Why Company Culture is Important for your Organisation

Company culture has rapidly become a hot topic in the business world, so much so that an ongoing debate exists as to whether it is simply another buzzword or piece of business jargon. But company culture—sometimes known as organisational culture or corporate culture—deserves its popularity as a topic, as it can affect just about every aspect of a business, influencing everything from employee output and productivity to company-wide goals. Leadership teams, workplace environments and more are all influenced by the organisational culture of a business, and as it has the ability to make or break an company, its importance should not be understated. No matter how we think about it, company culture is entirely unique to a business; whilst many organisations may be extremely similar in nature and may share the same core values and beliefs, no two companies will abide by the same company culture. A positive company culture promotes a progressive, results-oriented, structured environment in which employees achieve success for the company whilst accomplishing personal goals. On the other hand, a company with a negative company culture—often referred to as a toxic environment or toxic culture—is a company that is, at best, not reaching its full potential. Clearly, company culture is apparent everywhere you look in a company, but as it can mean completely different things to different people, it can be fairly challenging to define. So,

What is company culture?

Company culture refers to the core company values, outlook and conduct of an organisation that are woven into its everyday life and experience. Every person who makes up a part of the company will conduct business adhering to the same principles, and these principles can either be purposefully put into place, or they could have come into being as a result of the various directions a business has taken over time. These principles can take the form of numerous aspects which are equally intangible, but make no mistake - they are visible everywhere, from top-level decisions made at the board level through to the way in which employees interact with one another on a day-to-day basis. No matter the size of an organisation, the amount of elements that combine to make up a company's culture is extensive. It would be impossible to list each of these, but some are as follows:

Mission

The change that a company is seeking to bring upon the world is a clear indicator of organisational culture. When employees are invested in this mission, it has an effect on every minute they spend working with your organisation, and every decision they make on your behalf. In most cases, mission statements are concise, but explain in few words what a company believes in.

Values

A company may know exactly why it was founded and why it does what it does on a day to day basis, but how does it go about achieving this mission? Values are inextricably linked to organisational culture, as they describe the instructions and regulations by which workforce endeavours to live and breathe.

Leadership style

Every organisation will have their own definition of what a good leader looks like, and much like company culture as a whole, it will be different in the case of every business. How is communication carried out between leaders of your company? Is there a hierarchy culture is in place, or is this same behaviour replicated towards other team members? Leadership style is impossible to separate from organisational culture as it determines the everyday experience of your employees: their interactions, outlook, conduct and more.

Workplace / work environment

Whether physical or virtual, the place in which employees of your company carry out their work is inseparable from company culture. The way certain offices are laid out is conducive to the sorts of individuals work there and their behaviour in the office. A workplace may also be representative of the city, region, or country it is situated in. No matter how you look at it, an employee's workplace influences their conduct, which affects your company culture. As mentioned, the above points are far from exhaustive, as work culture is apparent in everything a business does. Overall, a strong corporate culture is one that fosters growth by allowing employees to grow while ensuring that the business is continually moving forward. Positive cultures are founded on honesty; they encourage healthy habits, inspire creative and productive conversations, swiftly resolve issues, and much more!

Why is company culture important?

Everything a business does reflects its company culture, from your employees' productivity and output to the way in which your brand identity is perceived by the public. The belief that company culture is integral to a business has not arisen without good reason. A recent Deloitte survey found that 94% of executives and 88% of employees believe a distinct workplace culture is important to business success. But why are organisations that embed core values into their able to attract both their existing employees and potential hires? At Skillsarena, we recognise that there is no one-size-fits-all approach when it comes to organisational culture, and a values framework that works for one organisation may be detrimental to another. However, one thing that all companies can agree on is that a strong sense of culture—no matter which form this takes—is invaluable to companies. Here are some of the reasons why:

Increases employee engagement

Culture and employee engagement are extremely interconnected, as a happy employee is an engaged employee, and an engaged employee is one that is most capable of producing the best work on behalf of your organisation. If a company adheres to a company culture that emphasises the value of high performance, its employees will be highly motivated as a result. For an employee to feel engaged—for them to feel that their actions are making a difference and helping to shape the future of the organisation—clear expectations must be defined and a link must be established between the purpose of the work being carried out by employees and that of the organisation as a whole. With this established strategy in place, employees feel engaged with the business, involved with the day-to-day responsibilities and functions of their role, and supported by those who uphold and actively endorse the company's strong culture.

