What is the ROI of Your Company Culture and How Do Leaders Influence it?

You don’t need to be Google or the next hot tech startup to have a great company culture.

Any small business, no matter if it is a size of 3 or 100+, whether a  tech startup, media publisher, real estate team or retailer, can create a great company culture.

For a moment, think about your company as of yourself.

How to change Company Culture

When you are healthy, you feel generally very good. No back pain, injured leg, low energy, cold or fever. A healthy company culture is exactly like that, just on a bigger scale.

A healthy company culture has a positive impact on your team productivity, workplace happiness, innovation and business development.

Companies that engage their employees outperform those who don’t by up to 202%.


Today, business owners realize more and more the importance of building an authentic company culture.

Just imagine an environment where your employees feel inspired by your mission, vision, and values. An environment where people wake up every day to enjoy their work because they know that no matter if they have a good or bad day they can rely on your company culture ecosystem and your sincere support.

As a result, your company can benefit from greater customer’s satisfaction, more referrals, cost savings, fewer errors, process improvement, higher productivity and low employee retention.

Would you really say no to that?


How to measure your company’s ROI?

If you use common sense, you can say that one way to get to know the ROI (return on investment) of your company culture if to simply calculate how much you invested, how much you got in return and then display the difference as a percentage. For example, if you invest $1000 and generate $1500 in return, your ROI will be 50%.

The challenge is that company culture is not a quantitative measure. It is a qualitative measure.

A great company culture can’t be bought. Great company culture can be only built over time.


Here are three ways to actually measure the impact of your company culture.


The importance of hiring the right talent.

A great company culture starts with the proper hiring process because every business is simply just a group of people.

If you do find the right talent, you will generate more return on your investment because you will spend less time, energy and money dealing with employee retention.

How to build a great team

Remember the cost of losing an employee can be as high as 2-4 times their salary.

Your budget can suffer not just from expenses related to hiring and re-training the new talent, but also from loss of productivity around the resignation.


How to calculate employee retention rate?

Employee retention is a calculation that refers to the ability of your company to retains employees.

Here is how to make the calculation:

Take the # of employees who remained employed for entire measurement period / # of employees at the start of measurement period x 100.

For example, my measurement period is 2016.

8 employees remained for the entire period. 10 employees started.

This is 8 / 10 x 100 = 80%.

High retention means that your company is doing extremely well. Low retention signals that you might have a problem – a high employee turnaround.

Obviously, the higher your retention rate the better.


Measuring Your Culture Engagement

First, give yourself some time to take an honest assessment.

You must be willing to acknowledge your weaknesses to strengthen your company.

In order to that, you can re-think your approach to employee training, career growth opportunities,  employee benefits or the environment your folks are working at every day.  Your engagement strategy should balance two things.

Generally, your engagement strategy should balance two things.

Monetary compensation and non-monetary experience.

Monetary rewards alone will most likely prove to be a waste of money. Here are few examples of monetary compensations: annual bonus, company ownership, performance incentives, commission structure, vacation pay, etc.

Non-monetary experience – skill building training, birthday parties, Friday pub patio’s, tools gifts, snacks, company team building activities, sports and entertainment tickets etc..


Encourage Employee Advocacy

There is a neat saying that truly resonated with me.

“If you want to go fast go alone if you want to go far go together.”

From a purely business perspective, if you care about your employees, chances are that your employees will care about your customers.

An extra care given to your customers can favor your business reputation, produce another customer referral and ultimately impact your revenue.


So, how can you motivate your employees to become advocates?

Simply, give them an opportunity to lead.

A leadership opportunity often gives people a sense of ownership, which makes them be more involved and caring. Today, most people have a desire to learn continuously. If you support your employee’s personal growth and realize that good ideas can come from anywhere, your business will do better.

Today, most people have a desire to learn continuously. If you support your employee’s personal growth and realize that good ideas can come from anywhere, your business will do better.

Take a look at Shopify. Canadian e-commerce company, who’s core value is to be a highly desirable place to work.


How to find you what your employees want?

A simple way to make this discovery is to simply survey your team. Another option is to do it anonymously, which adds the odds of granting trust and transparency.

Another option is to meet them on regular basis to talk about their professional needs. And when the time is right to talk about the future of your company culture, involve everybody.

Overall, the best way to get to know what your employees think and how they feel is by listening.

Watch this Ted Talk by Julian Treasure to get inspired with pretty straightforward tactics you can start using tomorrow.


How can you increase ROI of your company culture?

Here are 10 actionable tips!

  1. Decide to invest time and energy to your employees.
  2. Clearly articulate your company mission, vision, and values.
  3. Focus on quality and candid communication.
  4. Come with both monetary & non-monetary incentives. Develop an effective hiring process.
  5. Empower your employees to take leadership roles.
  6. Encourage new ideas with no judgment.
  7. Providing a clean workspace.
  8. Listen to your employees.
  9. Ask your employees questions & provide them feedback.
  10. Supports your employee’s individual goals.

I am always happy to hear some fresh insights based on your personal experience.

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