The period described as the “Great Resignation” that began about a year ago is an ongoing economic trend. A recent CNBC headline stated that a startling 96% of workers will be looking for a new job this year in the hopes of attaining higher wages, the opportunity for advancement, better benefits, more flexibility, a healthier workplace environment, and a role that matters more to them.
This turnover is not only financially costly, it also takes a toll on workplace morale. The burden of enhanced recruiting efforts, onboarding, and training add up fast. According to Gallop, the cost of replacing an employee is from one-half to two times the employee’s salary. When a position is vacated, the required duties of that role don’t go away and must be fulfilled by those left behind – increasing the likelihood of burnout and more turnover.
While the reasons for an employee resignation vary greatly, and many variables are outside of a company’s control, organizational culture is a widespread reason for high turnover that is in a leadership team’s power to influence positively. An employer cannot control a scenario where an employee leaves voluntarily to relocate or reprioritize family care. However, when multiple people resign because they don’t feel valued by their boss, connected to the organization’s mission, or respected by their colleagues, this may be a sign that the workplace climate is eroding the ability to retain talent.
A healthy organizational culture is a competitive edge. Your business strategy sets objectives and benchmarks that other companies can easily imitate. However, your culture determines how people feel at work and will ultimately create (or destroy) the environment for success. Quality people want to be part of an engaged and winning team. Workplace environments that stimulate engagement generate higher productivity, and productivity propels performance. Raising pay, offering more flexibility, and adding more perks are short-term fixes to a more nuanced retention problem. A toxic culture will not retain even the highest-paid workers.
Here are three timeless principles for cultivating an organizational culture that creates a competitive edge:
1. A healthy organizational climate is co-created by an ecosystem of healthy relationships. When coaching leaders and teams, I stay curious about the climate in which they are operating because it’s co-created by everyone and co-owned regardless of rank. The strength of connections between coworkers is highly correlated with the health of the climate and one toxic leader, dysfunctional relationship, or actively disengaged employee weakens the entire ecosystem. Asking a leader or team member to draw the constellation of relationships within their organizational system and visually indicate where stronger and weaker connections exist quickly reveals the overall health of the climate and highlights the relationships that need attention. When these relationships are intentionally strengthened, trust is built, engagement improves, and common issues like ineffective communication and unproductive conflict get resolved and fade into the background.
2. Three essential nutrients are required to co-create a healthy ecosystem of relationships: safety, connection, and respect. Drawing from the field of neuroscience and Amanda Blake, author of Your Body is Your Brain; humans are hard-wired to scan their environments and relationships for safety, connection, and respect. Just like plants require water, sunlight, and soil to thrive, we need safety, connection, and respect to flourish. In a workplace, this means that we feel physically and psychologically safe, connected to the people we work with and our common mission, and valued for our unique contributions, backgrounds, and differences. We feel seen, heard, understood, and safe to be ourselves. When these qualities are scarce in our workplace ecosystem, we languish and struggle to reach our full potential. If your organization has established its core values, revisit them to determine where safety, connection, and respect live within those values and expand upon them if necessary. If your team still needs to establish its core values, this is an excellent place to start this vital exercise.
3. Leaders and managers bring the weather to the ecosystem. Leaders set the tone and managers are your cultural ambassadors. When coaching a leadership team, I often begin with these questions, “What are the weather patterns you’re experiencing in your organization? Sunny or cloudy? Turbulent or calm? High pressure or low pressure? And how might you be contributing to those weather patterns? “. How employees feel about the organization is strongly influenced by the “weather” leaders bring to the environment – individually and collectively. The role of today’s leaders is much more complex and challenging than just a few years ago. Mid-level managers are often most challenged because they are wedged between the competing wants and needs of their senior leaders and the wants and needs of their direct reports as they operate in an ever-evolving environment. As the conduits of safety, connection, and respect throughout the organization, mid-level managers’ responses to these dynamics strongly influence the organizational climate. Ensuring your managers are trained in how to skillfully respond to these pressures will reduce the likelihood of turnover due to company culture or an unskilled boss.
The generational shifts that are occurring in our labor force are amplifying the need to make organizational culture a higher priority. The employees that have recently entered our labor force and those that are soon to join them are less tolerant of a toxic boss, a disrespectful environment, a culture that doesn’t value growth and development, and an organization that doesn’t have a higher purpose. This shift will become more pronounced in future years. Organizations that don’t utilize these three principles will have a more challenging time retaining talent today and in the coming decades.
Emily Rogers, Founder & CEO of Emily Rogers Consulting + Coaching, is an executive coach, team coach, and leadership development facilitator. She strategically advises and supports leaders and teams in growing and realizing their full potential in purposeful and balanced ways. You can connect with her at http://emilyrogers.com