This article is the second of a six-part series on employee engagement and retention, which we refer to as “stickiness.” Younger generations make up an increasingly large share of the modern workforce, and companies must respond in order to acquire and retain top talent. This article will focus on how people and culture work together to build an appealing workplace.
Companies are not just competing against one another on product and service offerings in this employee-friendly market. They are competing to retain their talent and prevent them from finding a new job at a competitor. Some may say that as long as you pay well and have good benefits, your people will stay. However, we believe there are many more contributing factors to retaining top talent.
A changing world means that new factors have come into play in the race for top talent. To stay competitive in the employee market (and ultimately the market as a whole), companies must shift their focus as well. Outside of target audiences and product features, there are a wide range of focus areas companies can emphasize to build a competitive edge. In this article, we will explore the value of culture and personal development when it comes to attracting and retaining employees.
Culture: What Makes Your Company Attractive?
With the highly competitive job market, it makes sense that candidates are simply holding out for better compensation when interviewing with companies. However, nearly one in four candidates rank culture as the most important factor when choosing a new job, even above compensation. Culture is an often-discussed term when it comes to company development, but what does that really mean?
Culture is the environment of a company developed and influenced by how the company’s values are lived out by employees on a daily basis. For instance, a company with a culture of accountability develops formal and informal processes to ensure employees are graded on merit and receive honest, transparent feedback. With more and more candidates looking to a company’s culture before making their next job decision, it makes sense that more than half of business leaders rate culture, engagement, and employee retention as an “urgent issue.”
So how should companies go about building a great culture? First, companies must define their values and then institute policies and processes that reflect these values. Once values are established, leaders and other influencers in the company must demonstrate these values day in and day out so other employees have a model to follow. Formal policies are great, but must be supported by informal, everyday activities. Lastly, growing the culture requires paying attention to the hiring practices of the organization.
How a company sources potential employees, interviews candidates, and defines job qualifications goes a long way in building upon (or tearing down) a company’s desired culture. For example, the sourcing process often involves dozens of people in an organization from first contact to successful hire. Each of these employees needs to understand the ideal candidate when evaluating talent and making connections with those types of individuals. 82% of employers rate employee referrals as the best ROI generation for hiring, likely because these candidates tend to fit the company culture they are joining. Employees who refer friends and family for a position are aware of the company culture and the desire to foster and grow it further.
However, hiring is just a piece of the overall company culture. While it’s important to hire individuals who fit your culture, you must cultivate that culture as you grow as a company to ensure those foundational values do not get lost with a growing headcount.
People: Being Known Leads to Retention
To cultivate your culture, you need to develop your people. The relationship between employee and employer is becoming more development-oriented and less focused on purely making ends meet. Employees have begun to look for companies who not only provide a paycheck and the dreams of climbing the corporate ladder, but also cater to their personal goals and aspirations.
As people, we want to be known, and workplaces are now places where employees are encouraged to be themselves and bring aspects of their lives into the office. One of the driving forces behind this shift is the increased presence of millennials in the workforce. The millennial generation is looking at their place of work as an extension of their personal lives; it makes sense when millennials expect to spend more time working than any previous modern generation (52% of millennials will respond to their emails outside of work, higher than any generation). In fact, 71% of millennials want their co-workers to be a second family.
The drive to feel a part of something, to get more from work than just a paycheck and benefits, is changing the way relationships are built at a company. According to Gallup’s millennial survey, 62% of millennials who feel comfortable discussing non-work-related issues with their manager plan to be with their current organization one year from now. Gone are the days when the workplace was entirely distinct from home life.
As the lines blur between work and non-work interactions, companies need to consider the best ways to professionally develop their people, and walking that line can be tough. To combat the blurred line, companies must intentionally take steps to update age-old habits of structured feedback and mentorships.
Millennials desire feedback more than other generations, and generation Z is right on their heels, looking for instantaneous results and feedback. Companies must develop their mentorship and feedback processes to adapt to the quickly changing workforce. Consider placing additional emphasis on teachable moments, informal apprenticeships, and project-based feedback to get out of the restrictive cadence of annual reviews. Companies that update their processes to connect with the younger generations will gain a competitive edge when it comes to top talent.
Bringing It All Together
People and culture are tightly bound in the modern workplace. Employees, particularly millennials, emphasize workplace culture when selecting a job or deciding to stay with their current company. But culture does not emerge in a vacuum. It depends on values, but more importantly it depends on people who can live out those values and grow relationships with other people who will do the same. When evaluating how to develop people and culture, consider the following questions:
How can you provide more consistent feedback outside of formal reviews?
How do you train and evaluate your mentors?
How are you developing processes and policies that reinforce your values?
How do you create an environment that encourages authenticity?
How does your hiring process help develop a winning culture?
We live in an employee’s market. And not just any employee—millennials and generation Z have more workplace influence than ever before. It’s time to develop a culture where they want to thrive.
Interested in learning more about how to implement a productive culture? Curious how Credera creates and maintains culture? Reach out to us here to find out more. Or find the rest of the series here:
Part 1: Introduction and Trends
Part 3: Vision and Mission
Part 4: Compensation and Benefits
Part 5: Purpose
Part 6: Professional Development