the five key ingredients of a successful corporate culture
Finding exceptional talent has never been easy, but given current developments in demographics, education, and technology, the talent shortage is becoming an increasingly pressing problem. The results of a recent Randstad survey show that employers are specifically looking for talent with the right combination of hands-on job experience and outstanding soft skills.
At the same time, a skills shortage is apparent across major industries and is negatively impacting business. Furthermore, where talent is most needed, it is least available – a mismatch that is not likely to disappear soon. Add to this the fact that employees these days do not seem to be very loyal to their employers and the urgency to find new ways of sourcing – and retaining – exceptional talent seems obvious. In my view, corporate culture has a decisive role to play here.
the benefits of a good corporate culture
In the words of job search expert Allison Doyle, “Company culture is the personality of a company and defines what a company, from an employee perspective, is like to work for.” When it comes to a company culture, what really matters the most is that it is a good company culture, because a good company culture helps you recruit and retain talented people and be more profitable as a business. A Great Place to Work® study shows that the companies with the best company culture typically experience 65% less voluntary turnover than their competitors, saving money on employee recruitment and training. Furthermore, these companies perform much better overall. In fact, these employers provide more than twice the return than the market average. Another clear advantage of a good company culture is that employees accept lower salaries if they can work for a company with a culture they value and appreciate.
the culture trend on job boards
When it comes to job boards, I am seeing a clear trend. On sites such as TheMuse, HireQ, KareerMe, and BetterWeekdays, you see a significant emphasis on company culture, and job listings take second place. They show pictures and videos of what it is like to work at a particular company, what makes it unique, and so on. They are also increasingly matching opportunities with people’s lifestyle. Are you a night owl or an early riser? Are you better on your own or in a team? Do you like to travel? We have got a job that works for you and your lifestyle. Of course, the goal is still to make workers browse a job, but they hope to create a stronger attraction by showing them the culture first.
what makes a great company culture?
So how can a company make sure it is a great place to work? In this context, it is worth being aware of the psychological power of “social contagion.” People are inclined to follow others, both in a positive and a negative sense. Think of the Wall Street crash in 1929, or political riots in which normally law-abiding citizens suddenly go mad and create chaos. Sometimes, people don’t manage their own behavior; rather their behavior manages them. People have a tendency to do what they are expected to do! Tell them they are exceptionally smart and they will rise to the occasion and do something incredibly difficult, performing much more effectively than otherwise.
Bearing this in mind, and after careful analysis of the most popular employer brands, I believe that the five most important ingredients for a great company culture are growth, happiness, abundance, significance, and meaning.
- Growth. One thing that companies with great cultures do is they enable employees to learn new skills. One example is Google. The search engine giant believes that people with a college degree are not necessarily the best hires. Instead, they look for candidates who may not have a degree but can process things quickly and logically. Google will train them on the job. At Randstad, we take a similar approach with our Randstad University, where employees can take online training courses that help them improve their current skills.
- Happiness. Work is better with friends. According to Gallup research, people who have friends at work are more productive. In fact, those who have a best friend at work are seven times more likely to be engaged with their work, and close friendships at work boost employee satisfaction by almost 50%. It’s important that you have team-building exercises, especially if your employees frequently work remotely. Staff.com, for example, organizes video game sessions several times a year, when everyone can come together and play games online. Sagacious Consultants organizes an international vacation for its staff, with all expenses covered.
- Abundance. Abundance is not necessarily the same as offering huge amounts of money, but it is all about offering employees the opportunity to have a luxurious, lavish lifestyle, even if it is just illusionary. For example, AOL offers lavish offices that employees find hard to give up. Netflix offers employees unlimited vacation time, a policy that isn’t abused because workers want to perform well and keep their job. On average, they take just three weeks off. Another good example is Mindvalley, a great company that fosters entrepreneurship. Employee are encouraged to pitch ideas. If company leadership invests in it, the employee is given partial ownership and management responsibilities and shares in the profits.
- Significance. Employees want to feel that the work that they do makes a difference. In the Stengel Study of Business Growth, research consultancy Millward Brown found that the top 50 high-growth brands were, on average, more likely than their competitors to be driven by ideals. These brands collectively outperformed the S&P 500 companies by almost 400% over 10 years. The study concluded that the best businesses “were built not just on innovative product or service ideas, but on ideals.” Good examples of organizations that have rallied around a particular ideal are Home Depot (veterans), Ford Motor Company (environment), Starbucks (diversity, gay marriage), Chick-fil-A (traditional marriage,) and Delta (breast cancer research).
- Meaning. Finally, employees seek meaning. They are attracted to companies that enable them to work towards a huge, seemingly impossible goal. In this context, consider a quote from Antoine de Saint-Exupery’s famous book, The Little Prince: “If you want to build a ship, don’t drum up people to collect wood and don’t assign them tasks and work, but rather teach them to long for the endless immensity of the sea.” In other words, you need to give employees a goal that seems impossible to achieve. They will then be led by a vision and pursue it. You see this reflected in different mission statements. For example, Khan Academy uses “To provide a free world-class education to anyone anywhere.” Salesforce.com uses “The end of software.” And, of course, Disney has the famous “To make people happy.” Talk about impossible!
The ultimate culture formula Once you have all the right cultural ingredients in place, it is very important that you safeguard this “good” corporate culture. To do that, you need to make sure that the leadership and managers set the right example. In other words, the culture should be “blessed” by the leadership and “nurtured” by middle management. Remember that people do not leave companies, they leave managers. In addition, you should let social contagion take root and set expectations of high performance. The expectations will then be met by your employees, again and again. If you do all these things right and consistently, your corporate culture will help you to successfully recruit – and retain – exceptional talent.