As organizations scramble to find employees amid the Great Resignation, there’s a shift in the power dynamic from employer to employee.
Prospective employees have rethought their careers during the COVID-19 pandemic, creating a complex reset of personal values, goals, and personal vision.
Corporate culture appears to be becoming more important than office perks. Workers value work-life balance, authentic community engagement, respect, and communication.
Forget the table tennis, on-site dry cleaning, happy hours, and a beer fridge in the break room.
It’s time for employers to get real.1
Authentic, sincere corporate culture is the new workplace glue — the environment and atmosphere that attract and keep today’s workers. And that’s especially true for younger workers. They want more. They want respect, flexibility, and clear communication. Today’s workers tell researchers coming to work doesn’t have to be fun, but it does have to be meaningful and fulfilling.2
The COVID-19 pandemic appears to have given the national workforce pause, a time to reconsider what’s important, what’s worth doing, and if work should mean more than a paycheck. Employees are looking for work-life balance, corporate culture, workplace diversity and inclusiveness. In a time of “The Great Resignation” think of this as “The Great Reshuffle.” The power dynamic between employers and employees has shifted. One guess where that power is flowing. To successfully hire — and retain — workers, companies may need to take a hard look at their corporate culture and what matters to workers, beyond the foosball table.3
These changes appear to be here to stay. The pandemic led workers around the world to rethink what they want out of work. Work-from-home arrangements are a thing now, and the digital transformation is only accelerating. Employers who recognize and adapt to these shifts may be better positioned to attract and keep talent.4
It Starts With a Hard Look
Organizations struggling to fill jobs in an era of low unemployment and “The Great Resignation” can start by literally looking around and understanding where the old way of doing things might not meet the expectations of what workers want.5
For one, that “open office plan” that was always a bad idea, is now dead. A natural spreader of coughs and colds in the old days is a bad idea in a world of COVID and its variants. And honestly, nobody liked those open offices anyway, they were really a way for bosses to show they don’t trust their employees, and workers complained about the noise with the lack of “sound privacy.” And research finds open offices don’t even do what they were supposed to do, which was foster collaboration.6,7
And besides, workers like working from home. In one survey, nearly 70% of workers said they would choose a work-from-home arrangement if possible, and 85% said they would prefer to apply for jobs that offer at least some flexibility.8
If workers want to work from home anyway and didn’t like the office, is stocking the office with LaCroix going to change that? If more than 40% of Americans say they’re thinking about leaving their jobs and 47 million quit in 2021, many citing a “toxic” workplace environment, maybe the problem isn’t workplace amenities, it’s workplace culture.9,10
What Is Corporate Culture?
Understanding that corporate culture goes beyond a mission statement and desired outcome is a first step. Corporate culture defines an environment — a feeling an employee gets when walking in the door each day. It’s more than compensation and perks. Who hasn’t had a wellpaying job they didn’t like? It’s about how an organization treats its team members, how coworkers engage with each other. It’s about ethics, vision, community engagement. And it’s not something that develops by accident. Good corporate culture takes strategy, tactics, and effort.11
That responsibility for business culture starts at the top, but it runs all the way through the organization. More than half of Americans who quit say it’s because of a toxic manager. And a quarter of managers say they never got proper leadership training.16
Don’t think it matters? It does. During the COVID-triggered “Great Resignation,” research shows a “toxic” corporate culture — failure to promote diversity, equity, and inclusion; workers feeling disrespected; and the toleration or encouragement of unethical behavior — is the strongest indicator of an organization’s attrition rate, 10 times more powerful than others.12
And if a toxic culture is driving employees out the door, that’s real money. It can cost up to 33% of an employee’s salary, on average, including the time and costs associated with recruiting and hiring, when they quit. And when employers have to find a replacement, there are more costs. A recruiter helping to find a skilled employee can cost up to a quarter of the starting salary. Even the DIY mode for lower-skilled positions — with job boards, internal staff, background checks and training — can cost about $4,000.13,14,15
In a 2019 study, the Society for Human Resource Managers estimated toxic workplace cultures had cost U.S. companies $223 billion over the previous five years. This isn’t a small problem.
