It may sound like a buzzword from an office with nap pods and dream boards, but building a culture-first company has shown significant returns. A Harvard Business School study conducted over 11 years found that companies with performance enhancing cultures saw an average increase of 901% in their stock price (versus 74% percent for a control group). Improving company culture has been linked to more engaged, productive employees, which leads to loyal customers and a more profitable bottom line. Company culture is so essential to success that many founders will set principles before starting the hiring process.
So what, exactly, does a “culture-first company” entail? The term has two interpretations: placing highest importance on its culture, or establishing culture early in the founding process. Culture should not be a static list of words that management has deemed motivational (as one founder put it, “A publically displayed list of ‘company values’ does not a healthy culture make.”), but rather, it provides a framework that permeates every aspect of a business. It’s less important that your employees can recite back the company’s mission and more important that they live it every day.
Strong culture was found to be the top indicator of employee engagement. It provides intrinsic motivation for an employee to perform well at their job by providing a sense of purpose (though extrinsic benefits like salary, benefits and other creative perks are also important to employee engagement). Tasks induce clock-watching can feel less monotonous if an employee can connect them to the company’s higher goals. Culture should govern aspects of business like vacation policies, response to customer inquiries, sales calls and growth plans. In a culture-first environment, employees will feel more confident in making autonomous decisions, as they can hold their logic up to the company ideals. (Don’t forget: job autonomy is directly tied to employee happiness. Providing employees with the tools to do their job can help companies avoid costly attrition).
One of the most important aspects to company culture is having leadership that walks the walk. A study by CultureIQ found that the key differentiator in companies with winning cultures was having management that showed confidence and clearly modeled the organization’s values. This was best exhibited by demonstrating to employees that they both listened and cared. Ultimately, it is leadership’s responsibility to drive culture with intention.
Again, putting focus on creating a positive corporate culture has very real monetary results. The Harvard Business School study mentioned earlier compared companies in similar industries but with a difference in culture (for example: American Airlines vs now-defunct Northwest). Though they specified that the variables were far from isolated, they overall found significant differences in revenue growth, employment growth, stock price growth and net income growth in companies with distinct cultures.
One big question that pops up with culture fit is the role it should play during the hiring process. Sure, it makes sense that employees should identify with the company’s defined values, but that doesn’t always mean that the best candidate will pass “the beer test” – and in fact, this may be a way to cloak discrimination. A trusted staffing partner will absolutely ask questions about company culture, and could aid in hiring for fit, as the process is structured to quantifiably measure candidates against values, as opposed to being a “feeling” from a hiring manager. Remember that diverse teams can make better decisions, and avoid the problems of echo chambers.
Overall, a strong culture is a huge asset to companies, in terms of both happy employees and monetary returns. With a win-win situation like this, it is definitely worth the time it takes to put those unspoken values that get you through the day down on paper, to help recruiters find you that perfect new hire, and to help current employees enjoy their work.
Finding and hiring the talent that fits your company culture takes a knowledgeable and consultative approach. While you focus on achieving your goals, you may need urgent help or temporary associates to take care of the demands of a challenging business environment. With our team of staffing professionals and recruiters who are experts in their field, you can trust The HT Group as your business partner to provide total employment solutions.
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