When you think about what you enjoy most about your workplace, what comes to mind? Is it the type of work you do, the colleagues, the office perks, the problem you are solving, or the money?
Be honest, if money is what drives you, that’s fine. Everybody likes having the ability to buy nice things. However, research by Leigh Branham, the author of Keeping the People Who Keep You in Business, says that 89% of managers think that their employees leave for higher salaries when 80–90% of employees actually leave for reasons other than money.
The cost-benefit analysis of strong culture
In fact, another study found that companies who had highly engaged staff through an excellent office culture, took fewer days for illness (2.69 as opposed to 6.19), and would recommend their company more to others (67% against 3% for disengaged employees).
But it’s not just sick days and referrals from happy employees that you need to be thinking about. Turnover is another major concern. Some studies (such as SHRM) predict that every time a business replaces a salaried employee, it costs 6 to 9 months’ salary, on average. For a manager making $40,000 a year, that’s $20,000 to$30,000 in recruiting and training expenses. Ouch!
So, why does all this matter? Besides, can’t you just increase salary until everyone is happy? Well, the short answer is: no. Even if you had an unlimited budget, your highest achieving and most highly motivated employees would still leave you.
According to a study by Fidelity Investments, when evaluating a job offer, 58% of Millennials and 53% of Gen-Xers cite improved quality of work life as more important than financial benefits.
In addition, a few years ago, a Princeton study suggested that $75,000 is the happiness tipping point — earning more than that, happiness may not really improve.
Improving your culture
So, what can you do instead to build a highly motivated workforce who loves their jobs and wants to stay with your company for the long-haul?
A recent 2012 report from Deloitte, “Culture in the Workplace”, reveals some encouraging findings about workplace culture:
- 94% of executives and 88% of employees believe a distinct workplace culture is important to business success.
- 83% of executives and 84% of employees rank having engaged and motivated employees as the top factor that substantially contributes to a company’s success.
- There is a correlation between employees who say their organization has a clearly articulated and lived culture and those that say they are “happy at work” and feel “valued by [their] company”.
If you’re looking for inexpensive ways to create stronger culture, here is a clever list of 10 Dead Simple Ways to Improve Your Company Culture.
Additionally, according to the Great Place to Work, a strong culture:
- Creates a sense of purpose and alignment across the organization
- Helps you attract and retain employees
- Strengthens the company’s brand
- Makes it more likely your employees will express pride and speak positively about your company
Your company’s culture is its identity. It is so much more than just words on a wall. It’s how the entire company feels, moves, and acts together. Recently, I wrote about How to Define and Build a Great Organizational Culture in 2018… it helps to put the idea of company culture in perspective.
Building strong teams doesn’t have to be expensive, but it does require purpose, vision, and strategy. The results will surprise you.