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Workforces with strong organisational cultures are generally more productive, more engaged, and more loyal. As hybrid work threatens to become a permanent phenomenon, it will pay to build a strong digital company culture.
Sixty-five per cent of employees believe their company culture has changed since the start of the COVID-19 pandemic. How can business leaders make sure the change is for the better?
What is company culture?
Arriving at a dictionary-worthy definition of company culture is a difficult task. When asked for his definition, Paul Edginton, chief executive at Structured Innovation, answered that, in essence, it’s “how we do things around here”.
“It’s not necessarily what the chairman or the CEO says it is, nor is it what you can read on a website or a brochure. It’s what people on the floor tell the new person when they pull them aside. It’s what they say when explaining how things work; that’s culture,” he said.
For a concept as difficult to define as company culture, individuals appear to prize it very highly. Indeed, 67 per cent of executives prioritise company culture over organisational strategy and operating models, said Forbes Advisor.
A survey found that employees feel or experience organisational culture most acutely through mission or values statements, recognition or celebrations, and the approach to employee performance, in that order. We might not know how to define it, but we know it when we see it.
Why should we care?
The importance of company culture has come into view in recent years as more and more data around engagement, wellbeing, and productivity continue to be released.
As noted by Mr Edginton, companies with strong organisational cultures can expect to cut costs through lower absenteeism, fewer unfair dismissal cases, and lower staff turnover.
“It is lower cost to retain and develop your existing staff than it is to constantly recruit and redevelop replaced roles,” said Mr Edginton.
Studies show that hiring an employee to be paid as little as US$8 per hour can end up costing a company, on average, around $3,500, and the costs only scale with seniority.
However, the financial benefits of boosting company culture go beyond cutting turnover costs and making fewer trips to the Fair Work Commission.
“If staff are constantly looking over their shoulder, that has a real cost to the business in terms of bottom line, but it also has a cost in terms of increased risk of mistakes. People who don’t care about their job or have given up and are just dialling it in may not only work slower, deliver lower quality and make far more errors in judgement,” explained Mr Edginton.
Investing in company culture “makes sense in dollars and cents in every way”, he added.
Building a hybrid company culture
Despite the growing awareness around the benefits of having a strong organisational culture and the growing collection of, and acting on, gathered data, the shift to more flexible working arrangements poses a challenge.
“I think the phrase ‘post-pandemic’ is an interesting one. It’s not post-pandemic, this is now the new normal,” Mr Edginton said. “Hybrid working is here to stay.”
Accordingly, those companies that can best adjust their approach to company culture to the new working landscape will disproportionately realise the many benefits. Putting culture first in the digital workplace, said Mr Edginton, is all about communication.
“It’s up to leaders of organisations, HR departments and advisers on people and people skills to think about how we reframe the combination of digital and in-office workers. Pulse-checking and work health and safety are still required,” he explained.
Social interactions have not gone away; they have changed form. Indeed, communication pathways are more diverse than ever, so getting cultural language right is only more important, said Mr Edginton.
“People are sending emails, they’re using Slack, Google, WhatsApp … HR leaders need to really think about how hybrid working affects power dynamics and the quality of our conversations,” he said.
Real, substantive change
As cultural issues continue to dot headlines, it’s crucial that business leaders avoid reaching for flashy, simplistic solutions. A new coffee machine or table tennis set-up might excite some, but in the absence of more substantive change, it could signal a disconnected leadership. Even more important, said Mr Edginton, is that leaders are acting on their espoused ethical commitments.
For example, said Mr Edginton: “If our company said during the referendum campaign that we support ‘yes’, the questions got to be asked since the referendum has finished: ‘What has the company done to reach out to Aboriginal communities, Aboriginal people, Aboriginal organisations, post-vote?”
Employees want to see that their organisation’s commitments are being realised through meaningful action. Throwaway social media posts or blanket commitments are increasingly being exposed for what they are.
“A coffee machine is just a thing,” said Mr Edington. “It’s how we behave that demonstrates culture.”
RELATED TERMS
Onboarding is the process of integrating new hires into the company, guiding them through the offer and acceptance stages, induction, and activities including payroll, tax and superannuation compliance, as well as other basic training. Companies with efficient onboarding processes benefit from new workers integrating seamlessly into the workforce and spending less time on administrative tasks.
The practice of actively seeking, locating, and employing people for a certain position or career in a corporation is known as recruitment.
Nick Wilson
Nick Wilson is a journalist with HR Leader. With a background in environmental law and communications consultancy, Nick has a passion for language and fact-driven storytelling.