Improve recruitment

As culture is projected any time someone comes into contact with a business, it certainly leaves a lasting impression on job seekers - those in the early stages of recruitment as well as those close to onboarding. When on the lookout for top talent, organisations with strong culture can showcase this as a benefit of the company. Work environments mean a lot to prospective and new employees; over recent years, we have seen a stark increase in applicants hoping to work somewhere they are valued, where new ideas are welcomed, where they feel supported, and where they feel like they are a cultural fit. As over 77% of respondents to a recent survey stated that they would consider a culture before applying for a role within the business, it is clear to see that in the minds of applicants, culture matters. It is even be argued that culture is more important to some than money (another unforgettable differentiator!) as over over half of these 5000 respondents stated that company culture is more important than salary when it comes to job satisfaction.

Decrease turnover

Just as potential new hires aspire to join a company that shares their beliefs and values, current employees who feel valued, respected, and a part of a positive community are unlikely to leave an organisation that makes them feel this way. Considering that community-focused values can be challenging to establish in recent times due to the reduction of in-person contact, employees are less likely to leave once they are settled and are a part of a company culture that they believe in. Employee turnover is a major business concern for the vast majority of organisations, regardless of differentiators such as size and industry. Given that the hiring and subsequent release of a misaligned employee can cost an organisation from 6 to 9 months’ salary on average (as well as the time and resources associated with the move), this concern is certainly justified! As well as being costly in terms of finance, the departure of a member of staff due to a misalignment of values causes a culture change that is far from beneficial for your existing organisational culture. For organisations with a well-established cultures—those who practice transparency, communication and employee satisfaction, employee turnover may be less of a worry, but active steps should still be taken to continuously inspire cultural change and improvement. Establishing positive attitudes and a well-defined, great company culture in your business is vital for countless reasons. When your teams are in unison, each member will be gaining a positive employee experience, and their productivity will be improved as a result. It is no secret that when happy at work, employees are able to produce their best work. A company that invests its people - their well-being, their progression, their work-life balance and more is a company that is rewards with an action-oriented, high-performing workforce.

Why recruiting for culture is important

As we have illustrated, company culture accounts for so much. It is the perception that the outside world has of your business, it is the self-image that each of your employees has of themselves, and it is the team-oriented clan culture that allows everyone from your leadership team to your newest employees to encourage one another and uphold the belief that the work that they are doing is enacting positive change. Above all, company culture is the bond that holds a company together. To ensure that this balance is maintained, it is essential to onboard new employees who are a cultural fit for your organisation. However, before hiring managers, interviewers and recruiters can make hiring decisions based on culture, they need to have formed an understanding of how their own company culture looks. Only after doing so will they will be able to recognise attributes personality types in prospective employees that align with their culture. Are you seeking diligent employees who show high levels of ability in specific roles, job functions and industries? Our Skills Tests may be ideal for differentiating cultural fits from those solely qualified for the position. Is the team you are recruiting for missing out on key personality types who will restore balance to this sub-culture; who will be the final piece to the puzzle? Our Character DNA Personality Test could be the perfect way of discovering what (or who) is missing. Through whichever means you select your company's next employee, consider assessing their suitability based on cultural fit. Making a decision based on whether or not the potential candidate will fit into your pre-existing company culture will help you to hire individuals who are close to perfect for the role. Not only that, these employees will thrive in their job performance, they will work well alongside your existing employees, and they will allow you to avoid the headache of onboarding a bad hire. To explore the different ways in which we can refresh your existing recruitment strategy, get in touch with one of our consultants. You can reach our experienced team by calling 0203 693 2201. Alternatively, you can send an email to info@skillsarena.com for further information.