In the past decade, salary rates have become lower in priority for the workforce in general. Company culture has become a huge factor in how people assess whether they want to apply for a job or not. Positive culture has become pivotal for running businesses; in fact, more than 50% of executives strongly agree that company culture has a huge impact on productivity, creativity, profitability, firm value, and growth rates. Some companies that are recognized for being frontrunners in establishing amazing company culture are Google, Twitter, Zappos, and Southwest Airlines, to name a few. Google has an amazing “campus” and employees enjoy multiple perks such as free meals, dog and kid-friendly workspaces, gyms and even an outdoor beach volleyball court. However, fun perks alone do not a company culture make, it’s mainly about the procedures, processes, ethics, and code of conduct that the company’s leadership instills and expects of all their team members.
Why is Company Culture Important?
A study by Deloitte shows that 94% of executives and 88% of employees believe a distinct workplace culture is important to business success. Further studies show that employees rate their place of employment 20% higher when their company culture puts value in collaboration, value alignment, and mission. 13 companies that have appeared on Fortune’s annual 100 Best Companies to Work For list every year also see higher average annual returns, with cumulative returns as high as 495% instead of 170% (Russel 3000) and 156% (S&P 500). Forbes also found that companies with a strong culture had an increase of at least 4x in revenue growth as well as a.74% stock jump when associated with any “Best Place to Work” accolades. Finally, also according to Deloitte, 82% of respondents to their survey believe that culture is a potential competitive advantage.
A strong company culture also ensures that you attract the best talent. 74% of surveyed HR professionals say a company’s reputation is critical for successful recruiting. Building an employer brand and company culture helps companies hire the right people (55%), get a greater number of qualified candidates (49%), increase employee referrals (41%), and have more diverse candidates (32%).
Your company culture also plays a huge factor in employee satisfaction and retention, therefore, increasing productivity and directly affecting your revenue. Happy employees are 12% more productive. Studies have found that over a period of seven years, companies with more engaged workers grew revenue 2.5x as much as companies with less engaged workers.
Employees who don’t like their organization’s culture are 24% more likely to quit. Employee Benefits News reported in 2017 that turnover can cost employers 33 percent of an employee’s annual salary! Not to mention the other hidden costs, such as time to find and train a replacement, the gap created whilst looking for the right person, etc.
Importance of Leadership in Company Culture
Company leaders are integral in ensuring that they have a good and well-functioning company culture.70% of the variance between lousy, good, and great cultures can be found in the knowledge, skills, and talent of the team leader. Surprisingly, only 12% of executives believe their companies are driving the ‘right culture’, and less than one in three executives (28%) report that they understand their organization’s culture. They know the culture is important, but don’t understand it. Furthermore, Only 19% of executives believe their company has the ‘right culture’. 86% of employees at strong cultures feel their senior leadership listens to employees, compared with 70% of employees at non-winning cultures.
Finding the right person to be part of your team is no longer simply about their skills and experience. Finding someone who will fit in with your company culture is essential.
Scale Virtually believes in matching Virtual Assistants who are aligned with business owners and their teams. This is an important part of our process in providing remote solutions for businesses that are looking for leverage to scale and grow their business. As we’ve experienced, skill is but one factor in the recruitment process. We have a world class recruitment and matching process that has been fine-tuned to factor in company culture.