Culture Over Salary: Why You Need Culture Management

Companies are losing great talent for a reason unexpected to many: poor company culture. Paying employees a higher salary won’t fix that problem.

That’s because 56 percent of workers agreed that strong workplace culture is more important than salary, according to a 2019 study. This shows paying a competitive salary simply isn’t enough in today’s job market. Companies need to make sure their organizational culture creates a healthy, positive, and supportive work environment that enables employees to perform their best.

Why is company culture more important than compensation?

A study by MIT Sloan Management Review shows that toxic corporate culture is the top predictor of employee turnover. In fact, it’s 10 times more important than compensation. Salary didn’t even make the top five predictors.

Offering higher pay won’t hide poor company culture. When team managers and other leaders don’t offer regular feedback, constantly criticize their people, and/or play the blame game, it creates a toxic work environment. Paying your employees more won’t get them to ignore the problem. Leaving the issue unaddressed will eventually drive your people to find a company that doesn’t tolerate this behavior. This then becomes an employee retention problem. Now more resources are spent on replacing employees – to the tune of 33% of each person’s salary.   

Put simply, you can’t pay your way out of a toxic culture. It needs to be addressed through organizational change.

Why employees value culture over compensation

Most recently, the pandemic has changed the way people view their relationship with work, which is driving a large number of people to quit their jobs. In fact, more than 38 million U.S. workers quit their jobs in 2021 — a record-breaking number based on U.S. Department of Labor data. This trend has been coined The Great Resignation

Why are people quitting in such large numbers? For many people, it’s because the pandemic made them realize they are looking for something beyond salary: a work culture that works for them. 

Take the story of former software developer, Jonathan Caballero. He spoke to NPR about how he quit his job to find a company with a culture that embraces values important to him. 

When his company wanted him to come back to the office, he wasn’t interested in doing the 45-minute commute again. He wanted to be in a job that creates room for remote work and workplace flexibility. So he resigned and his search for a new job began. 

“I think the pandemic has changed my mindset in a way, like I really value my time now.”

Jonathan Caballero

Some elements of culture that matter the most to employees:

  • Respect: Employees want to be treated with consideration, integrity, and empathy
  • Support: Employees want their needs to be taken into consideration by company leaders
  • Leading by example: Employees want to see the actions of leaders reflect the company’s values

Salary is still important

Money is still important for current and prospective employees. Think of Maslow’s hierarchy of needs. Salary allows your employees to afford basic needs such as food, water, clothing, and shelter. If those needs aren’t met, it makes it difficult for employees to focus on performing well at work. 

What we’re seeing now, though, is a massive shift. More than ever before, workers are evaluating company culture when choosing where they want to work. Organizations need to acknowledge this and adapt swiftly by creating a culture that is attractive to both current and future employees.


The benefit of investing in company culture

  1. Higher retention

As seen through Jonathan’s story, your employees want a company culture that aligns with what they value. When there is misalignment between the two, your employees might try to find what they value elsewhere.

Also, employees who have positive views on their company’s culture are more likely to remain loyal to you. This reduces turnover, which means less budget is spent on hiring replacements and training them.

  1. Stronger brand reputation

Your teams are some of the most important ambassadors of your company’s brand. So, you want your ambassadors to say great things about your company.

Creating a positive and aligned culture doesn’t just ensure you’ll reach your goals, it also gives your employees something to talk about. If your employees consistently share your message across social channels, you’ll get 561% more reach compared to your branded channels. 

  1. Increased business performance

A culture that creates a positive work environment empowers employees to perform their best. VMWare, a financial institution based in Jamaica, is an example of that, as they have been recognized as a Great Place to Work in 2021 as a result of their culture efforts. This has led them on the path to achieving their business goals, landing them the designation of “Best Financial Advisory Team” from Capital Finance International.   

It’s simple: if your people are empowered to take ownership of their roles and duties, productivity goes up, and it becomes easier to reach your goals.

  1. Alignment across the organization

If you clearly define your organization’s culture, your employees will be on the same page with the results that need to be delivered. An aligned culture with a shared set of beliefs enables your employees to confidently know what the desired culture looks like.

If your company values accountability and can make that clear across the organization, managers will know that they should instill that within their teams. When people are accountable for organizational goals within their roles, they can easily connect what they do on a daily basis to the outcomes.

Prioritizing company culture

It all starts with clearly defining your culture. If your teams don’t know what your culture needs to be, how can they embody the values that come with it? Leading by example is required from leaders to achieve this. Leaders must model the behavior they wish to see in their teams, but that’s not all. They must also avoid putting band-aids over cultural issues and addressing them head-on. 

Clarify, own, sustain: achieving your results requires you to be transparent about the goals of the organization, instill ownership of the goals at every level, and create a culture of sustainable change. Reach out to us

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