In the ever-evolving landscape of today's workforce, the concept of employee retention has taken on new dimensions and complexities. This article delves into the nuanced interplay between Organisational Culture and employee retention. In an era where cultural diversity and individual choice play a pivotal role, understanding and shaping Organisational Culture has become a critical strategy for businesses aiming to retain their top talent.
This article offers insights and practical steps for HR professionals and business leaders to cultivate a workplace culture that balances business goals with employee satisfaction in a multicultural setting.
Why is employee retention such a challenging issue?
Employee retention is a complex challenge, deeply interwoven with your company's strategy, Organisational Culture, and the wider financial, geographical, and legal contexts in which you operate. You've likely encountered a range of effective advice on retaining employees. For instance, the Harvard Business Review advocates for investing in outstanding management, a tactic Netflix has advanced with its renowned Organisational Culture. Their “keeper test” encourages managers to consider whether they would actively fight to keep an employee who is considering a move to a similar role elsewhere. Those who don't meet this standard are offered a substantial severance package, enabling Netflix to perpetually refine their "dream team”.
This approach seems ideal, benefiting all involved. But what if you’re not Netflix?
This highlights the dilemma: while the advice given is often excellent, its applicability can be limited. Many companies lack the resources to emulate Netflix's approach, or to significantly invest in their management teams.
What can you do to enhance employee retention?
To enhance employee retention, it's important to recognise that it's influenced by various elements, such as your company's resources, employee preferences, and the employment landscape in your industry and region. Fundamentally, retention boils down to a simple concept: if employees prefer working for your organisation over your competitors, they're more likely to remain.
The first step is straightforward yet pivotal: understand why employees might opt for your company. This involves exploring their needs and aspirations. The exploration can be conducted through our Organisational Culture Scan. Gaining insight into what your employees desire lays the groundwork for developing effective retention strategies.
Industry-Specific Retention Challenges
Once you've identified what your employees want, the complexity of retention becomes evident. Employee desires can differ significantly, and sometimes what they want may be beyond your company's ability to provide. This could be due to financial constraints or regulatory requirements. For instance, in highly regulated sectors like Pharmaceuticals or Banking, providing extensive creative freedom to all employees can prove difficult.
Our Global Report 2023 illuminates these industry-specific retention challenges. It revealed that employee motivation to stay was particularly low in sectors such as Transportation and Logistics, Health Care, and Educational Services. These are industries where job roles are often quite specific and inflexible. The report also highlighted a significant gap between what employees and managers want in the Finance and Insurance sector, an area where altering company policies can be particularly challenging.
However, recognising these challenges presents a distinct advantage. In industries where overall employee motivation to stay is low, being aware of this can actually be beneficial for your company. Employees might opt to stay simply because they are familiar with the industry, and understand that alternatives may not fully satisfy their desires either. Additionally, if there is a trend of employees moving between companies, this likely affects your competitors as well, potentially making it easier to recruit new talent.
Accepting the realities of your operational environment is key. If retaining talent is inherently challenging in your industry, focus on managing a continuous inflow and outflow of employees, and adapt to this as a part of your business strategy. However, this doesn't mean there's nothing you can do about employee retention.
The Importance of Organisational Culture in Employee Retention
Maximising employee retention is a complex task, and understanding the role of Organisational Culture in it is crucial. The culture within your company significantly influences employee satisfaction and retention. When employees find their workplace culture aligns with their personal values and professional aspirations, they are more likely to remain with the company. Yes, people can - and often do - work in companies where the working practices are against their own values, but they don’t like it. The longer they continue in such settings, the more probable it becomes that they will seek opportunities elsewhere.
The key is to identify the type of culture your employees desire and compare it to the current culture within your organisation. However, it's vital to recognise that focusing solely on employee desires isn't usually feasible. After all, the overarching objective for any company is to achieve success. To enhance employee retention through cultural means, it's necessary to find a middle ground between fostering a culture that appeals to employees and one that secures the company's success. A successful business is fundamental to providing the stability and resources essential for maintaining a satisfied workforce.
Practical Steps for Shaping Organisational Culture to Increase Employee Retention
Understanding the importance of Organisational Culture in employee retention is just the beginning. The subsequent, more challenging step is to implement practical measures to effectively shape this culture. This requires a strategic approach that balances the needs of the business with the desires of your employees. It's about finding common ground where these two aspects can coexist, fostering a harmonious and productive work environment.
Consider, for example, the findings from our Global Report 2023 regarding two dimensions in our Organisational Culture model: Focus and Approachability.
In the Focus dimension, there was a general preference for a more professional culture, where employees align more with their profession than with their team or boss, as opposed to a Local culture where the reverse is true. Almost everyone, including employees and managers, favoured a more Professional culture, suggesting it as a potential starting point for cultural transformation. But this too is a double-edged sword. A more professional culture might inadvertently weaken the personal bonds employees have with their team or organisation, potentially making them more receptive to external opportunities. Herein lies the complexity: nurturing a Professional culture can align with what employees want, but it may also increase the likelihood of them leaving. To mitigate this, offering career development opportunities becomes crucial. It allows the culture to remain professional while providing employees compelling reasons to stay, aligning their professional growth with the company's success.
The Approachability dimension reveals a similar conundrum. There's a widespread preference for a more open and transparent culture among both employees and management. Yet, this often conflicts with external limitations like data security and legal regulations. These constraints might necessitate a more closed, controlled environment, hindering the desired open culture. The challenge, therefore, is to creatively navigate these constraints. It involves finding ways to cultivate openness and approachability within the confines of these necessary regulations, possibly through more transparent communication, inclusive decision-making processes, or establishing safe spaces for open dialogue.
These examples emphasise the complexity of cultural change. However, they are just starting points. A comprehensive Organisational Culture Scan, specific to your company, is crucial. Such a scan will uncover the unique cultural nuances of your organisation, highlighting areas in need of development. It's possible - even likely - that other dimensions of the Multi-Focus Model, not covered in global trends, may be more relevant for your company and would serve as a better starting point than Focus or Approachability. This tailored approach ensures that cultural changes are not only strategic but also deeply resonant with your employees' values and the company's goals.
Remember, evolving an Organisational Culture is a gradual, strategic process. It involves making well-considered adjustments, steadily moving towards a culture that satisfies both your employees' needs and your business's strategic imperatives.
In conclusion, the path to enhancing employee retention through Organisational Culture is both challenging and rewarding. It demands a profound understanding of your company's unique dynamics, a strategic approach to balancing business necessities with employee preferences, and a readiness to adapt and evolve. By staying receptive to the specific cultural needs of your organisation, you can cultivate a work environment that not only promotes professional growth and satisfaction but also aligns with your company's strategic ambitions.
