By Charlie Coode, Founder of Culture15
According to Glassdoor, 77% of potential recruits consider company culture before accepting a new role. In fact, many candidates now feel culture is more important than salary, placing a significant onus on the employer to get it right.
Nevertheless, from a business perspective, company culture is about so much more than making staff feel good. It’s about learning to match up culture with company aims to foster growth – with greater loyalty, engagement and productivity developing as an aside.
At present, most leaders rely on outdated methods like gut feelings or sporadic employee feedback heard along the grapevine to understand and improve their culture. This approach is akin to trying to sail a ship blindly through a storm, with no compass in sight. Whilst you might occasionally guess correctly, you’ll most often find yourself adrift in a sea of failed initiatives – fuelled by a few loud voices that steered you in a direction that wasn’t right.
This is where data-driven insights come in, providing a compass for future direction, while providing a more detailed understanding of your starting point.
Getting culture right: the case of Patagonia
Outdoor clothing company, Patagonia, is an excellent example of what can be achieved when data is used to align company culture with strategic goals for constructive direction. Measuring current cultural behaviours, leaders identified low participation rates in the company’s ethos. They therefore took decisive action to allow employees to request flexible working hours to volunteer with environmental missions, seeing a marked increase in productivity and engagement as a result. By aligning Patagonia’s own sustainability values with employee wellbeing in a tangible way, the company developed into a much stronger brand, supported by a team that remains actively involved.
Essential metrics for your company culture
When measured and managed correctly, culture can drive both employee satisfaction and business success. It’s simply a matter of looking beyond generic engagement scores to look at quantifiable insights that can be translated into decisive action. Indeed, by focussing on the five key metrics below, it’s perfectly possible to benchmark improvement, whilst bridging the gap between where you want to be culturally and where you currently are.
1. Employee turnover
High turnover rates can be indicative of poor management, a lack of growth opportunities and an overall poor company culture. By tracking turnover rates by department, tenure and reason for leaving, perhaps comparing these rates to industry standards to identify problem areas, employers can take decisive action towards rectifying causes for concern, leading to retention improvement.
For instance, if a tech startup were to notice that its turnover rate for engineers was significantly higher than the industry norm, it could dive into exit interview data and cross-reference this with workload metrics to identify the cause of the issue: unrealistic project timelines. Employers can then introduce appropriate measures to prevent talent burnout, adjusting workloads and deadlines to produce a marked decrease in employee turnover.
2. Internal promotion rates
Similarly, a high rate of internal promotions tends to suggest that a company is investing well in its employees, providing clear career paths. This is critical to maintaining a motivated and loyal workforce – and being aware of what works well allows related initiatives to continue over time.
Perhaps, for instance, heavy focus on internal mobility has led to high rates of promotion, in turn contributing to the company’s reputation as a top employer capable of retaining top talent. This is something the company will wish to continue and promote, as such making the tracking of the number of promotions within a specific timeframe central to its continued growth.
3. Employer net promoter score (eNPS)
Employer net promoter score (or eNPS) essentially measures the likelihood that employees will recommend their workplace to others, providing a clear indicator of overall employee loyalty and satisfaction. By tracking responses to eNPS surveys over time, employers can objectively assess shifts in sentiment far more easily than they could if relying on feelings-based, verbatim feedback alone. If eNPS scores are seen to be declining, further investigation can then be carried out to find out why employees are feeling undervalued, with solutions like peer-recognition platforms being implemented to quickly improve both morale and scores.
4. Time to productivity
This metric measures how quickly new employees reach full productivity, with shorter time-to-productivity scores indicating effective onboarding and longer scores indicating potential problems. Shorter scores may likewise be interpreted as a sign of a strong, supportive workplace environment.
By tracking the time it takes for new hires to meet performance benchmarks, combined with the results of onboarding surveys to gather feedback on the process, employers can objectively assess how well their teams are performing. If time to productivity turns out to be longer than expected, they might then wish to revamp their onboarding process to include more hands-on mentorship and training, tracking any increases or decreases that may emerge as a result. By effectively assessing which methods are working, time to productivity can be significantly reduced, leading to faster contributions from new employees, who will be much happier as a result.
5. Absenteeism rates
Whilst there are many valid reasons for absences, high overall absenteeism can be a sign of low employee engagement and workplace dissatisfaction. Monitoring the frequency of absences and any patterns across the organisation thus becomes an opportunity to address any underlying issues when findings are correlated with other metrics like employee surveys and exit interviews.
Say, for example, an international manufacturing company discovered high absenteeism at a particular plant. A deeper dive into the problem, using AI trend analysis of things like employee reports, might reveal that poor air quality and outdated equipment were causing health issues. If the company responded by addressing these problems, it would benefit from a healthier, more present workforce in a much more productive environment.
Benchmarking for continuous improvement
Benchmarking these and other metrics against both industry standards and internal targets is critical for continuous improvement. It’s a process that involves clear goals, performance reviews and data-driven adjustments – ultimately allowing leaders to develop a more accurate and actionable understanding of their cultural performance and overall success.
