What is employee engagement? How do uru measure it? And does it really lead to increased employee retention?
How do you keep and retain your best workers without just throwing more money at them?
These are all questions you may be asking yourself.
Like most corporate companies, you may have tried engagement initiates in the past. You may have even achieved a fair amount of success. Yet, once those 6, 9 or 10 weeks are up, how long does that success last before things go back to “normal”?
How do you truly create a company culture that makes people want to stick around?
What drives our fascination with certain organizations? From Google’s famous employee perks to Uber’s toxic “bro” environment, companies are often known for their organizational cultures as much as their products and services.
Nerds like me feel comfortable exclaiming that culture is more important than ever in engaging employees and gaining a competitive advantage. But for people who don’t spend all of their waking hours thinking about this stuff, it can be hard to define exactly what culture looks like, much less successfully implement changes to optimize it.
In our work, the problems our clients struggle with are always cultural. But because culture is an intangible force that influences every aspect of the daily work experience, addressing dysfunctions when they occur requires a look beyond the surface.
Is Employee Retention and Company Culture One in The Same?
Culture is more than bean bag chairs, yoga classes and after-work happy hours. It’s more than the dictionary-defined “shared set of beliefs, values, and norms that guide the behaviors and decisions in a company.” In fact, culture includes everything from the mission of the company to how people interact with their managers, to how problems and conflicts get resolved.
Whether intentionally cultivated or not, every company has a unique culture or “personality,” often set by its leaders and passed on to employees. As Frances Frei and Anne Morris write in the Harvard Business Review, “culture tells us what to do when the CEO isn’t in the room, which is, of course, most of the time.”
A unified culture empowers employees to act independently according to shared values, creates a sense of identity and allows workers to feel connected to a common cause. It’s also one of the things that sets great business apart from their competitors — the secret sauce that’s hard to replicate.
The concept was popularized in the 1980s largely by former McKinsey & Company consultants Thomas Peters and Robert Waterman, who co-wrote the bestseller In Search of Excellence. In the book, they analyzed some of the most successful companies at the time and concluded that a strong, distinct culture was the secret to their success.
It’s been nearly 40 years since the conversation was formalized. Since then, culture and employee engagement have become two of the most important priorities for business leaders. But decades of experience haven’t necessarily yielded great advances.
Majority of Companies Spend Money and Resources to Improve Company Culture. Why Is Employee Retention Still a Problem?
Whether it’s getting worse or just being measured more closely, culture remains a huge issue. In fact, 80 percent of CEOs and other senior executives say they’re “deeply concerned about employee engagement and culture,” according to a recent Deloitte Global Human Capital Trends Report.
Why? As companies continue to struggle with low engagement year after year, employers need
to do more to retain talent and limit turnover-related expenses. Only a third of American employees feel engaged in their jobs, according to Gallup’s State of the American Workplace Report. That means the vast majority of people at work today either don’t feel connected to their jobs—or even actively dislike them.
This is a big problem for employers because unhappy, disengaged workers cost U.S. companies
more than $300 billion a year. On the other hand, engaged employees have been proven to be
more productive, innovative, loyal, and ultimately more profitable.
In fact, a culture of engagement can increase revenue by up to 18% per employee, says
Gallup. And in high-turnover companies, the most engaged units see 24% less turnover.
Investing in employee engagement is essential to attracting and retaining top talent and
improving business outcomes.
The Workplace Of The Future: A Focus On Engagement
It’s no secret that the models of employee engagement that worked for companies 20 years ago just won’t cut it today. Once upon a time, the notion that companies had to do anything more than provide a safe environment and paycheck was laughable. “They outta be grateful to have this job and if they’re not, there are plenty of others who will be.”
Meh. Not so much anymore.
In an increasingly digital world, modern employees view work differently and demand much more from their jobs than their predecessors. Millennials (who are between 22 and 36 years old in 2017) now make up the largest share of the American workforce, bringing with them a host of changes to the way business is done.
