The Impact of Workplace Culture on Employee Retention

The Society for Human Resource Management (SHRM) reported that on average, it costs a company six to nine months of an employee’s salary to replace them. For an employee making $60,000 per year, that comes out to $30,000 to $45,000 in recruiting and training costs. The cost of replacing an employee can be staggering.

The real question is, What factors do employees consider when deciding whether to stay or go? For some, it’s better pay. For others, it’s growth opportunities. But the real reason many employees decide to stay or leave is workplace culture.

Company culture embodies the mission, vision, values, goals, and expectations of an organization. In a nutshell, it is the personality of a company. This includes things like working conditions and hours, work-life balance, a team-orientated approach to decision-making, and what the physical space of a company is like, says Paul McDonald, Senior Executive Director of Robert Half in Menlo Park, CA. An appealing office environment, for example, suggests the company cares about its employees and wants them to be comfortable and well-equipped.

Here are some ways company leaders and HR professionals can create and foster a strong company culture:

Professional development: Make professional development and training opportunities available.

Create an inclusive work environment: A positive workplace is one where all the employees are valued, supported, and nurtured, irrespective of gender, sexual orientation, or color. All employees should have equal opportunities to progress and equal access to all the perks and rewards on offer. An inclusive workplace is one that values individual differences in the workforce and makes them feel welcome and accepted. Include signage that supports inclusivity and is clear and positive. Language can create confusion and miscommunication. Careful use of language that reinforces the gender-conscious and inclusive ethos, such as that emphasizing the function of space rather than the gender identity of users, is important.

Set clear goals and expectations: Employees need to have clear goals that they can work toward. Therefore, it is the responsibility of the employer to not only set goals but to also provide guidance and measurable performance indicators so that employees know where they stand in achieving their goals.

Be kind and respectful: It is so easy to treat employees as human beings, yet often employers forget the simple act of kindness. Employers need to remember that giving employees a friendly working environment and the tools to help employees effectively do their jobs is essential to boosting morale.

Rewards and recognition: If feasible, offer ample recognition, rewards, and career-growth opportunities.

Work-life balance: A healthy organization understands the significance of embracing a culture that balances work and life. This includes flexible work hours, work-life options, health and wellness programs, telecommuting, etc.

Retention is more of a strategy than an outcome. It takes careful attention and maintenance to engage and retain employees. However, it is important to be mindful that there is no one-size-fits-all. Employers must take every possible step to ensure that they create a positive culture that embraces its employees and gives them the tools and opportunities to be successful in their employment. If employees see or feel that they are a part of culture that aligns with their needs, they will stay.