More than 60% of American organizations said it’s harder to hold on to employees than to hire them.16,17
It Can’t Be Faked
Current employees already know an organization’s culture. If they’re quitting, something’s probably wrong. But when it comes to hiring, prospective employees are getting a sense of a company’s culture before they answer the help wanted ad. A job posting can be the first big clue and can tell a prospect plenty about the culture. Mentions of “hustling to meet frequent deadlines” could mean poor organization that requires the employee to be on call 24/7. Talk of “fun environment” and workplace happy hours instead of flexible work arrangements and respect may signal a tone-deaf company that feels it can buy employees off with trendy perks instead of researching what they really want (it’s also potentially culturally insensitive to assume everyone drinks or has time to socialize after work at the expense of family time).18
Other clues include gender bias language, favoring traditionally male-leaning code words such as “dominant,” “competitive,” or “aggressive.” And of course, no organization operates in a vacuum, and review aggregators such as Glassdoor and Google reviews are a window into an organization’s soul. Even a company’s own social media posts could harbor a trove of cultural information.18
Nearly half of job seekers say corporate culture is important, and 86% of job seekers say they avoid organizations with a bad reputation, including not only social media or word of mouth, but published reports of bad or unethical behavior.17
Business Culture: Beyond Those Four Walls
An organization’s culture doesn’t exist solely inside the organization. Civic and community engagement can reflect a company’s culture as well. Employees say they want to work for companies that look beyond its walls. One corporate group, The Civic Alliance, enlists more than 1,200 companies — including big players such as Amazon, Capital One, and McDonald’s — in an organization dedicated to supporting American democracy and civic engagement. Other organizations may dedicate themselves to local charities, donate services or products, allow employees to use work time to volunteer, or encourage employees to create their own community engagement strategies and organization with paid time off for volunteering that goes beyond a one-off event and demonstrates true commitment.19,20,21
Consumers care about corporate community engagement, but employees do as well. Today’s emerging crop of employees want more than pay. They value purpose and societal impact.
Allowing paid time off for employee involvement in a community charity or event may help attract top talent.21,22,23
And getting employees involved in the community can help the company in return as workers build skills, develop increased workplace loyalty and pride, strengthen engagement to the job, strengthen relationships with colleagues, and even deepen corporate connections to the community that could help recruit new employees. Team members may become even more engaged when employers let workers decide together what causes to support, empowering them to make a difference where it matters most to them.24,25
A New Way, Corporate Culture, and Employee Engagement
The workplace is evolving. Whether that’s the result of COVID-19 or technology or other factors, workers value new things — respect over a paycheck, work-life balance, workplace culture. It’s a shakeup, and companies that understand what workers want and adapt stand to recruit top talent and retain valued employees.3,4
It’s probably no coincidence that LinkedIn Learning’s most popular courses deal with organizational culture with titles such as Unconscious Bias; Strategic Thinking; Communicating with Confidence; Speaking Confidently and Effectively; Confronting Bias: Thriving Across Our Differences; and Diversity, Inclusion, and Belonging.4
No one can say exactly what the future of work is, but the workplace of the past is changing. The most recent version of the workplace was a World War II era creation, built on rank and structure. And it worked for a long time. But technology and COVID blew that up. Workers got a taste of work-life balance, of skipping the commute, of building productive, collaborative relationships by video meetings, and of respect, involvement, and engagement. Workers value their lives and mental health and understand work is a thing we do, not a place we go to. Values have changed. How corporate culture adapts may determine the next winners and losers.26,27
Things to Consider:
If a positive corporate culture isn’t intentionally developed, a toxic culture may unintentionally fill the void.
Employees say toxic corporate culture is the primary reason for quitting a job.12
Everything a company does can signal its corporate culture, from the language of job postings to after-hours email expectations.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, investment, legal, medical or financial advice or guidance. Please consult your personal independent professionals for answers to your specific questions.
