When Your Workplace Culture Thrives, So Will Your Business
People are at the core of every organization, and an organization’s employees – its people – are the most important investment it will make. Even as technology advances and capital shifts, it is the leadership and personal contributions of the individual employees who comprise an organization’s workforce that ultimately set it apart from competitors.
A Thriving Workplace Culture Can Pay Dividends
Great Place to Work research shows, time and again, that organizations with a thriving workplace culture tend to grow significantly faster than peers, and the “best” companies that we study year after year offer valuable lessons on building an organizational strategy that puts employees at the center.
In the last year, Best Small Workplace Ruby Receptionists nearly doubled its staff and raised $38.8 million in private equity. Along with these changes came an even more intense focus on the people-centered culture that helped create that success in the first place. This focus included adjustments like bumping minimum hourly pay to $15 per hour (with a raise at employees 6-month mark and annual increases thereafter), and maintaining unique perks like five-week sabbaticals after five years with the company. A plethora of activities like holiday galas, onsite fitness classes, movie nights and happy hours all lead to 94% of employees agreeing that “this is a fun place to work.” On a deeper level, 95% of employees also report that “people care about each other here.”
Great workplaces foster an environment of communication, fairness, respect, and trust - while creating opportunities for people to grow as employees, and as individuals. Take Best Medium Company Atlassian as an example, where 98% of employees say they’re proud to tell others where they work, and the same percentage also agree they can count on their leaders to act with integrity.
These statistics reflect a fundamental confidence employees have in the organization, one that excels beyond the goodwill already instilled by benefits and perks like premium-free health insurance and paid days off to volunteer. What’s more, Atlassian’s people-centered approach is working. Despite a highly competitive tech recruiting market, Atlassian grew its staff by 80% in a single year, and early last month filed for an IPO at an estimated valuation of $3.3 billion just 13 years after its founding.
Great Culture = Great Talent
In investigating turnover rates at recognized Best Companies, Great Place to Work found that yearly voluntary turnover among companies on 2014’s Best Small and Medium Workplaces List averaged just 8%, compared with 21% nationwide. Organizations regarded as having happy employees and great culture not only attract valuable talent, but also do a better job of retaining it.
Though these best companies represent a wide range of industries (from construction to financial services) five years of survey data show consistent improvement among these great workplaces in areas like fairness, and respect for employees' lives outside the workplace. Between 2011 and 2015, positive responses to the survey statement "managers avoid playing favorites here" increased 2.8 percentage points to an average of 83.3% of employees at leading small and mid-sized employers. During the same period, the amount of employees saying they enjoy a good work-life balance also increased 2.8 percentage points to 89.4%.
Moving forward, an organization’s reputation among its ranks will affect its bottom line even more than it does now. In 2014, CEOs surveyed by The Conference Board placed human capital shortages at the top of their list of priorities, and by 2020, the McKinsey Global Institute estimates the U.S. will have a shortage of 1.5 million college and master's program graduates. These statistics aside, we are already seeing a trend of candidates approaching the experiences offered by potential employers in the same way consumers approach a potential purchase – through reviews and researching online. And as these resources become more readily available, the decision to choose a workplace will increasingly be influenced by factors such as reputation, treatment of employees, and personal connection to a company’s mission/purpose.
Is your organization meeting (and exceeding) expectations?
At Great Place to Work, we use our Recognition Program to help businesses measure employee experiences across a range of critical areas and use results to help shape leaders' plans for building a high-trust culture. If an organization isn't quite "great" in the eyes of its staff, this type of analysis still provides important benchmarking for year-to-year improvement and comparison with the country's most beloved employers. Insights like this can also boost credibility among job applicants when organizations earn certifications related to employment practices, and provide opportunities to compete in employer rankings frequently cited in the media.
Even a focus on an informal program, which seeks regular feedback from employees on their experiences, can exponentially increase trust building within an organization. Not every organization has the resources for vacation destination retreats or huge holiday bonuses. But great perks and programs isn’t what great culture is about. Great culture is about trust, showing true care for employee well-being and experience, and following through on employee feedback. These aspects drive meaningful changes in communication practices, management interaction, professional development and camaraderie—all components that further employee engagement, retention and growth.
Take 2015's #1 Best Small Workplace: Radio Flyer. Annual turnover among U.S. employees in 2014 was just 5%, and employees near unanimously report a high degree of pride and camaraderie. "I truly come in each day excited to see what is in store and how we are going to improve ourselves now," one Radio Flyer employee told Great Place to Work. "No matter what is going on in your personal life, there is support and understanding everywhere you turn."