Sustainable growth and success depend largely on how effectively your organization is able to retain top talent. While competitive compensation and well-rounded benefits matter, the biggest determining factor of employee loyalty is actually company culture. When the workplace environment leaves employees feeling disconnected or unsupported, loyalty drops and turnover rises. In many cases, persistent retention issues are not isolated instances but indicators of a deeper culture misalignment.
Leaders have the power, however, to directly influence culture, creating a positive and healthy workplace environment that their organization can use as a retention strategy to keep talent for the long term.
While employees can leave a company for many reasons, many cases of high turnover result from cultural issues. Employees don’t leave companies. In reality, they leave cultures that don’t work for them. MIT Sloan Management Review’s 2021 study of the Great Resignation found that a toxic culture is the strongest predictor of turnover. Poor workplace culture is 10.4 times more likely to lead to turnover than compensation.
Culture is a key retention strategy that gets employees to want to stay. A positive company culture can make employees feel valued, satisfied with their work and part of something meaningful, all of which increase loyalty.
Several cultural components impact retention rates for better or worse. Leaders can shape these elements to create a work environment that people want to participate in.
The top cultural factors that drive retention are:
When employees can relate or subscribe to the company’s cultural values and mission, they’ll feel a stronger connection to the organization. Employees are increasingly seeking work opportunities that are purposeful, which attracts them to workplaces where the values and mission are lived out. A sense of belonging is powerful for loyalty, leading to higher retention rates.
Employees must see a path forward to understand how their career can progress with your company. Growth opportunities like advancement opportunities, skill development and continuous learning can keep employees from feeling stagnant and stuck in their work. Growth is engaging and empowering, allowing employees to feel more fulfilled in their roles.
Employees want to work with flexible leaders who can adapt to high-stress change situations and create less pressure for the team. These leaders inspire confidence in their teams, so employees will feel stable long-term.
Employees who feel that their leaders appreciate their work will see their contributions as valuable and will be more likely to stay with your organization. Regular, genuine appreciation from leadership reinforces positive behaviors and makes employees feel like valuable team members. Recognition processes and programs that bestow this sense of value are integral to building a positive company culture.
Companies should demonstrate consistent integrity, trust and transparency about decisions and values. Employees who believe leadership is honest and forthright about policies, processes and projects and demonstrates integrity by following through on promises will feel more connected to the company and less likely to leave. Openness with company initiatives helps employees understand what’s at stake and feel invested in outcomes. Transparency also reduces uncertainty and anxiety about the company’s future, making employees feel more confident about their place in the organization.
Leaders can build a culture that employees want to be a part of, encouraging them to stay with the organization for the foreseeable future. The following are some actionable strategies leaders can take to create this low-turnover culture:
Leaders should check in with their employees regularly to build trust and connection. During one-on-one or teamwide meetings, leaders have the opportunity to build and reinforce a positive culture by being transparent about the company’s goals, wins and challenges. These check-ins will make employees feel like part of the bigger picture and confident about the company’s future.
Leaders can pave the way for employees to learn relevant job and industry skills. Growth opportunities demonstrate an investment in employees and can encourage them to stay. These opportunities can include:
Your company’s leaders can implement a recognition program that identifies and celebrates employee contributions on a regular basis. This program can include praise from leaders to team members and feedback from one employee to another.
Leadership development turns leaders into cultural ambassadors who reinforce desired behavior and values throughout the organization. Empower them with the knowledge and skills they need to underscore the company’s cultural values with every action they take.
High retention is not something that happens by chance but an outcome that is built on a foundation of culture. Culture is primarily driven by leadership, so building a strong culture starts with building strong leaders. With the right skills, leaders can cultivate a workplace culture that attracts top talent and encourages them to stay for the long term.
The leadership courses from The Center for Leadership Studies (CLS) teach your organization’s leaders the skills they need to create a solid retention strategy. Some of these courses include:
Learn more about these courses and contact CLS for more information about company culture and retention.
