Why Is Organizational Culture Important?

The value of a winning company culture for your business’s success
September 12, 2019
Updated: November 18, 2019
Written by Kate Heinz

Building a strong company culture will help recruiters entice elite candidates and retain top talent. Not only that, but a winning corporate culture has been shown to improve levels of employee engagement, productivity and performance. 

Company culture has often been linked to attractive benefits like lax dress codes, flexible vacation policies and beer on tap, but in reality, these perks are merely byproducts of a company’s organizational culture. While the elements of a winning corporate culture will vary across companies, the fact remains: a strong company culture is invaluable. 

Because data drives ours digital world, we rounded up some of the most compelling statistics about the importance of organizational culture today. 

FREE E-BOOK: HOW TO CREATE CORE VALUES THAT WILL INSPIRE YOUR WORKFORCE. DOWNLOAD HERE.

 

Recap: What Is Company Culture?

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Before we dive in, let’s review what exactly company culture is. Company culture is defined as the values, ideals, attitudes and goals that characterize an organization. Your company’s culture is comprised of the important intangibles that dictate how your team operates and does business. In a lot of ways, your company culture becomes part of your organization’s identity, so it’s important to get it right. 

No two company cultures will be the same because every organization has unique goals and is made up of diverse individuals. A big part of creating a positive work culture is making sure every employee is represented and accounted for. Your company culture should unify your employees and propel them toward a shared goal. 

 

Company Culture Definition

Company culture consists of the values, ideals, attitudes and goals that characterize an organization.

 

Why It Matters: Company Culture Facts

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From establishing a brand identity to uniting coworkers and increasing employee engagement, a healthy company culture can have a huge positive impact on your organization. Let’s take a look at some of the ways a strong organizational culture elevates companies.

 

1. Company Culture Increases Employee Engagement

Companies with winning organizational cultures have 72% higher employee engagement ratings than organizations with weak cultures. Employee engagement is defined as the extent to which an employee is passionate about, motivated by and connected to their work and company. It’s no surprise that winning organizational cultures lead to high levels of workforce engagement. Bonus: engaged business units enjoy a 22% increase in profitability.

49% of employees say that company culture influences their employee experience more than their physical workspace or the technology they use. Strong corporate cultures give employees a cause to rally behind and purpose to do so passionately. That intrinsic motivation is what inspires employees to engage deeply with their work. A winning culture encourages employees to form a strong connection with their peers, organization and their role, enhancing their work experience and increasing their engagement.

 

2. Company Culture Can Decrease Turnover

38% of employees report wanting to leave their current jobs due to a negative company culture or feeling like they don’t fit in. Your goal should be to create a corporate culture that promotes diversity and inclusivity, but not every employee will click perfectly with your culture. (And we wouldn’t recommend looking for those candidates; today’s recruiters are more concerned with hiring for cultural adds). However, creating a winning organizational culture firmly aligned with your core values and mission will keep your employees engaged. 

65% of employees say that their company’s culture is a key factor when deciding to stay at their job. A weak or negative company culture will cause employees to look elsewhere for work, but a strong culture will keep them around. However, company culture is not something you can set and forget — 74% of U.S. employees say they would consider leaving their place of work if the company culture were to decline. Your corporate culture needs to be diligently maintained and improved upon when required.

 

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3. Company Culture Can Improve Recruitment Efforts

In the U.S., 35% of employees claim they would pass on their ideal job opportunity if the company culture didn’t appeal to them. Your company culture isn’t something you can hide from job seekers — they’ll be able to get a sense of your organization almost immediately and use it to inform their decision. To avoid losing the interest of top candidates, prioritize creating a company culture that conveys a strong and enticing brand image.

Companies that create a positive candidate experience enjoy a 70% increase in the quality of their hires.  A strong candidate experience starts with your company culture. Winning organizational cultures prioritize employees and their relationship to the company and its goals, which creates a positive employee experience. These individuals are likely to be engaged with and passionate about their work, two positive attributes that job seekers can pick up on. A strong corporate culture will entice equally motivated candidates that will add to your company’s culture and improve business.

 

4. Company Culture Can Increase Productivity

39% of employees say being happy in their role or at their place of work would motivate them to work harder. Your organizational culture has a lot to do with your employees’ satisfaction and engagement. If your company culture prioritizes teamwork, but an individual prefers to work independently, they’re probably not going to be content at your company. While you can’t please everyone, you can work to build a company culture that provides a balance of your employees’ individual needs that still aligns with your organization’s goals. Your employees will reward you for it with increased productivity and performance.

Satisfied employees are 12% more productive, while dissatisfied employees are 10% less productive. Your company culture will directly impact how you structure your workspace, treat your employees and organize your benefits packages. Create a winning organizational culture and enticing employee perks will follow. These perks have an effect on your employees’ happiness and thus the engagement and productivity of your staff. 

77% of U.S. employees believe a strong company culture enables them to produce their best work. Furthermore, 76% of workers see the impact that company culture has on their productivity and 74% report a winning organizational culture improves their ability to serve their customers. These numbers speak for themselves, but it bears repeating: a strong corporate culture increases employee productivity and performance. 

While any given company culture will evolve and shift as the organization grows, there are steps leadership teams can take to guide their corporate culture in the same direction as the company’s goals. Before you get started, make sure you have the bandwidth to see your plan through. Winning cultures are not created overnight, and a bad company culture can do more harm than good. An organizational culture that does not align with the company’s core values or fulfill the C-suite’s promises will appear disingenuous, deter top candidates and drive away employees. 

It’s a big task, but dedicating the time and resources to create a company culture that’s true to who your team is and where you’re headed will attract the best people for the job and propel your organization in the right direction. Want more? Check out these 42 statistics on company culture.

 

FREE E-BOOK: HOW TO CREATE CORE VALUES THAT WILL INSPIRE YOUR WORKFORCE. DOWNLOAD HERE.

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