Four Ways a Positive Company Culture Can Increase Retention And Revenue
Matt Thomas
Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowAccording to a Deloitte study, 94 percent of executives and 88 percent of employees believe that a distinct company culture is important to business success. However, only 12 percent of executives believe their company is driving the right culture. So, what exactly is the "right" culture? Traditionally, culture is defined as the “handing down of information, beliefs, and customs by word of mouth.” Over time, this definition has continually evolved to fit today’s business landscape.
By 2025, 75 percent of the United States workforce will be Millennials, a generation that has very different expectations of employers. Most feel that company culture is driven by more than just Friday happy hours and unlimited PTO. Culture in the business world revolves around employee morale, executive support, transparency and a strong reputation.
Company culture can function as a competitive advantage in numerous ways. Here are some examples of how a strong culture can increase retention and drive revenue for a business.
Flexibility as a competitive advantage
As the U.S. unemployment rate is holding steady at 4.1 percent, employers have not stopped trying to maximize their retention and recruitment. A roadblock to these efforts is that Millennials have a tendency to job hop. By age 35 about 25 percent of these young employees will have worked in five different companies. One way to fight this turnover rate is to provide employees with increased flexibility in the workplace. For example, offer summer hours where everyone works a half day on Friday. Another possibility is remote work which gives employees the option to work from home a set number of days each month. Providing flexible schedules will not only give your business an advantage over competitors in the recruiting process, but also will increase productivity and better satisfy the needs of employees.
Motivate employees
Some people don’t have the ability to self-motivate, so they need outside motivation from their employer in order to function at their best. Incentives are a unique and engaging way to motivate employees. These can be anything from a $5 Starbucks card to a larger reward like a free vacation for employees and their families. Celebrating small victories is a simple way to show employees you appreciate and notice their efforts. When they feel valued, employees often want to work harder and continue to strive for further recognition. With happy workers being 12 percent more productive than the average worker, productivity will increase if incentives are utilized. Lastly, better productivity means happier customers which leads to an increase in revenue for your company.
Create a strong reputation
Some executives feel that a strong reputation is only important to impress external stakeholders and clients. However, a positive reputation can increase employee morale and aide in recruiting efforts, especially with the millennial workforce taking over. Millennials are especially unique because of their desire to perform meaningful tasks and have a meaningful connection with the outside world. One way for employers to satisfy this need is by setting up volunteer opportunities with non-profit organizations that have a logical connection to your business. Each quarter, set up times for certain departments to volunteer with different organizations around the community. To further incentivize employees, provide them with paid time off to be used for volunteer initiatives. This shows that as an employer, you care about giving back to the community.
Be transparent about company goals
Many executives want to foster an environment centered around teamwork; however, this initiative is sometimes lost in translation when communicating with employees. One way to ensure success in this venture is to openly share business goals across every level of the organization. When all employees feel up to date on your company’s direction, it leads to greater involvement and a better sense of value.
Company culture can play a vital role in the success of a business. Having a strong, transparent and positive culture can foster an environment centered around flexibility and teamwork. Overall, these different areas of culture play a heavy part in creating a healthy bottom line.
Matt Thomas is president of WorkSmart Systems Inc.