9 Indicators of a Healthy Company Culture
Company culture encompasses the collective values, beliefs and principles of the employees within an organization. There are many things that can affect company culture, for better or worse. Although companies strive for a healthy company culture, many organizations fall short, resulting in disgruntled employees, high turnover, and an overall poor reputation. Candidates, especially within the tech industry often have multiple options when deciding to enter the job market. When it comes to deciding between offers, a significant differentiator is company culture, often based on a company’s reputation. With a shift toward a candidate-driven market, employers are feeling the pressure to enact positive change within their organization if they want to continue being able to attract top talent.
The problem is, everyone talks about company culture as if it is something that simply evolves naturally within an organization. Without positive forces pushing a company toward a healthy company culture, the path of least resistance is often a toxic workplace. In thermodynamics, entropy tells us that systems tend to gradually decline into disorder. This principle can be applied to companies – unless forces are constantly pushing the company culture toward a positive structure, you can expect the culture to decay into disorder.
What defines a healthy company culture? Here are the nine indicators of a healthy company culture:
Acceptance and appreciation for diversity
A healthy company culture isn’t just about the numbers, it’s about appreciating fully appreciating and accepting those that might be different. Unhealthy company culture hires to fit quotas. This creates an environment where employees question a new hires ability, and new hires wonder if they were hired because of merit or to fill a diversity target. No one wants to be hired simply to pad statistics.
Many companies attempt to drive diversity through hiring, but fail to first develop an environment able to sustain diversity. If you have an engineering department that is all men, simply hiring a woman isn’t evidence of a healthy and diverse environment. Many woman report feeling alienated in environments like this, quickly leaving to environments that truly embrace diversity. Before you can hire diversity, you must first create an environment open and appreciative to diversity. The best way to do this is to start from the top. A diverse leadership team trickles down into diversity in the ranks.
Respect and fair treatment of every employee
A healthy company doesn’t treat some employees well and others poorly due to their position or any other factor. A strong company recognized that every person is valuable, from the person cleaning the bathrooms, to the intern filing paperwork, to the mid-level employee to the executive. It doesn’t cost anything to treat all employees fairly and respectfully, no matter their rank, tenure, or any other factor. Toxic workplaces might have managers speak about employees as being “just a contractor/intern/analyst” – which trickles down to the employees.
Healthy corporate culture does not rely on fear to motivate employees. By treating your employees with respect and trust, you will find they will do the same for the company. Relying on fear to motivate good behavior rarely works, and if it does, it is only a temporary fix.
What are some common ways to show employees respect? The most important way is to respect their time. Setting strict hours might be important for some roles, but for other positions, allowing your employees flexibility, especially if they are sometimes required to work after-hours, fosters a healthy and fair workplace. Is it really worth chastising an employee for coming in 10 minutes late when you required them to work 30 minutes late the evening before? Unfortunately, this happens far too often in toxic environments. Respecting employees time when they should be off the clock, whether after-hours, weekends or vacation time, is also critical to creating a healthy work environment.
Sense of pride and enthusiasm for the company and work done
No matter how hard you attempt to drive a healthy company culture, an important part of employee satisfaction comes down to their pride in the company and the work they are performing. Think it’s impossible to find a sense of pride in what your company does? Think again. Even the most traditionally negative industries can have a company filled with proud employees.
A great example of a healthy company culture built on employee pride and enthusiasm is a call center company in South Florida that sponsors a lot of fun and interesting events. You might think there’s nothing to be enthusiastic about in the call center industry, but employees for this company are some of the proudest and most excited about their company and jobs. While other call center companies are accustomed to extensive turnover and attribute it to the nature of the business, this call center company embraces what they do with pride and puts their name out there at many cool events, and in turn, uses some of the money they might spend recruiting by providing fun perks for their employees. No matter what your company does, by doing it well and being involved in the community, you can develop a sense of pride for your employees. Although no one may grow up dreaming about working at a call center, everyone dreams about working for a company that is respected and gives you great perks for working there.
Fair and equal opportunity for every employee to realize their full potential
Not being challenged is one of the biggest complaints we hear from job-seekers. Going to work every day to perform the same task every day is tedious and will result in employees looking for ways to grow. What makes it worse is when some employees seem to be favored by management – whether due to personal relationships or some other factor. Not giving all of your employees a fair chance to grow and develop skills is a sign of an unhealthy workplace.
A quick way to address concerns of a biased workforce are to give promotions based solely on merit or years invested, or by easily allowing employees to transfer within your company. Employees may feel stagnated if they are in a position where they simply don’t have a strong relationship with their manager – and they continue to see the colleagues that have after-hours beers with the manager climb up the ladder. Although building inner-office relationships is great, this shouldn’t be a factor in promotions or raises. Not every employee has the free time or energy to go to happy hour after work, and seeing colleagues that do get promotions fosters resentment and divide.
Although life, and by extension work life, is not fair, a healthy workplace allows everyone an equal and fair chance to move up within the company if they so desire.
Timely and honest communication with all employees regarding policies and company issues
Companies with good company cultures ensure employees feel like they are part of the bigger picture, not cogs on a wheel. Toxic company cultures breed evasiveness and/or dishonesty. By being open with your employees, even in times of struggle, you’ll find it will build up a positive and loyal workforce, rather than employees heading for the door. For larger environments, timely communication is key – there is nothing more unfair to dedicated employees than learning something about their own company from a news story.
A good company culture also makes sure every employee understands company policies, so that they are not surprised when they receive a warning or a letter in their file. There should not be any unwritten rules or policies that employees feel like they have to obey are indicative of a toxic environment. Policies and rules should be clearly documented and available to all employees.
Strong company leaders with a good sense of direction and purpose
In order for a company to foster a healthy work environment, they must first ensure a strong leadership team. Strong leaders don’t lead by negative emotions – like fear, worry or strife. Instead, they are a positive force of encouragement, leading their team toward a fully defined end goal. Strong leaders are like a shepard, leading sheep toward someplace better than where they currently are, and helping individual members of the flock when they get stuck in a hurdle. A good leader ensures no one gets left behind, and that there are always the needed resources available along the way. Poor leaders use their staff to drive fear into their teams, while good leaders use their staff to help team members out of tough situations.
Strong leaders also foster a strong sense of purpose in their teams, ensuring everyone feels valued. Perhaps this might mean looking for redundancies – two team members repeating each other’s work due to organizational issues might both lack a true sense of purpose. By finding and eliminating issues like this, you will create a healthier work environment and in turn, happier employees.
Competitive in industry innovation, customer service, and price
Everyone in a company suffers when the company is not competitive, whether through lack of innovation, limited/poor customer service or price point. A healthy company is always growing, and an indication of a healthy company is one that is staying up to date in the industry. Companies with strong and healthy company cultures set the pace in terms of innovation, customer service and price.
Lower than average turnover rates
A clear indicator of a strong company culture is low turnover rates. Some turnover is inevitable, employees leave for a variety of reasons. However, companies with a toxic culture have high rates of turnover for their industry. If you’re wondering how healthy your company culture, a quick test is to review your turnover rates compared to industry average.
Turnover is costly, which means that healthy companies save money throughout the year when they don’t have to replace lost talent.
Investment in learning, training, and employee knowledge
The final indication of a healthy company culture is an investment in their employees. Strong companies want to help their employees grow – whether through tuition reimbursement, paid trainings/certifications and other investments in learning. Having access to higher learning is a great perk for employees, as they never feel like they are stagnating in their role or knowledge. Although investing in your own employees may seem like a costly expense, the long-term gains of keeping your talent up to date, is invaluable.