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Is the lack of Company Culture the main cause for Employee Attrition?

I have personally spent over a third of my life with Ogilvy, a leading communications consultancy. When asked every now and then about my reason for such a long stint, my prompt answer would be ‘Culture’. Managers, Appraisals, Perks, Office Environment, Flexibility, Work Load, Kind of Work, etc are all part of a job but what really leaves a lasting and compelling impression is a company’s Culture. Businesses in India have traditionally been loyalty driven. This is in turn, fostered by the way employers and colleagues interact with one another. Contrary to the perception that ‘money’ is the biggest factor in employee retention, it is in fact the ‘company culture’ that often plays a more important role. With rising competition in almost every business segment, companies are becoming increasingly focused on profits and market domination. The frenzied rat race has become the guiding principle while forming growth strategies in the current century. While this does work in many cases, the question to be asked is whether it is a robust long term strategy while building a company that can become an institution. Impact of Work Culture on Employee Retention If all that a company cares for is its growth and profits, then its employees would also focus only on their growth and more money. Employee retention has become a challenge and it is not uncommon to see them packing their bags to move to a new workplace barely months or even weeks into their current job. While at times the HR teams attribute such early desertions to the employee’s lack of integrity or willingness to work, the truth could be incompatibility between the organization’s culture and the employee. Gallop undertook an analysis of 1.4 million employees and the study revealed that the best engaged employees outperformed the least engaged employees by 10% on customer ratings, 22% in terms of profitability, and 21% on productivity parameters. Research related to employee engagement and work culture in companies also brought to light some more compelling findings.
  • Employees that do not feel recognized for their work are twice more likely to quit within a year than those who feel valued.
  • About 86% respondents stated that they were unwilling to work for a company that had a bad reputation among former employees or general public.
  • A massive 58% people stated that they had either left a job in the past or would leave it if the ‘work culture’ was negatively impacted by office politics.
  • A company culture that is vibrant and appealing results in 33% improvement in revenue generation.
It is not only the new employees, but even the long-term ones who often feel the pinch of incompatibility becoming more unbearable over a period of time. All this results in businesses losing their best and senior most talents to the ‘cultural issues.’ Let us take the case of Ajay a seasoned professional with over 10 years of experience under his belt. Ajay had been working with his previous employer for over a decade. He used to proudly discuss how his work was valued by the management and he was often a part of strategic board-room meetings despite not being a part of the top management in terms of designation. Then he went quieter. He started avoiding talking about his workplace and then went incommunicado for months. I caught up with him over the festive holidays last year and he said, “I am going to quit my job soon.” Coming from someone who used to feel invaluable and extremely happy with his employer of 10 years, it was quite shocking. He further elaborated that while he still faced no issues regarding his salary, it was the work-culture that had become unbearable. What had actually happened was that, during summer that year, the company hired a new CEO who came in with a Business Management degree from a reputed university. The CEO ushered in radical but harsh changes in order to cut costs and maximize revenues. As a result, team sizes were cut, but work load was increased. Increments and employee benefits were cut and the opinion of Ajay or other mid-management personnel was no longer sought or paid attention to. Enhancing ‘Employee Retention’ with Employee Engagement Businesses are run with ‘growth’ and ‘profits’ being primary objectives and it is fair on the part of any organization to strive for more. However, as the above case highlights, it is the shift from the established practices and culture cultivated over the years that can alienate employees from the employers. Well-aligned goals, thought processes, values, work approach, engagement and inter-personnel behaviour define an organization’s culture. It is imperative that there is uniformity in a company’s vision, and alignment of thoughts between the leaders and their teams and approach to work. Employees are unlike the ‘machines’ that we invest in and expect to deliver the desired output. Their needs are not as simple as “you are paid to work so focus on your work.” Social bonding, understanding work-life balance needs, and employee encouragement are factors that can no longer be ignored in a business environment where availability of quality talent is becoming increasingly scarce. Some of the factors to consider while developing a company’s cultural identity:
  1. There should be consistency in the organization’s goals, ethics and approach to work. It is important to keep the existing employees feeling motivated, valued and involved in future strategies so that they are acclimatized to changes and the need for them.
  2. While hiring new employees, consideration should not only be given to their expertise or past work experience, but also being a ‘culture-fit’ in the organization. To engage someone who is in sync with the company culture would not only be more cost-effective in comparison to hire and fire practices, but also better for the company’s market reputation.
  3. Companies must have a roadmap and vision for their employees. Employees stick with companies for long when they know that they have a secure future in the company. Regular appraisal processes, transparent management structure and honestly in approach are other qualities that employees appreciate as a company’s culture.
In conclusion The 21st century business leadership is aware of this ‘shift’ towards ‘values and organizational culture’ and it is observed that most of the best performing companies are those that invest adequately in ‘cultivating a company culture and ensuring employee engagement.’ Practices like ‘Town Hall’, periodical ‘corporate excursions’, training and educational support etc. are making the business environment more democratic as well as vibrant.
01 Apr, 2019
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