Why Company Culture Matters

What does the word “culture” mean in terms of the workplace? No, it’s not about having classical music concerts during lunch hour or priceless art on the walls. It’s about how an organization treats its employees, what it values, and how the employees feel about working there.

The Employers Resource Council defines workplace culture as “the character and personality of an organization that makes it unique and is the sum of its values, traditions, beliefs, interactions, behaviors and attitudes.”  Workplace culture can make or break an organization, and can undermine your best efforts no matter how business savvy the company is and what strategies for success it employs.

Diverse team stacking hands in a gesture of unity and teamwork.

Why is culture important? The ERC gives four reasons:

  1. Talent recruitment
  2. Employee engagement and retention
  3. Employee happiness and satisfaction
  4. Performance and company success

Trying to create or change an organization’s culture is not an easy task. According to employee engagement expert David Sturt, there are six aspects of a company’s culture that make it a great place to work:

  1. Purpose – connecting employees to the organization’s reason for existing
  2. Opportunity – the means for employees to learn new skills, develop and contribute
  3. Success – achieving goals, teamwork, innovation, and feeling the work has meaning
  4. Appreciation – recognizing and acknowledging employees’ work
  5. Well-being – looking for ways to improve employees’ physical, social, emotional and financial health
  6. Leadership – creating a sense of shared goals, purpose and empowerment

Sturt believes cultures with these characteristics keep employees engaged and productive. This is also shown when companies improve in any of the six areas through increased revenue growth and improved business outcomes. Even marginal improvements led to vastly increased changes, such as:

  • 53 percent more likely to have highly engaged employees
  • 27 percent more likely to have increased revenue
  • 29 percent more likely to have innovative and high-performing employees

There are many factors contributing to transforming workplace culture over the past 20 years, including a changing generational workforce, technology use, telecommuting, and the gig economy. Despite these changes, many companies were slow to recognize that a new culture was needed to recruit and retain employees.

The 2018 Global Talent Trends Study by Mercer collected information from executives, human resource professionals and employees in 44 countries and 21 industries. Across the board, permanent flexibility was key to creating a culture where employees can thrive. It is not just about flexible schedules; it also includes flexibility in how and when work is done. Developing permanent flexibility in an organization requires trust and the resources to execute flexible options.

Employees want to be valued and this includes their physical and mental well-being. Stress is the word most used by employees when describing the current culture of their organizations. Options for mental health days, stress relieving programs and wellness programs are ways to promote a healthier perspective.

Working for a paycheck is no longer the norm in today’s workplace. Another area of workplace culture cited as critically important is working with a purpose. Profits are certainly a viable goal for any company. Yet a sense of purpose increases employee motivation, productivity, morale and job satisfaction. In the Mercer survey, however, only 13 percent of employers offered an employee-value proposition (EVP).


How can an organization provide purpose for its employees? Start with:

  • Create a company vision
  • Show recognition for a job well-done
  • Express gratitude
  • Show employees how important their jobs are to the company and its clients
  • Talk about the meaning and value of the company and what it does
  • Share customer success stories with all levels of the company
  • Focus on the big picture

Before you think making a culture change is too difficult, consider these statistics:

  • 70 percent of employees would not work at a company if it has a bad workplace culture.
  • 65 percent said they would work for lower pay,
  • 26 percent would forego a title if it meant working in a positive workplace culture.

Creating a positive culture starts by listening to and investing in employees, maintaining values, making sure they are woven into every aspect of the organization, and creating a culture where employees can be themselves and feel they belong. Starting with these basics will ensure you are on the way to creating an authentic culture that reflects your company’s values.

Previous Post
Next Post
Leave a Reply

Your email address will not be published.

Subscribe to Our Newsletter

Join 80,000+ Fellow HR Professionals. Get expert recruiting and training tips straight
to your inbox, and become a better HR manager.

Select which topics to subscribe to: