19 Business Insiders on Why Company Culture is Key to Managing Talent
Our research shows that in the world of higher ed fundraising, it can cost up to two times an employee’s annual salary to recruit, hire, and train their replacement. Add in the soft costs of reduced productivity and eroding team morale, and it’s clear, staff turnover can be a performance goal killer.
The bottom line is, the longer your high performers stick with your organization—mastering the processes and managing the relationships—the more productive they are, but retention is the straw that stirs the drink.
We know a well-designed talent management plan can keep gift officers satisfied and productive, but talent management doesn’t happen in a vacuum. It’s not unique to philanthropic organizations or the higher ed industry.
In fact, experts are calling today’s job economy a “candidate’s market” because the number of high-paying jobs available far outweigh the number candidates qualified to fill them. It’s a scenario that’s creating massive competition across all industries and massive headaches for the professionals tasked with finding the right employees and keeping them happy and productive.
In our first of two blog posts on this topic, we asked 19 experts across a spectrum of industries—from education and entrepreneurship to logistics, law, and leadership training—to talk about company culture and how it impacts an organization’s ability to recruit, retain, and manage top talent.
Here is what they said.
Question #1: Why is it important to focus on organizational culture?
Our experts’ answers to this question spanned from philosophical to practical to strategic. It goes to show how differently organizations define this basic concept. Higher education fundraising teams can surely empathize with the challenge of losing qualified candidates to competitors or watching top performers walk out the door. Regardless of industry, avoiding those pitfalls comes down to creating a great company culture.
1. Your organization’s culture is a living, breathing thing
- “Company culture is the ‘soul’ of the organization, and every organization has one whether they intentionally focus on it or not. The way talent interacts with one another, the way leaders lead, the way the real work gets done (or doesn’t get done) is all driven by the culture of an organization,” says Todd Davis, EVP and chief people officer at FranklinCovey and author of Get Better: 15 Proven Practices to Build Effective Relationships at Work.
- “Corporate culture is a reflection of an organization’s DNA, and the values and norms embedded in that culture permeate the institution. They drive not only the recruitment but the management and retention of human talent. In effect, it is a brand marker and can be a differentiator in attracting and managing talent,” says Pamela Harper, attorney at Griesing Law, and chair of the firm’s practice groups on corporate transactions and compliance and government and regulatory affairs.
- “Think of it this way—without a company culture, you’re nothing more than a collection of workers making progress on assorted, independent tasks. There is no greater purpose or overarching theme to bring things together and perpetuate a sense of unity. Under these circumstances, there’s no ‘right’ kind of candidate for your company because your company has no identity. You’ll end up with cogs and pieces that don’t fit together and that may not work well together,” says Nate Masterson, HR manager at New Jersey-based beauty products manufacturer, Maple Holistics.
2. Your organization’s culture is strategically important
- “Employees who truly enjoy their jobs and want to be at work are more productive, innovative and passionate. A fun, positive company culture can help create that sense of commitment and can be a tool to show how much you care about your employees,” says Adrian Ridner, CEO & co-founder of education tech startup, Study.com.
- “It’s crucial to focus on company culture when recruiting, as it increases the likelihood that new hires will develop into long-term, low-churn, high-producing members of your team. While it is important to hire candidates with the experience and technical expertise required for the role, cultural fit is the glue that holds the company together,” says Crystal McFerran, vice president of marketing at Dallas-based Velo IT Group.
- “The culture or environment is a key piece to how an individual needs to operate in order to be successful. Some cultures are collegial while others are cutthroat. Put a good person in a bad environment and the environment always wins. Making sure you are bringing people in who are the right fit is imperative to successful talent management,” says Dr. Marc Ian Prine, industrial and organizational psychologist at MIP Consulting.
3. Your organization’s culture can be a competitive advantage
- “The science is in. Conventional wisdom and Industrial Age thinking about people as cogs in the wheel—replaceable cogs—is fading in favor of scientifically demonstrated truths about the cost of turnover, the effect of psychological safety on performance metrics, and what makes teams effective,” says Aaron Schmookler, co-founder of leadership training platform, The Yes Works.
- “Openly sharing your values up front is critical for candidate engagement, which increases the likelihood that they’ll accept the job. At the same time, it gives them the opportunity to self-select out of the job if it turns out the values they’re hearing from you don’t align with their own. … if it’s not a fit values-wise, it’ll save you the hassle of the turnover down the road,” says Carisa Miklusak, CEO of automated recruitment platform, tilr.
- “Employers compete for talent so it’s important for us to keep a pulse on our company culture. It keeps us competitive and desirable to recent college grads and millennials who represent a majority of the workforce today,” says Alison Choiniere, COO at Florida-based logistics company, Freight Center.
Question #2: How does organizational culture help recruit, retain & manage talent?
The relationship between culture and talent management in today’s job market is one in which candidates hold all the cards. Whether you work for a higher ed institution, a multinational organization, or a scrappy startup, many of the candidates you’re interviewing care more about culture than compensation … and they’ve done their research on you.
1. Your commitment to employees determines their commitment to your business
- “When employees feel they are growing as individuals, are well cared for and tied to the organization’s culture, they are proven to be engaged, offer higher levels of discretionary energy, and feel more inspired than the average employee. This is a winning formula for retention,” Carisa Miklusak says.
- “Culture determines whether an organization supports mentorship, implements the corporate equivalent of the Rooney Rule or embraces compliance accountability enterprise-wide—all of which shape human talent. [A toxic culture] dilutes brand equity and equally important, diminishes employee engagement,” Pamela Harper says.
- “Company culture is essential to determining whether a (potential) employee feels at home and safe. When recruiting, companies must consider that potential employees look not only for a job that will fulfill them and their financial needs, but also an environment where they feel comfortable. If an individual feels out of place, they spend wasted energy on thinking about why they do not fit in, or worse changing their natural behavior to be accepted,” says Kieran Canisius, CEO & founder of Amsterdam-based Zocket.
2. Your culture needs to inspire the employees you hope to hire
- “It used to be said that employees don’t quit companies, they quit supervisors. That is still true except that bad supervisors set the tone for the culture. If bad supervision or poor performing employees are tolerated, it sends a bad message to current and future workers. Average workers who fit the culture tend to exceed expectations while superstars who don’t fit tend to fall like shooting stars,” says Ira S. Wolfe, TEDx speaker, author, and president of Success Performance Solutions.
- “Ping pong tables, free lunch, and massages help make some companies a great place to work, but these things did not make a company great in the first place. Strong culture is created when each member of the team believes in the same things. When that is the case, trust emerges, and when you have trust you have loyalty. With these elements embedded in a team, no matter how big or small, there is no limit to what can be accomplished,” says Gene Caballero, co-founder of landscaping group, Green Pal.
- “Millennials now make up more than one-third of the workforce and they’re team players who really want to feel connected to their job. They’re looking for more than a 9-to-5 job and a paycheck. The latest generations of workers want to join companies with strong company cultures where they can build strong connections, make an impact and learn,” Adrian Ridner says.
3. Jobseekers will research and scrutinize your culture
- “People look for jobs the same way consumers go about making buying decisions. Job seekers research what it’s like to work for you. They dig deep to learn about your culture. And especially in tight job markets, top candidates pick the best companies to work for—not the other way around,” says Dan Tyre, sales director at HubSpot and co-author of Inbound Organization: How to Build and Strengthen Your Company’s Future Using Inbound Principles.
- “The first thing job seekers do is research the company. … the candidate may come from Indeed or Glassdoor and the first thing they see is the review rating. Both the design and content of the career page and the review ratings create an image of what it’s like to work for XYZ company. Add to that mix social media, and company culture isn’t a message the company controls but what is being said by employees, former employees, and candidates,” Ira Wolfe says.
- “A company’s culture is like its personality. When a company has a healthy and exciting culture, people hear about it and they want to work there. This means that a company, with an already great reputation, is attracting talented and skilled workers, making it an even better company,” says Crystal Huang, CEO of ProSky, a California-based platform for recruiting and training employees.
4. When push comes to shove, your culture is what keeps employees from leaving
- “A company’s culture is the primary reason a talented person chooses to join an organization, as well as the reason they stay, or they leave. No talented person wants to spend their days where they are not challenged, valued, fully utilized, and passionate about the work they are doing,” Todd Davis says.
- “If candidates can complete the job but do not fit well with the company culture, there is a higher likelihood of turnover. The best way to reduce a high employee turnover rate starts during the recruiting process. During the screening process, look for a candidate that will fit in well with the culture of the company,” Crystal Huang says.
- “With a company culture, however, you’ll begin to identify what makes your company and workforce click—and it will be a lot easier to identify the kind of talent and candidates that will enhance your workforce as opposed to disrupting it,” Nate Masterson says.
The bottom line
A positive organizational culture is no longer a “nice-to-have,” it’s expected. Jobseekers today are savvy and selective and, despite the importance of finding the right people, the state of the market suggests most organizations need to choose a candidate quickly or risk losing them to a competitor.
The good news is that building an organizational culture that makes candidates clamor for your open positions is well within your reach. Regardless of which position you’re looking to fill, our experts agreed that building a culture based on trust, authenticity, and empowerment is critical to recruiting and retaining the right candidates as well as boosting your bottom line.
For more research and insights into talent management within higher education, check out Reeher’s 2018 annual report, Fundraising at the Speed of Life.