Why your company needs to invest in Company Culture

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Are you struggling with finding the right people to grow your business? Or are you working in a company that makes you dread getting out of bed in the morning? There is a high chance there’s a problem with your company’s culture.

It seems almost on a weekly basis in the news, we hear of companies, governments and other organisations with major culture problems. Whether it’s exploitation, covid parties, harassment or firing employees over a zoom call. Since lockdown you would have noticed a significant increase in articles and LinkedIn posts that seem to pop up every day talking about the “Great Resignation” with total job-to-job moves increasing to a record high of 988,000, driven by resignations rather than dismissals, during October to December 2021.

Just in case you weren’t sure, company culture isn’t:

  • A list of buzzwords you put as your company values on your about page
  • A ping pong table sitting in the corner of the office, but nobody plays because it will disturb work calls in your open plan office
  • Some discount vouchers for perks that nobody really cares about and don’t claim
  • Access to a mental health app, without any real support if someone is struggling
  • A company retreat or townhall meetings where the employees are bored while the senior management massage their own egos

Company culture is embedded in every interaction every member of the company has with each other, suppliers, customers, everyone you meet at networking events, your social media posts, emails you send, everything. Leadership is key as it filters down throughout the company. It’s in how you treat others and is noticed by employees and customers. Building and growing a good company culture is everyone’s job, not just HR. 

The business case for investing in company culture now!

If you think focusing on company culture is just for trendy startups or fluffy HR nonsense, think again.

94% of executives and 88% of employees believe a positive workplace culture is vital to business success. Employees’ overall ratings of their company’s qualities — such as collaboration, work environment, and mission and value alignment—are 20% higher at companies with strong cultures. These qualities help winning cultures keep employees aligned and motivated. Additionally, companies with more engaged workers grew revenue 2.5 times more. (Deloitte)

This means that your company’s growth and success is directly linked to your company culture.

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And if you think you’re doing fine without thinking about it and it’s your staff not being ‘good enough’ or unable to find the ‘right people’ that’s the problem, then it’s maybe time to take a look in the mirror to find out the real problem might be your culture.

If you want your company to succeed once you’ve passed the initial one-man-band stage and have 5-10 employees, investing in creating a positive company culture is going to be a key factor in your company’s growth.

If you are not convinced that you need to invest in your company culture or need some reasons to convince your boss here are three key reasons to show them:

1. You will attract or lose customers as a direct result of your company culture

More than ever customers can see and pay attention to how you treat your staff with 29% saying that it’s an important factor when choosing to buy from a company. With 89% of customers being more loyal to companies with purpose and do the ‘right thing’ customers will choose with their wallets to spend with companies that align with their values. You are more likely to lose business if you are seen to be treating your employees badly or sitting on the fence about important issues. In a 2021 culture economy report, it was found that poor company culture is costing UK businesses a massive £20.2 billion per year.

2. Recruitment is expensive

In 2020 £36bn was spent on recruitment in the UK. Companies spend on average £14,895 recruiting a new member of staff. Being able to retain your employees because they love working with you, reduces your costs and increases the likelihood of employees recommending you as a great place to work to others in their network. This will also help you to attract more of the right people to your company and grow your business. How much has your company spent on recruiting to replace staff that have left last year? With 92% of professionals saying they would consider leaving their current jobs if offered another role with a company with a better reputation, can you afford NOT to invest in your company culture?

3. Hidden costs

The loss of business knowledge, disruption to the business and training costs when staff leave, is not often measured. This could cost the company on average £18,500 per employee who leaves, excluding the cost of finding a replacement. This detrimental cost to your business could be avoided or significantly cut if you created an environment where employees are happy.

If you or your boss thinks the company can’t afford to invest in your employees and create a positive culture then:

  1. The business isn’t sustainable if you can’t afford to treat people the way they deserve.
  2. Calculate how much your staff turnover is costing you in recruitment fees, downtime, disruption to the business, training, lost business, lost productivity, lost business knowledge and relationships, and I could almost guarantee it would be cheaper if you looked after your employees properly in the first place.

What companies should do instead?

First and foremost, employees should be considered as humans first with lives, passions and families outside of work. They are not “resources” to be used up like a piece of inanimate machinery for a greedy corporation to squeeze every last ounce they can for profit. Most of this is common sense and obviously, we’d assume you would naturally follow the laws on discrimination and harassment, but you’d be surprised how many companies do not do any of these (or if you’re still reading this maybe you’re not)!