This new generation of employees seeks value and purpose in their jobs, values growth opportunities more than compensation, and see their managers as coaches, not bosses. They feel less loyal to companies than Generation X and Baby Boomers, with 44% planning to leave their company in the next two years.
Moreover, employees of all ages now have more options than ever when it comes to finding
new jobs. People are willing to change jobs more frequently, and more often than not, they are
looking outside their current company for new opportunities. 93% of workers say they left their company the last time they changed roles, and about one in three people changed jobs in the past three years.
As businesses compete for talent, company culture has emerged as a competitive branding tool. Websites like Glassdoor — which allow job candidates to read employee reviews and evaluate a company’s culture — have changed the game. In fact, earning a place on lists like Glassdoor’s Best Places to Work can position a company for success, as the best companies, as the best companies to work for consistently outperform the stock market, according to Glassdoor.
As such, companies will need to drastically reinvent the way they approach HR if they want to remain competitive and stand out as an in-demand workplace for both Millennials and other workers.
But What Qualities Separate Good Companies From Mediocre Ones?
The right culture for a particular company is as unique as its business objectives. That said, there are a few things great employers have in common.
According to Great Place To Work, which helps companies improve the cultures of their organizations, the best workplaces are ones where employees have trust in their co-workers and managers, pride in the work they do, and a feeling of camaraderie. Organizations like Great Place To Work have codified what makes a work culture solid, and companies now pay big for the ability to display such certifications.
A Bersin by Deloitte analysis goes even further, identifying five essential components for
creating a simply irresistible organization: meaningful work, hands-on management, a positive
work environment, growth opportunities, and trust in leadership.
That’s certainly the case at Bain & Company, which has been named three times by Glassdoor as the best place to work in the U.S. Employees rave about not only the company’s generous benefits, but the supportive environment and collaborative, team-oriented approach.
Bain’s popularity proves that you don’t have to be a sexy tech company with a ton of free perks to win over employees. You just need to create an environment where employees feel supported, valued and connected to your mission.
How To Keep Top Talent From Leaving
Although most business leaders understand the importance of engagement, too few understand how to make it happen. With that in mind, here are some time-tested strategies for employee retention:
1. Make humanity a company-wide metric.
Too often, C-suite executives treat engagement as an add-on program, instead of a strategy aligned with business goals that have concrete financial repercussions tied to metrics and benchmarks. The HR team is tasked with “improving engagement,” without adequate buy-in throughout the company or effective communication about the goals of the program. Sadly, initiatives like this are doomed to fail.
For engagement initiatives to succeed in today’s rapidly changing environment, they must take into account all aspects of an employee’s experience, including values alignment, skill development, job ownership, relationships with managers, work-life balance, and more.
2. Think beyond “happy.”
People often confuse engagement with making employees feel happy or making work fun via company picnics and birthday celebrations. While these are great too, true engagement happens when employees feel connected to the company and feel empowered to contribute to the organization’s goals.
In a culturally compelling organization, workers produce “discretionary effort,” going beyond just the bare minimum to do their job well. The result is increased productivity, higher customer satisfaction and a lasting competitive advantage.
3. Ask employees then act on the results.
The best way to find out what matters to employees is to ask them. Surveys do have a place in improving engagement when done regularly and with a clear purpose. If you’re on a budget and doing this DIY, be sure to promise anonymity. Write the survey to identify causation behind the answers, and ask for suggestions along the way. While less easily codified, open-ended response options allow for tremendous insight.
Another great source of insight is focus groups. Once you’ve gathered broad input via survey, you can often slice and dice the areas of highest and lowest engagement in the company. Craft focus groups to tease out the contrasting factors. Hire external facilitators to ensure employees feel safe to respond transparently.
One challenge businesses face when conducting insight initiatives is that they don’t share the results widely or act on what they’ve learned. Word will be out that the company is looking in the mirror. So it’s important to foster a culture of transparency by reviewing engagement survey data with as many people as possible and committing publicly to make changes based on what you’ve learned.
