Too many companies are deploying the wrong weapons in the battle to retain top talent. Here’s what actually matters.
By Graham H. Lowman, Ph.D., and Peter D. Harms, Ph.D.
Between a tight labor market and the increasing necessity to attract and retain top talent, companies can find themselves in the middle of an arms race to create the most unique organizational culture for their employees.
Major tech organizations set the bar high for amenities and luxuries in return for workers’ loyalty and productivity. Meanwhile, sites like Glassdoor and LinkedIn make it easier than ever for people to compare their current job conditions to prospective employers.
It’s no surprise, then, that many organizations have guzzled the Kool-Aid and now spend considerable time and resources crafting culture.
This arms race has led to impressive displays of creativity as corporate leaders and HR professionals try to “out-culture” the competition. The war can be seen in the seemingly endless variety of employee perks offered by some of the hottest companies around: Etsy designed part of its office space to resemble a treehouse; Spotify provides complementary egg freezing; and Netflix offers unlimited vacation days.
In presenting these perks, organizations aim to signal to employees that their cultures aren’t only unique, but that they’re superior at meeting workers’ needs and desires.
These efforts aren’t unwarranted. Considerable research has examined whether “person-organization fit,” the intuitive idea that an alignment of culture and worker needs is crucial for attracting and retaining talent, really works.
However, creating and maintaining an organizational culture that’s specifically tailored for employees’ idiosyncratic values and preferences can potentially be costly and resource-intensive. Whether it’s spending extra money to stylize a new office space or restructuring how duties are assigned for when employees capitalize on their unlimited vacation days, the costs can mount up quickly.
For those tasked with crafting these types of cultures to improve employee retention, it can be both an exhausting and seemingly endless grind. One employee may want to have pets at work, while another may be allergic. One worker wants to have an open workspace, and another wants peace and quiet.
Trying to appease everyone’s desires isn’t just difficult—it’s impossible. And doing so while trying to establish a unique and coherent organizational culture is a surefire recipe for mixed strategic signals and misspent resources.
What’s the solution? The answer is ridiculously conventional and radical at the same time. Stop worrying about employees’ unique values and preferences when it comes to organizational culture and stick to the basics.
Recent research on person-organization fit has found there’s little to no gain, in terms of worker retention, from aligning organizational culture with the idiosyncratic values and preferences of employees. Rather, organizations should instead seek to develop cultures that align with universal and commonly held values and preferences.
This shift in thinking and movement away from focusing on employees’ idiosyncratic preferences is supported by research showing that there’s actually considerable consensus among workers, across organizations and industries, when it comes to the most important aspects of organizational culture.
While employees might feel they have a number of unique values and preferences, the vast majority of these ideals are actually widely held by most people. Similarities between employees are all too often overlooked, and a relatively few number of employees’ unique values and preferences dominate our attention. Ironically, these universal values seem to drive worker satisfaction the most. There’s a reason why they’re universally held.
According to research across hundreds of workers and several organizations in a variety of industries, here are the most important elements of a desirable workplace culture:
Top 5 Components of the Perfect Organizational Culture
- Action-oriented. Employees describe their ideal organizational culture as reflecting a focus on results and getting things done. No one wants to work at a company that promotes lackadaisical behavior or a lazy attitude. People thrive in cultures where intentional activity moves people and the organization toward accomplishing goals and objectives. This proactive stance gives employees a sense of purpose in their work, and can help you retain them by creating a more gratifying work experience.
- High pay for good performance. Money matters. Although research suggests the benefits of cash as an incentive tapers off after a certain point, people want to feel like they’re being appropriately compensated for their hard work. A culture that recognizes and rewards good performance will go a long way in helping to retain top talent by ensuring they feel fairly treated and valued.
- Opportunities for professional growth. In the same way that people don’t want to work at an organization that promotes stagnant behavior toward work, the vast majority of people also don’t want to stay somewhere that fails to provide them opportunities to grow professionally. Employees want to feel like they’re advancing and moving up in their careers. Ensuring that your organizational culture promotes professional growth can help scratch that itch and help your employees feel like your organization doesn’t just value their productivity, but also their development and growth as people.