  • Stop saying you have a “great/competitive benefits package” when all you offer is the basic minimum you can legally get away with by law.
  • Put salary ranges on job descriptions, stop asking what their previous salary was and pay people fairly and in line with inflation to live above the poverty line, not the bare minimum you can get away with. Currently when inflation and cost of living crisis is taken into consideration in the UK the average pay rise of 3.8% amounts to a 2% pay cut. (BBC 15/3/22)
  • Have a fair paid leave policy, not the bare minimum you can legally get away with. Holidays should be for actual holidays, not have to be used up for emergency childcare, going through a miscarriage or doctor appointments. 
  • Have a fair sick pay policy. Statutory Sick Pay (SSP) doesn’t payout to those who just need a few days off to recover from a cold/flu/stomach bug. It doesn’t make sense if an employee is sick why should they get penalised for not coming into the office/workplace and making everyone else sick? If they get full pay for sick days they can afford to take the necessary days to fully recover. Then they would be more productive when they return. Rather than struggling to work while being sick and not being able to work effectively, prolonging their illness and reducing their productivity for much longer (and potentially spread infections to other staff members who end up being off sick). If they had a day or two to fully rest in the first place it could save you more in the long run.
  • Stop making staff choose between their jobs and their families. The ability to pay the bills and care for their family should not be something your employees have to choose between. Support your employees with things like childcare/after school/holiday clubs, flexible working hours, remote working, having a nursery at the office if your company is large. Make it easier to be a good employee and a good parent.
  • Stop contacting employees outside of their contracted hours. It’s harassment. (Portugal has made it illegal!) If you have a brainwave in the middle of the night, write a note and send it in the morning. If it’s a legitimate emergency then they should get time back in lieu/overtime pay for working outside of their work hours. 
  • Be realistic with targets. Overloading staff without the resources or support they need to achieve your ambitious goals, so much they end up burned out is not productive or sustainable for your company long term. Being ambitious is all well and good but you will end up just not meeting your targets and have a demoralised workforce.
  • Focus on output rather than how many hours someone has spent in the office. If you want your company to grow, you need to move away from the old culture of rewarding those who stay in the office the longest. Many studies have shown that a 4 day week, with the same previous 5-day week salary, is more productive and companies like Administrate, Shopify or Unilever and countries like New Zealand are also trialling it.
  • Don’t hold employees’ wages/bonuses etc to ransom so they can’t afford to leave. If you had treated them well and they were happy in the first place then they wouldn’t be leaving. If they have other circumstances for leaving (health reasons/family reasons/an opportunity they can’t miss out on) then punishing them only harms your reputation and burns bridges. Wish them the best of luck and keep in touch, you never know when your paths will cross again or they might recommend you to their network as a great place to work.
  • Create more opportunities for your employees and management to get to know each other, which builds more empathy and support for each other.
  • Set personal growth goals in regular 1:1 meetings and focus on how you can help improve and support their mental health, grow their passions, as well as objectives employees, want to develop to improve their skill set to develop their career path. Support these with budgets for training and/or equipment.
  • Create an environment where employees can be open and honest and give feedback without fear of reprisals. Take constructive criticism positively to work on improving the company.
  • Embed company values into real actions and put your money where your mouth is. Otherwise, it’s not a real value and not ‘that’ important to you. For example, if you say one of your values is ‘caring’ do you give your employees opportunities to volunteer or support charities they care about? If ‘environment’ is a value, how much are you giving to environmental charities/planting trees/switching to electric vehicles etc? Or if “passion” is one of your values, how much are you giving to your employees to develop their passions outside of work? If ‘trust’ is one of your values, do you trust your employees to deliver their work without micromanaging them or clock watching? If ‘respect’ is a key company value does everyone treat the junior intern/cleaner/receptionist with the same respect as the CEO?

Building a strong company culture, good or bad, doesn’t happen overnight, but through the cumulative actions you take every day.

All the hard work around focusing on and living by your values really pays off.

Whichever values you choose to live by at your company, it’s worth trying to really stick to them, act on them and learn from these experiences.

Personally, at GearedApp having a great group of people that you feel really aligned with is special and a lot of fun. There’s a huge reward waiting for you there.

When the timing is right for you and your company, invest in the time to really think about your culture and values. Don’t be afraid to let your values impact what you do next. You can read about our company values here.

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