An interesting report published late last year by the MIT Sloan Management Review looked at business culture in the context of how employees rate the companies for which they (have) work(ed). This article explores the top 10 issues that matter most to employees, and the results might surprise you.
The ratings on Glassdoor (which generally are shown to be very balanced between positive and negative reviews) were used as the basis, with some 1.4 million reviews analysed – so a comprehensive analysis – and a SHAP value assigned to each topic to determine relative importance.
What was clear from this was that ‘soft’ issues are the most important ones, with the harder issues of pay/benefits and perks ranking relatively low on the scale.
So, what are the top-ranked elements of business culture (the SHAP value, indicating the relative importance against a typical issue being given with each)?
- Respect (17.9)
This is significantly the biggest predictor of a company’s culture rating overall – being a huge 17.9 times more important than the typical issue.
Employees need to feel respected, that the company does not view them simply as disposable cogs in the corporate wheel, or second-class citizens, but recognises and appreciates the roles that all play in business success, from bottom to top. It really comes down to accountability.
This need for respect runs across all sectors, from those with large numbers of relatively low-paid workers like retail and casual restaurants to those with higher percentages of professional and technical staff.
- Support (9.4)
This is closely allied to the first point – people are looking for supportive leadership; not just their immediate management, but leadership running all the way to the top of the company, as most recognise that the ‘C-suite’ sets to culture tone for the entire company.
What employees are looking for is leadership that supports them by helping them to do their best work, responding to input and requests, accommodating individual needs, offering encouragement, a feeling that the employees are valued and are able to do their jobs properly.
- Job Security (8.5)
Perhaps unsurprisingly, particularly given the past 2-3 years, job security came it at number 3, although only half as important as respect, and well behind supportive leadership – but the three factors are interconnected, with respect and support generally meaning more stable employers.
Companies with a record of high staff turnover do not score well when being considered by prospective employees.
- Leaders Walk the Talk (7.3)
Given the two most important considerations, it’s perhaps understandable that people would expect company leadership to ‘walk the talk’ – or to live the core values they espouse.
What was more surprising was that negative sentiment in this area does not do much damage to a company’s overall score, perhaps because employees are cynical of how leadership so often behaves. Conversely, though, where leaders are recognised for practising what they preach there is a strong boost to the culture score of the business – so doing so has a very positive effect overall.
- Benefits (6.1)
Coming in at the midpoint of the top 10 issues is the first hard one – benefits. Interestingly, benefits are more than twice as important as compensation when looking at the company’s culture score, although the nature of benefits varies with the employee’s job. Front-line employees see health insurance and benefits as more important, while office staff look to pension plans and related items.
This is not to say that compensation doesn’t matter, of course: research shows that it is as important as culture in retaining employees, particularly the younger ones, but compensation alone won’t fix, or make up for, a broken culture.
- Toxic Managers (5.1)
Although the SHAP scores for points 6 & 7 are the same, Toxic Managers is rated ahead as Leadership issues are overall more important than compensation and benefits ones in the minds of employees.
Under this heading came managers who were variously referred to as being abusive, unethical, disrespectful and / or non-inclusive. Words such as horrible and poisonous were also used, along with toxic. These managers really impact the culture score of the business.
- Perks (5.1)
Almost 450 different kinds of perks were mentioned in the reviews, but among those mentioned by more than 50 employees, coffee ranked top.
As with #4 (Leaders Walk the Talk), a low level, or absence, of perks does not adversely affect the culture score of a business, but companies where perks are mentioned more frequently and favourably do see a noticeable positive change in their culture score.
In such companies, company-organised social events such as team-building exercises, happy hours and picnics provide the strongest prediction of high culture scores – something to bear in mind – and have the advantage of being relatively low-cost, too.
- Learning and Development (4.2)
This was the third most frequently discussed topic (after management and compensation) among employees with nearly one-third mentioning it, and is of particular importance to white-collar workers. Programs that match or fund / reimburse university and college courses, and those that provide exposure to senior executives, especially for more junior staff, are especially favourably viewed.
Overall, of course, employees who are given the opportunity of enhancing their skills and have a clear potential progression path in the company are more likely to stay and talk positively about the culture.
- Unethical behaviour (2.6)
With nearly two thirds of companies listing ethics and / or integrity among their core values, little wonder that employees expect the leadership to exhibit this and that ethical behaviour is more than twice as predictive of company culture than the average topic.
Disturbingly, though, unethical behaviour remains a problem for many companies, especially where financial misconduct (including bribery and other inducements) is concerned. It’s vital for companies to identify and remove any staff, including leadership, involved in such behaviour as it tends to spread otherwise and can result in serious reputational and even legal damage to the company.
- Reorganisations (2.4)
Although this is often thought of in the same light as job instability and layoffs, employees were looking far more widely than this in the Glassdoor reviews, being more likely to mention such issues as organisational change (speed, frequency), strategy inconsistency and lack of clarity – all of which lead to reorganisation of structure, goals and so on.
There is a directly inverse correlation between the number of people mentioning reorganisations and the company’s culture score, particularly as 97% of the mentions were in negative terms.
What was interesting was that issues that you might expect to matter such as workloads, flexible schedules and friendly colleagues, were often discussed but had little of no impact on culture scores.
It’s clear from this research that companies that understand their culture and focus on the areas that matter to employees – Respect, Leadership (support, living core values, toxic managers and unethical behaviour), Compensation and Benefits (including benefits, perks, and learning & development) and Job Security & Reorganisations – are those that can expect greater productivity, growth and profitability with higher retention levels than the norm.
How does your business perform in these 10 areas?
I work with successful owner-led businesses to enhance their growth, profitability, cash flow and business value.
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