Recruiting the top professionals in your field is almost always excessively difficult; while you may have 100 applicants for a single position, you only want one of them — and four other companies are wooing the exact same candidate.
Every business owner and hiring manager know that there’s a constant war for the best talent, trying to find ways to edge out their competitors to get the best people. They try to offer higher salaries, offer more benefits, and offer more important-sounding job titles. All businesses do this, so to win the fight for the best candidate, you need to have an unfair competitive advantage. That advantage is your company culture.
A strong, robust company culture is essential for your business to thrive. It will give you the competitive advantage you need to attract and retain top talent, which affects every other aspect of your business.
Why Company Culture Matters More Than You Think
Big-name brands like Zappos, Netflix, and Warby Parker have all invested heavily into their company culture. This strategy has paid off; each is known as a company that employees would jump at the chance to work for.
One recent survey even proved that company culture holds a significant amount of weight. When interviewing more than 1,400 CEOs and CFOs, they found that over 50% of those interviewed said that company culture directly impacts creativity, profitability, productivity, and firm value and growth. A strong company culture, after all, is directly tied to employee engagement and employee satisfaction.
Company culture becomes ingrained into the fabric of what makes your business unique, and it matters more than you might think. Some businesses, for example, don’t try to cultivate a company culture with likeminded employees; they look purely for cognitive fit, which is made up of past experience and skills. While these are still important indicators, someone with core professional values and attributes like “curiosity” and “thinking outside the box” are likely to consistently benefit your business more than an employee incapable of doing so, even if they’ve got less work experience then the candidate next to them.
This is why Zappos requires all candidates go through a cultural fit interview, which makes up 50% of the total decision of whether or not the candidate is hired (and they’ll let you access their culture book for free). It’s why Netflix seeks to give employees freedom and responsibility and why company culture expert Patty McCord stresses that high expectations can lead to “high performance cultures” where “you can rely on everybody to understand the rhythms of how they work…and make sure everything gets covered.” And it’s why you should be paying attention to your company’s culture, too.
The Effects of a Strong Company Culture
A strong company culture is intricately linked to employee satisfaction and engagement. As the culture improves, so does engagement, which then helps the company culture advance further. It’s an upwards spiral that will significantly impact your business.
There are several economic and intangible benefits of being a culture-first company. These include:
· You’ll get (and keep) the best people. All businesses want to attract top talent, and they want to keep them once they’ve got them. As companies like Netflix and Zappos have proven, a strong company culture will help you get stronger hires and improve your employee retention rates.
· Your teams will naturally work better together. If your company culture is well-developed, your teams and employees will naturally work better together. This doesn’t mean that everyone will be a carbon copy of the person in the office next to them, it just means they’ll share common cultural attributes that can increase cooperation and cohesiveness.
· Employees will enjoy their work more. When employees enjoy their work more, they’ll consistently perform better, leading to a higher quality of work and increased productivity. This means happier customers, happier managers, and bigger margins of profit.
· You’ll have a substantial economic gain. High employee retention rates drive down hiring costs and training costs and keeps everyone focused on the company vision and delivering high performing work. The cost of a bad hire, after all, is significant. Zappos founder Tony Hsieh estimates that bad hires have cost his company over $100 million dollars. And since 80% of an organization’s turnover is caused by bad hires, by improving your company culture, you’ll be able to avoid taking on bad hires and losing your good ones all at once.
Company culture will directly impact your business’s growth, employee retention rates, and profit lines. By strengthening and utilizing it to your benefit, your company culture becomes your “unfair” advantage that will help you run circles around your competition, outperforming them every step of the way.
Ready to strengthen your unfair competitive advantage? See how Fortay can help you build and scale your company culture here.
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