4. Provide opportunities for career development and learning.
Today’s workers view their careers as opportunities for development, and the best companies recognize this. Millennials, in particular, value professional development and coaching, even more than compensation.
Companies that encourage skill acquisition create pathways for moving up, and providing consistent feedback is an integral piece of the puzzle. Having an internal job board is just the beginning. Mentorship, internal “university” programs, functional and geographic rotations, task force assignments, real-time performance evaluation, discretionary learning allocations, and development time budgets all foster a generative workplace culture in which employees know their growth is the foundation of the company’s growth.
When it’s time for a culture shift
With change a given, cultures must change as well. Companies must be able to react quickly to keep up, and that isn’t limited to responding to economic or competitive landscape shifts. Ideally, your company’s culture is something you regularly tweak in response to changing business needs — but there are times when a major culture shift is necessary.
We see this with clients. Organizational blind spots include dysfunction, harmful competition and other unhelpful behaviors that are tacitly tolerated by the values held by leadership. What results is a culture that we call “human hostile.” If this sounds like your organization, then you need to take immediate steps to turn things around.
But there are other less dramatic reasons why your company might consider a significant cultural transformation, such as growth or a merger. Naturally, your company will operate differently as a fledgling startup than a huge corporation with thousands of employees. Likewise, taking on or being bought by another company often requires changes to the established way of doing things.
Finally, you might want to revisit your company’s culture if it gets in the way of achieving your business objectives. Take Ford, for example, which narrowly avoided bankruptcy in the 2008 recession. In the last decade, the company has transformed itself from just an automaker into an innovative “mobility company” working on today’s biggest technological advances, such as driverless cars. But the changes don’t just happen by starting a new division. They happen by introducing new ways of thinking and embedding processes to make those ideas drive new behaviors.
The first steps to change
Once you’ve decided to implement a cultural intervention, there are several steps you can take to give yourself the best chance of success.
1. Diagnose the existing culture.
The first and most important step is to understand your current culture. What deeply-held beliefs, values and norms exist now and how do they influence people’s behavior? Leveraging surveys and employee insight initiatives are the starting point. Beyond that, it means engaging leadership in the conversation to uncover where they may have inadvertently become the problem. Take the time to figure out what’s going well and what isn’t before attempting any changes.
2. Align cultural change with business goals
Don’t just change your culture for the sake of it or because you read a great article in HBR. Whether you’re reacting to a new opportunity or trying to fix a problem, any changes you make to your company’s culture should be strategic and directly tied to performance, both in the marketplace and as measured by human metrics internally. Where are you trying to go and what will you need to get there? Identify not only the behaviors and thought processes that inhibit progress, but the positive aspects of your existing culture that give you a leg up on the competition.
3. Secure buy-in
While buy-in from the top is key, you’ve got a bunch of human beings who will make or break whatever initiatives you devise. Getting them on board means giving them a voice in the direction, the processes and the repercussions, whether positive or negative. Change initiatives often fail because either the organization views them as tangential to the business or a small group of senior leaders make all of the decisions and try to hand it down to the rest of the company. Instead, it’s crucial to solicit input from people at all levels of the company on new systems and processes as well as what challenges they are facing. People will be much more likely to support changes if they believe they were a part of the process.
4. Have a visible C-suite champion
As we’ve referenced throughout, culture and employee engagement often get siloed as an HR initiative, with little involvement from the CEO and other key leaders. However, engagement programs initiated by a senior executive are often more successful. While cultural change should be inclusive, visible involvement from leadership will help tremendously with messaging (sharing a compelling narrative about the goals and expected outcomes), modeling new behaviors, and reinforcing any rewards and performance structures put in place.
5. Chunk it down
Even with all the right steps and players on board, changing culture is difficult and time-consuming — particularly when norms have been deeply embedded over time. Forget trying to completely overhaul the very core of your company. The idea here isn’t to change who the company is, rather to leverage a new how in getting things done. With a strategic vision of where you are headed long term, focus on changing a few key behaviors at a time and keeping people at the center of everything you do. Without their buy-in, cultural change will only go so far.