s clear organizations’ HR and internal communications/employee engagement teams need to make culture a higher priority for the simple fact that a poor, toxic (or even lack of) culture can have seriously damaging consequences on employee satisfaction, workplace relationships and loyalty. And if those areas suffer, then it will surely lead to high turnover, which will make it difficult for businesses to be operationally efficient, grow and scale for long-term success.

Also, it was a real eye-opener when we dissected and analyzed the country-specific findings. It highlighted just how different employee beliefs, values and priorities are in each country.  Data from the study suggests that culture is far more important to American employees, while British employees place a higher premium on their personal time. In particular, 55 percent of the US respondents chose the 60 hour workweek, compared to their UK counterparts (42 percent). Meanwhile, 22 percent of the US respondents said they would prefer to work for a company that doesn’t value culture, while a higher number (33 percent) of UK respondents chose this same option.

Respect, fairness, trust and integrity matter more than transactional engagement

Given that the study was focused on understanding the role and value of culture in improving employee relationships and loyalty, we asked the respondents to specific the most important attributes of a strong workplace culture. While respect and fairness (39 percent), trust and integrity (23 percent) and teamwork (9 percent) ranked as the three most important attributes, only 2 percent of the UK respondents said employee engagement was a key attribute of a strong culture and just 2 percent felt transparent communications made an impact. If you look at these responses, it’s quite clear that transactional engagement isn’t what companies should be prioritizing if they want to create a positive, collaborative and trusting culture that attracts top talent, increases employee happiness and cultivates loyalty.

Job guidance, positive recognition and shift/schedule flexibility go a long way to motivate employees  

Once a new employee has officially started their first day on the job, the pre-boarding phase ends and the on-boarding phase begins. This should typically last anywhere from between 30 to 90 days and shouldn’t be a one-and-done approach.

The stakes are high in this phase and could make or break a new hire’s employee experience before it even has the chance to form. This is supported by our study’s findings. More specifically, we asked the global respondents what makes them feel connected to a company’s culture after the first 30 days. The responses to this question reiterate just how high the culture stakes truly are. For instance, 27 percent of the global respondents said ongoing job guidance and support makes them feel connected to the company culture, while 20 percent cited recognition and rewards and 14 percent said shift/schedule flexibility has a similar effect. If you consider that the vast majority of frontline employees work in shifts that can vary each day and sometimes run into the late evening hours and weekends, it makes sense that employees would consider shift/schedule flexibility to be a contributing factor to workplace culture.

However, regular social outings/events (4 percent) and access to tools/technology that improve productivity (5 percent) both ranked lower on the list of factors. The fact of the matter is that social outings/events, while they are fun and appreciated, fall into the superficial category of culture that we discussed earlier. That doesn’t mean companies should ditch hosting social outings for their employees; it simply means that it shouldn’t be given the highest priority or used as a replacement for other important initiatives that will truly drive change management and create a culture of trust, integrity, respect and fairness.

Ditch the superficial perks and focus on long-term culture alignment

The sad fact of the matter is that many companies today mistake physical perks or amenities as being a critical part of workplace culture. But they simply are not. By focusing only on providing superficial perks, such as free lunches/snacks/beverages, ping pong and/or foosball tables, video games, yoga, social outings/events and posters illustrating the company’s values on walls, companies are proving that they don’t understand what culture truly means, how it should be activated and how it can positively (and negatively) impact the employee experience. This misunderstanding, at its core, is where companies need to begin if they want to improve their workplace culture.

Make more of an effort to improve workplace relationships

Relationships are a two-way street and require active commitment, participation and support from both sides. Sometimes miscommunication, misunderstandings and a general inability to see the other person’s perspective can create friction. But as our study found, the causes for a breakdown in internal relationships can also be much simpler.

To that end, we asked the global respondents to specify their biggest complaint about their relationship with their direct/line manager. Lack of guidance and support ranked high among the UK respondents, at 16 percent, while unclear instructions provided for tasks followed closely behind, at 15 percent. 

Whatever the cause may be for a relationship breakdown between employees and managers, below are useful tips for how both employees and their managers can improve the situation. 

• Communicate clearly, honestly and frequently: Oftentimes, strained relationships can be caused due to a breakdown in the frequency and quality of communications. This is where it can be beneficial to have a dedicated internal communications platform, which both employees and their managers can use, to communicate with each other as often as possible and be honest and clear in how you communicate with each other.

• Go beyond communicating: Bring an open mind to the table. Put yourself in the shoes of the other person. Try to understand each side’s perspective and needs.

• Give feedback, both digitally and in-person: Employees crave feedback because it helps them understand how they’re performing and address areas they can improve upon. Since employees are constantly using mobile and social platforms in their personal lives, use a communications tool with a similar user experience and functionality to those platforms when sharing feedback. This will go a long way towards improving the employee-to-manager relationship.  

• Create a safe place for feedback: It’s one thing to encourage employees to give honest, constructive feedback. But if you don’t convey and reiterate to them that they are safe to challenge managers with their opinions, you will simply have a docile and unengaged workforce that’s going to have one foot out the door. 

• Treat others with respect: Respect is a two-way street. But each person has a different expectation of respect. Find out what each person’s expectations are and be respectful.

• Help others out: No company can be successful without teamwork. If a team member or colleague needs help with a task or project, offer yourself up. If an employee is struggling to hit their sales quota or received a negative customer review, help them reach that quota or increase their customer satisfaction scores. It’s easy to dwell on the negative; instead, focus on finding a solution together.