A Gartner survey in 2021 revealed that 91% of HR leaders are concerned about employee turnover in the immediate future. According to this survey, nearly 50% of employees hired over the last 12 months had two additional job offers. Another Gartner survey of 1,609 candidates between May and June 2021 found that nearly half of today’s applicants are considering at least two job offers simultaneously. Many organisations across the world are facing a new challenge in a post-pandemic phase as the job market rebounds riding a wave of global economic recovery.
That brings us to the question. What is organizational culture. Even before we get to that, first let’s define culture.A well-defined organizational culture can help retain talent and ensure you are on course to meet your goals. Deloitte’s Talent 2020 study that surveyed the talent paradox from the employee perspective revealed that employees believe that employee retention is not simply an HR function; it should be driven by business leaders. According to this study, more than six in 10 employees (62 percent) who plan to stay with their current organization reported high levels of trust in their corporate leadership, while only 27 percent of employees who plan to leave express that same trust. In addition, 26 percent of those who plan to leave their jobs in the next year cited lack of trust in leadership as a key factor.
Culture – defined
At Hofstede Insights, we have worked closely with companies to build a sustainable and effective organizational culture. Professor Geert Hofstede defines culture as the “the programming of the human mind by which one group of people distinguishes itself from another group”. It is always a shared, collective phenomenon, that is learned from your environment.
The layers of culture
Culture consists of various layers. We often compare it with an onion.
- In the outer layer of the onion, are the symbols.
- The next layer consists of heroes.
- In the third layer, closest to the core, you’ll find rituals.
- At the core of culture, is what we refer to as values.
Symbols include things such as food, logos, colours or monuments. Heroes can range from real life public figures, like statesmen, athletes or company founders, to fictional figures, such as Batman, in popular culture. Rituals can include activities done in your spare time, such as cricket or karaoke, or work-related rituals, such as meetings. Values are broad preferences for a certain state of affairs (e.g. preferring equality over hierarchy). Values are transmitted by the environment we grow up in, for example, interactions that we have with our parents or teachers showing us what is acceptable and what isn’t.
As culture is a group phenomenon, we use it to analyse the behaviour of groups and make an assessment of the likelihood of groups of people acting in a certain way. That is to say, one person does not represent a whole culture and the culture does not represent the person. However, a group of people from one culture are more likely to act in a way that is appropriate for that culture. Subsequently, people from the same culture tend to act in a similar way, especially when they are together. From a business point of view, this makes culture an additional tool of management, with regards to groups of people.
What is organizational culture
Organizational culture is the way in which people in an organisation relate to each other, their work and the outside world, in comparison with other organisations. Your Organizational Culture shows how your organisation works: how things get done, the interactions between people, and employee relationships to their work and the outside world. The best organizations often place equal emphasis on strategy and culture. Such organizations create a culture that motivates their teams.
Eight Benefits of a well-defined Organizational Culture
Recruitment: companies with a well-defined culture often attract the best talent. Your HR team will agree that a strong organizational culture is one of the best ways to attract potential employees. Most potential employees will be keen to work for a company with a strong culture.
Retention: employee retention has become particularly significant in a booming post-pandemic market where employees have multiple job offers. High turnover is a typical symptom of an ineffective organizational culture. Cultivating a workplace that encourages employee participation is extremely vital.
Perfect fit: the first port of call for most job seekers is organizations that align with their values. For some it might be a company that allows flexibility, for others it could be a company that encourages a spirit of entrepreneurship. A clearly defined culture allows the right talent to find you and make a significant contribution to your organizational goals.
Customer satisfaction: when your employees are satisfied, it encourages them to put their best foot forward and create the right buzz and energy. The result – exceptional products and higher standards of customer service that reflect their motivation. This has a direct impact on customer satisfaction.
Innovation: is derived from the Latin verb ‘innovare’, that translates to ‘renew’. Innovation in the modern context is the creation of new ideas, processes, or products. An organization where employees are highly motivated is likely to provide the perfect environment and platform for innovation.
Collaboration: a positive and effective organizational culture fosters a spirit of partnership and builds teamwork. It also enables much better communication and social interaction.
High employee morale: employee surveys of companies with a well-defined organizational culture almost always reveal a happy and motivated workforce.
Work-life balance: stress is one of the major factors that upsets work-life balance. A strong and positive organizational culture significantly reduces workplace stress and impacts employee productivity and well-being.
At Hofstede Insights, we offer you a structured approach to measure, understand and shape your organizational culture. Our approach is based on data.