- Employment security and stability. We don’t enjoy having the rug pulled out from under us in our everyday lives, so why would we enjoy it in the context of work? Creating an organizational culture that helps employees feel secure and stable in their roles within the organization can help alleviate anxiety and concerns that not only help retain talent, but also cut down on issues that might detract from work performance. Obviously, firing and layoffs are sometimes necessary, but striving to be transparent and effectively communicate why these events occur can help employees rationalize the behavior and feel more comfortable and trusting of the organization.
- Collaboration. Humans are fundamentally social creatures. We enjoy companionship and feeling like we belong to a group and something greater than ourselves. Building an organizational culture that supports collaboration and encourages positive relationships with others within the organization can help employees feel supported and meet one of their basic needs of belongingness. A collaborative culture can also help benefit organizational goals, such as fostering creativity and innovation.
The five components are the battleships and Howitzers of the organizational culture arms race. To be effective at retaining top employees, you need to meet these universal employee needs and preferences.
Building your organizational culture around dog parks and treehouse-styled office spaces is the equivalent of worrying about the design of your uniform when you’re under heavy fire. It’s possible that they’ll have an effect, and we encourage organizations to explore new ways of making their organizational cultures unique, but if you have the resources to allocate for improving culture, stick to the five areas listed here.
You can have a state-of-the-art facility, offer free dry-cleaning and haircuts, and provide unlimited vacation days, but if you fail to reward good performance and foster a lackadaisical culture toward accomplishing goals, employees will still leave your organization. Your people might find the novelty of what you’re offering appealing at first, but they won’t stick around for long.
In contrast, if you concentrate on the basics, you won’t just improve employee retention—you’ll also reduce the need to spend excessive resources on creating a unique organizational culture. As an added benefit, designing your culture around universal values and preferences means it will be resistant to the ever-changing fads. This will save you from having to recreate or rebrand your culture whenever a new and exciting trend is introduced.
Gaining a competitive advantage in the culture wars and the broader war for talent isn’t impossible. The trick, as it so often is in business, is to “keep it simple, stupid.” Focus on the fundamentals and you’ll build the path for improving your organization’s culture—and keep your most valuable people walking on it.
10 Creative (and On-Brand) Work Perks
Sure, research proves employees don’t necessarily need cool benefits to stay loyal to their companies—but premium perks can certainly brighten employees’ days and make them more efficient and productive. Here are some of the most creative ways organizations attempt to carve out even the smallest culture advantage.
- The latest Apple product usually costs an arm and a leg, but the Cupertino company offers employees serious discounts on some of its must-have items. Log three years with the organization and you’ll shave $500 off any Macbook, for example.
- Facebook promises four months of full parental leave for moms and dads, and Zuck and Company will even cover adoption fees. Meanwhile, enjoy the arcade, barbershop, and valet parking at the Menlo Park HQ.
- At Airbnb, you’ll earn a $2,000 travel credit to visit rentals all over the world. The remote work options are generous, too, so you might want to stay awhile in that lavish lodge.
- If working at Casper wears you out, steal a half-hour of shuteye in an onsite nap pod, or just take one of the brand’s comfy mattresses home for free.
- People who swear by Patagonia—including its employees—live their lives outdoors. The Ventura, California-based clothing company occasionally shuts down shop so workers can surf on good wave days.
- The perks at biotech titan Genentech run the gamut: Need your ride or teeth cleaned in between meetings? Head to the onsite car wash or dentist.
- Twitter is a great place to air out your dirty laundry—literally. The social media site treats employees to free dry cleaning services.
- Musicians know a great melody can strike at any moment. Pick up a guitar and jam out in Dropbox’s rock room, which comes stocked with other instruments including a keyboard and drum kit. Just remember to bring earplugs.
- At the Boston-based Reebok, fitness buffs can break a sweat at the stacked company gym and take free CrossFit classes with fellow muscle heads.
- But why work out in the workplace when Ben & Jerry’s rewards its sweet-toothed employees with three free pints of ice cream a day? Eat enough of the frozen stuff and you might even get to name a new flavor.
Graham H. Lowman, Ph.D., is an assistant professor of management at Kennesaw State University. His research focuses on person-environment fit, staffing issues, and assessment.
Peter D. Harms, Ph.D., is an associate professor of management at the University of Alabama. His research focuses on the assessment and development of personality, leadership, and psychological well-being.