Workplace culture is defined by employee engagement: Why investing in employee happiness pays back

If employee engagement is understood as the emotional commitment employees have to their employer, why should organisations invest in feelings? 

Surely something as intangible as emotional commitment is less important than a more practical business strategy?

As it turns out, nothing could be further from the truth. This article explains why.

What is a positive workplace culture?

A company’s culture was described as "the way we do things around here" by management guru Marvin Bower.

Another C-suite guru, Peter Drucker, said, "Culture eats strategy for breakfast.” In other words, a positive workplace culture trumps all manner of business strategies, operational efficiencies and management nous. 

And the opposite is true: a toxic culture in a work environment can kill an organisation faster than a speeding bullet. 

It may be hard to measure, but everyone knows a positive work culture when they see it. Organisations supporting a strong workplace culture feel friendly, optimistic, collaborative and fair. 

They are places where employees are valued, with a healthy work-life balance, a smart leadership team and a clear set of core values. 

It may not all be written down, prescribed and defined, but these positive feeling workplaces exude the right cultural fit for their employees.

Why invest in a positive culture for staff?

A work environment with a positive workplace culture is worth investing in because it brings a wide range of benefits such as:

• Attracting top talent

• Driving employee engagement and retention

• Spreading happiness and satisfaction

• Lifting performance.

Further, 92% of the leadership from companies with a successful track record believe that financial results and workplace culture are interrelated. The tangible ratio is a 20-30% fiscal improvement for those with a positive culture.

The benefits of investing in employees

Let’s consider the benefits in turn.

Attract great employees

The COVID-19 pandemic and subsequent changes to how, where and when work is undertaken has sent a shock wave through employers globally. The Great Resignation, as it’s dubbed, suggests that 41% of employees are considering resigning. 

Organisations that have a strong culture are more likely to attract the right talent. Having a positive culture aligns your corporate values and mission with equality, inclusiveness and transparency. 

Prospective talent will do their research to see if the employee experience and workplace cultures are what is claimed by an organisation’s leadership.

Improve company culture

Investing in employees helps to improve workplace cultures. But the word ‘investing’ needs to be understood in a wider performance management context.

A Deloitte study found that 94% of executives and 88% of employees believe a distinct corporate culture is important to a business’s success. 

The study also found that 76% of these employees believed that a ‘clearly defined business strategy’ helped create a positive culture (read more about how to link HR practices to business strategy in our whitepaper).

However, when asked what factors had the most impact on a positive workplace culture, execs ranked tangible elements as the highest: financial performance (65%) and competitive compensation (62%). 

In contrast, these were ranked lowest by employees, who instead valued intangible elements like communication (50%), recognition (49%) and access to management (47%).

This shows that a positive workplace culture is not simply a top-down edict from management, but instead is the shared values, belief systems, attitudes and assumptions of everyone in the organisation.

Improve employee retention

If attracting talent is a challenge, retaining them is as well, and staff are much more likely to stay in an organisation that is creating a positive workplace culture.  

Companies that have a positive workplace are more likely to retain their Generation Z employees, a crucial cohort for any company’s success. 

Reducing staff turnover saves on all the costs and time of hiring and training new employees. 

Plus, it gives satisfied employees who share the values of the positive workplace an opportunity to thrive and rise within the organisation.

Humanforce has outlined strategies and solutions for the issue of employee retention in a recent eBook.

Increase in employee engagement

An organisation’s success in engaging employees will encourage staff to embrace the company’s values. When they identify with the mission and vision of the organisation, their positive feeling will have a significant impact on the current culture.

The drivers for lifting employee engagement are purpose, connection and recognition:

• 45% of Gen Z want meaningful work and purpose beyond the salary

• 30% of Gen Z would take a 10% to 20% pay cut to work for a cause they care about.

This brings the central question back to creating a positive workplace that will attract, engage and retain talented staff.

Higher productivity in the work environment

It is indisputable that happy and engaged employees are more productive. Employees with more positive experiences at workplaces with stronger cultures are more likely to put in extra effort because they’re emotionally committed.

An Oxford University study found that happy workers are 13% more productive than unhappy workers. 

According to the Harvard Business Review, engaged employees are 125% more productive than merely satisfied staff. 

Average companies lose 20% of productive capacity due to ‘organisational drag’, but leaders who really understand performance management and business strategy seek to simplify their structures and procedures to get the best out of their engaged workforces.

Better reputation

Reputation is something that’s hard to gain and easy to lose. In the cauldron of social media, how many negative posts and viral shares does it take to tar an organisation with bad news? 

Think of how far a brand like Facebook has fallen from its glory days. A toxic culture is a recipe for disengaged staff, low productivity, poor staff retention and a tarnished reputation.

Research by the CBI suggests that treating staff well is the most effective way to improve business reputation, according to 69% of those surveyed.

In a tight labour market, it makes sense to invest in your employees’ happiness. 

We’ve seen that millennials care less about salary and more about work-life balance, so organisations can improve staff engagement with generous leave, health care, child care, flexible working arrangements and professional development opportunities.

Having a brand identity that makes you an employer of choice has a significant benefit on the quality of job candidates you attract and retain.

Conclusion

Investing in your staff is a choice. If you can encourage employees to embrace your organisation’s core values, creating a positive cultural fit, research and the experience of many organisations show you will enjoy a range of benefits.

Get in touch

If you want to speak to us about how Humanforce software can improve your organisation’s workplace culture and support your employees’ engagement, get in touch. 

To find out more, schedule a demo or contact us here.

Humanforce solutions

Humanforce is a leading provider of shift-based workforce management solutions that simplify onboarding, scheduling, time and attendance, employee engagement and communication.

Customers in more than 23 countries use Humanforce to build resilience, optimise costs, realise compliance confidence, retain staff, empower their team and drive growth. 

Humanforce was founded in Sydney in 2002, and today has offices across Australia, New Zealand, Singapore, and the UK.