Company culture has become a top human resources (HR) priority in recent years, and it’s easy to see why. Organizations evolved at breakneck speed during the COVID-19 pandemic, with leaders, managers, and employees alike struggling to keep up. Now, in light of the Great Resignation, companies must monitor the cultural changes that have taken place within their organization and consider how they impact their workforce.
Measuring company culture isn’t easy, but the right practices and tools make the process manageable. In this post, we’ll walk you through the critical information you need to know about measuring company culture.
What are the benefits of measuring company culture?
A healthy company culture attracts and retains top talent
According to a 2021 report from Pricewaterhouse Coopers, sixty-nine percent of organizations that successfully adapted during the pandemic agree that culture provides a competitive advantage.
Companies renowned for having exceptional corporate culture typically have high retention rates and are able to attract top talent to their organization. This is partly because of the efforts they take to understand and monitor their culture. When it comes to hiring, high-performing businesses tend to have a process to identify candidates who’d make a great addition to their workplace culture in addition to having the skills to do their job.
Measuring company culture helps identify areas for improvement
Measuring culture also allows you to see what areas need extra attention, which is an important initiative considering the benefits a strong workplace culture brings.
By regularly measuring and monitoring your organization’s culture, you put yourself in a position to identify issues that may affect your employees and your business early on. This often allows you to resolve issues before they escalate.
3 best practices for measuring company culture
1. Identify your ideal culture
First, get clear on what your ideal company culture looks like. After all, what’s the point of measuring your culture if you don’t have any goals and benchmarks? Without guideposts to follow, you’ll waste valuable time, money, and effort tracking the wrong things.
Next, be sure your leaders, managers, and employees are aligned on your company values and mission. Define the impact you want to achieve as it relates to your workforce, your customers, your industry—and perhaps even your local community.
With this clarity, it will be easier to identify the right metrics and tools with which to measure your company culture.
2. Don’t measure everything
You can measure your culture with any metrics you choose, but that doesn’t mean you should use all of them. If you try to keep track of dozens of metrics, you’ll soon get overwhelmed with the sheer amount of work needed just to measure your company’s progress.
Once you’ve chosen your culture goals, decide which metrics are key to improving your baseline. Keep your metrics consistent so that you can map changes over time.
3. Keep an eye out for internal inconsistencies in your culture
Culture is created from a company’s beliefs and values. This means that your company’s culture is unique and one-of-a-kind. However, it is possible for parts of your workforce—like different departments or groups that work in different locations—to create subcultures that are not consistent with your leadership team’s vision of your culture and the cultures found in other teams. Due to these variations, organizations that have several subcultures don’t receive the benefits of a cohesive workplace experience.
No matter what goals your company sets, work to ensure that your culture remains the same throughout the entire organization—from the highest levels of leadership to the rank-and-file employees working at each and every business location.
Why is company culture so hard to measure?
Culture is hard to pin down, particularly for leadership and management teams, in part because they typically don’t have the same day-to-day work experience as their employees. For example, the Society for Human Resources Management (SHRM) found that 72% of business leaders believe their company culture improved since the start of the pandemic, while very few HR professionals (21%) and employees (14%) agreed with the sentiment.
That said, be wary of relying solely on employee feedback—this isn’t recommended. Even though many companies use employee surveys as the backbone of their measurement efforts, these self-reporting methods are often unreliable on their own.
Employees may choose not to tell the truth due to fear of repercussion, for instance. And even if they do give honest feedback, an employee’s perceptions and state of mind may also influence their responses. This is why it’s important to use a range of metrics and tools to measure your culture, as we’ll discuss below.
What metrics should you use to measure company culture?
In order to measure anything accurately, you need the right data. The good news is that most companies already have information they can use to understand the health of their organization.
Use the metrics below as a starting point to measure your workplace culture.
Retention and recruitment metrics
Metrics like the ones below signal how happy workers are with their company’s culture and with the organization as a whole:
- Retention rates
- Turnover rates
- Average length of time to fill job openings
- Employee referrals
When employees enjoy working for a company, they tend to stay there longer and may even recommend their place of work to other people they know. If your company fails to meet its recruitment or retention goals, your organization’s culture may be to blame.
