Find out why company culture is important for recruiting and retaining top talent and how to create a great company culture for your business.
- A fantastic company culture can reduce recruitment-and-retention costs.
- Employees rank company culture highly when choosing a career move.
- You need a mission and vision for your company to successfully create a great company culture.
- This article is for business owners who want to create a company culture that works for all employees.
Your business is only as good as the people who work for it, which is why company culture is so important. If you follow the right steps, you'll be on your way to creating a fantastic company culture. Read on to learn how making your business a great place to work benefits both your employees and your company, and the seven steps to take to develop a positive company culture.
What is company culture?
Company culture is the business's shared values, goals and behaviors. It affects how employees interact, the way work is executed and the decisions a company makes. Company culture includes the following elements:
- Company mission. Your company mission is the purpose of the enterprise. It says why your business exists, what you hope to achieve and what you value. A strong mission is important because it gives employees something to rally around – a reason to work at your company (beyond a paycheck).
- Management style. There are several management styles a business can adopt when creating a company culture. The key is to stick to the one you choose. [Read related article: What Kind of Leader Are You? 9 Leadership Types and Their Strengths]
- Work environment. When establishing a company culture, consider how you want your employees to collaborate. If you are in an office, is it an open space or walled-off cubicles? If everyone is working from home, are they required to check in regularly or on an as-needed basis? Ask yourself these questions when creating the work environment you want for your business.
- Expectations. Employees want to do a great job, and it's up to the business owner and executives to define what that entails. With a good company culture, employees should know what is expected of them and the consequences if they fail. The more transparent you are, the better the company culture you'll create.
- Goals. Businesses need goals to grow, and employees must understand those objectives to meet them. Ask employees to strive to meet milestones that contribute to the business's goals. Doing so can increase productivity, particularly if there are incentives for meeting goals.
Key takeaway: Company culture includes the organization's mission, management style, work environment, expectations and goals.
What are the benefits of a good company culture?
A great company culture has benefits for employers and employees alike. Here are some of the big ones:
Benefits for employees
If you create a great company culture, your employees will look forward to coming to work and will take pride in their output. Here are some more benefits for employees:
- Transparency. A 2013 survey by TINYpulse found that transparency is the No. 1 factor in employee happiness. When your business's culture is focused on transparency, everybody knows what's expected of them, how business is faring and the direction of the company.
- Positive team morale. A good company culture can bring employees together. When everyone shares values and a mission, your workforce becomes a team.
- Job satisfaction. If your employees like their work environment and are happy with the people they work with and for, they are more likely to be satisfied in their jobs.
- Improved well-being. Toxic work environments can harm not only productivity but also your employees' health. Several studies have shown that employees at high-stress companies spend more on healthcare, miss more days of work and experience more on-the-job accidents, Harvard Business Review reported. A healthy company culture can do the opposite. When your employees don't feel overwhelmed or afraid of losing their jobs, their well-being may improve.
Benefits for employers
A fantastic workplace culture benefits business owners, too. Here are some of the advantages:
- Reduced recruitment-and-retention costs. Recruiting and retaining employees can be expensive. A key way to reduce turnover is by creating a fantastic company culture, because employees will stay with the company if they are happy there.
- Increased engagement. Companies that foster an open and collaborative work culture tend to have engaged employees. That engagement has a direct impact on productivity and, in turn, the company's bottom line.
- Healthier employees. Work-life balance is essential to keeping top talent. A company culture that supports a healthier work-life balance will have healthier employees overall, and there will be fewer reasons for workers to take sick days.
- Improved image. If you offer employees a fantastic company culture, people will hear about it, either by word of mouth or on online company review boards. When employees tout your company's great culture, it will be a lot easier to recruit talent.
Key takeaway: The benefits of a good company culture for employees include transparency, positive team morale, job satisfaction and improved well-being, and the benefits for businesses include reduced costs, increased engagement, healthier employees and an improved image.
How company culture can be a key to success
Company cultures are as unique as the business owners who create them. The successful ones are grounded in the reasons they started the business.
Take Melissa Wirt, a mother of five and owner of Latched Mama, an online nursing-clothing store. She started her small business on her dining room table and now has more than 30 employees, most of whom are moms. Latched Mama is now headquartered in a 16,000-square-foot warehouse. Wirt credits a large part of her success to her company culture.
"When it came time to start hiring employees, I had this dream of hiring those who could use love and support," Wirt told Business News Daily. "I also realized I wanted to hire moms. They can speak to moms better than someone who doesn't know motherhood."
That mom-centric approach also extends to the work environment at Latched Mama. Moms are encouraged to bring their babies to work, with most children transitioning out around 15 months. At Latched Mama, employees are moms first. If a child is sick, they stay home; if a school play is in the middle of the day, they go; if a mom is having a bad morning, a mental health day is allowed.
"I had a lot of people tell me it wasn't going to work," Wirt said. "Nobody has abused it yet."
Key takeaway: When a company culture is aligned with the business's mission, it has an increased chance of success.
How to build a fantastic company culture
Creating a great company culture takes time and commitment, and it must be built on a strong foundation. Follow these seven steps to ensure your company culture is a success:
1. Define your purpose.
Successful company cultures are grounded in a mission, a vision and core values, which should drive all of your decisions.
For example, are you going to be socially conscious? What are you doing to embody your core values and goals? Ask yourself those sorts of questions, said Angela Simpson, a human resources knowledge advisor at the Society for Human Resource Management.
2. Conduct research.
To create a fantastic company culture, you have to understand what motivates your employees and what matters most to them. For example, a flexible work schedule is great only if that's what your staff craves.
You also have to look at the impact any actions will have on your company's bottom line. For example, it wouldn't make sense to offer free meals if that would end up bankrupting the business.
3. Get employee feedback.
Whether you're creating a company culture from scratch or trying to reinvent an existing one, employees' voices must be heard. If employees aren't happy at work, their productivity will suffer.
Survey employees to get a sense of how they feel. Here are some examples of questions to ask:
- Do you feel your opinion is valued?
- How many times have you spoken to your supervisor in the past three months?
- Do you have the resources and tools necessary to do your job?
- Do you think your manager listens to you?
4. Create your plan.
Armed with your research and employee survey results, begin to create a company culture. That means crafting your mission, listing the company's values and planning how the company will achieve its goals.
When developing your plan, remember that, in addition to focusing on your company as a whole, your company culture should account for employees' individual circumstances, said Torin Ellis, an HR consultant and founder of The Torin Ellis Brand. "Culture starts in the community," Ellis said, and a company culture should be able to meet employees' unique needs.
5. Get input on the plan.
Before you implement your plan, get input from executives and employees. You don't want to create a company culture everyone despises. Listen to the feedback, and be willing to make adjustments. A company culture evolves with the business and its employees.
6. Implement your plan.
Once you've finalized your plan and everyone is on board, it's time to begin implementing it. That doesn't mean changing the entire organizational structure overnight. Rather, make changes slowly – for example, by hiring employees with shared values or tweaking management requirements.
7. Monitor progress.
Evaluate what's working and what isn't. Communication and transparency are key components of a successful company culture. If changes are needed, don't be afraid to make them.
Creating a fantastic company culture takes time, but if you stick to your plan and tweak it along the way, you'll have a vibrant and flourishing business that is a coveted place to work.
Key takeaway: To create a fantastic company culture, define your mission, vision, and goals; get feedback from employees; monitor progress; and implement any necessary changes.