"We found through Care.com's 2012 survey of our customers that turnover was costing, on average, 150 percent of each lost employees' salary -- dealing with the disruption, search, interviewing, all of that," Levin says. "If your culture's toxic, you're going to see this. And you'll also see your reputation take a hit as people turn to social media to tell everyone how awful their experience was," she says.
Since word-of-mouth is one of a company's best recruiting tools, this factor alone can have a huge impact on business success, says Levin. "If you have a company of superstars, wouldn't you want to pull in people like them from their personal networks?" she says. Without a solid culture, whatever that may be, you may be destined to bad hires and high turnover.
The “Glassdoor effect” is absolutely real, and it’s a major cultural influence that companies shouldn’t ignore, says Joyce Maroney, senior director of customer marketing and director of The Workforce Institute at Kronos. If you're not actively encouraging your employees to speak out about what's both good and bad in your organisation and its culture, other outlets, such as Glassdoor, InHerSight, Indeed and Kununu, allow them to anonymously post their thoughts, feelings and experiences with your company, and, for better or worse, they will use them, Maroney says. The “Glassdoor” effect can either help you or hurt you, so try to make sure you're the “first responder” when it comes to issues in the workplace.
"It's really, really important to focus on culture issues and on listening to what your employees want and need and delivering that. Part of that is actively encouraging them to provide feedback to you and on public sites, without 'cherry-picking' people who will only post positive things," Maroney says. She adds that Kronos’ Glassdoor reviews are one of the major drivers of applicants for open roles because of the positive feedback from former and current employees, and it’s something the company actively works to perpetuate.
Culture comes in many flavors
The notion of a desirable culture will vary from organisation to organisation, and can be extremely different depending on geography and industry, says Levin; it's not a “one size fits all” proposition. An investment bank with wealthy, conservative clients will have a very different culture than, say, a company that manufactures snowboards -- one will necessarily be more buttoned-down than the other, and that's fine, as long as it's clearly stated and you're not misrepresenting your organisation, says Levin.
"The great thing about establishing and owning your culture is you can guide the conversations and hire the right people for that culture. Some cultures don't work for some people, and that's fine, but you need to be upfront and truthful about who you are as a business so it works for both you and your employees," she says.
Sign up for CIO Asia eNewsletters.