Because these metrics track concrete, quantitative data, they complement the qualitative nature of employee surveys. This makes these figures an invaluable part of your measurement efforts.
Employee engagement can be a strong predictor of the quality of your culture, as organizations with engaged workforces typically have healthy company cultures as well.
However, research indicates that many businesses fail to support the needs of their employees. Eagle Hill Consulting found that only 38% of workers believe their organization prioritizes employee experience and satisfaction. Survey respondents also agreed that how they feel about their work experience impacts their productivity (70%) and their ability to do meaningful work (69%).
To see where your company stands, consider measuring employee engagement with metrics like productivity and absenteeism rates.
Communication doesn’t just move crucial information through your organization and allow employees to do their best work. Excellent communication allows your workforce to connect with company leaders, their managers, and each other. On the other hand, poor communication can lead to low employee engagement and lackluster business results.
When assessing the quality of your corporate communications, look at how effective your methods are in spreading information and engaging your workforce. Observe how comfortable employees are communicating with their peers, colleagues in other teams or departments, and with their managers and business leaders.
Do employees communicate respectfully? Do they support their colleagues when they’re recognized for their work? Are certain questions or topics ignored when they come up in conversations?
Internal channels like Slack, email threads, and company wikis are great places to see the quality of your employee communications firsthand.
What are the best tools for measuring company culture?
As the people who have firsthand experience with your company culture, your employees will be invaluable in helping you assess any assumptions you have about your culture.
Employee surveys (both pulse surveys and longer employee engagement surveys) can help you gather information about a wide variety of topics, such as:
- Employee sentiments about leadership and management teams
- The quality of your company’s work environment
- Opportunities for improvement related to your company’s communication methods
As we mentioned earlier, employee perceptions can also alter how they respond to your workplace surveys. So, if you plan on using this method to gather information, consider supplementing your findings with quantitative data.
Employee stories and anecdotes
In addition to employee surveys, which provide relatively short responses to targeted questions, you’ll also want to include opportunities for more detailed feedback. In most cases, this will look like stories and anecdotes collected from your employees.
Hosting focus groups and conducting exit interviews allows for real-time conversations with employees about their workplace experiences. Websites like Glassdoor, Indeed, and even Yelp and Google Reviews, can be enlightening sources of information as well.
Just like surveys, though, this method of gathering information is susceptible to human biases, inaccuracies, and emotions, so take care to use a variety of data collection methods.
Employee behavior tracking
Another way to assess the state of your organizational culture is by tracking employee behaviors that connect directly to your cultural goals.
To see whether your organization’s programming appeals to your employees, for example, you might track employee attendance at non-mandatory company events or engagement in company-wide meetings. Or, you could look at how frequently supervisors have one-on-one meetings with their team members to help determine how well your management team supports your workforce.
By analyzing how often employee behavior aligns with your company’s goals and core values, you can determine where there’s a gap or area for improvement.
Effective HR teams have a treasure trove of data on employee performance, retention rates, recruitment efforts, and more. If you haven’t already, you may want to invest in people analytics and talent management software too. These platforms don’t just gather a wealth of data for you to use—they also crunch those numbers to reveal new insights. With just a few clicks, you can review turnover trends, identify which employees are a flight risk, and even build custom reports based on your culture goals.
Use these tools to make the most of your workforce data and get a better understanding of your culture—with minimal effort on your end.
For best results, measure company culture on a regular basis
Your company’s culture will inevitably change over time, whether due to layoffs, changes in leadership, the launch of a new company initiative, or other factors. Regular assessment of your culture metrics allows you to identify trends or shifts in your culture so you can address any issues head-on.
Measure the health of your organization at least once a year to see how it changes, and whether you need to adjust your goals and initiatives to account for these developments.
If you lack the bandwidth to fit yet another task into your already-busy schedule, don’t worry. Gusto’s comprehensive HR platform has everything you need to get started with measuring and monitoring your company culture. From performance reviews to feedback surveys, our software captures the information you need to understand your workforce—and your culture—better. Create your account today to see for yourself.