Turnover is a killer. As the Wall Street Journal stated:
High employee turnover hurts a company’s bottom line. Experts estimate it costs upwards of twice an employee’s salary to find and train a replacement. And churn can damage morale among remaining employees.
Think about the last time you switched jobs or the last time your friend switched. If you traced the reasons for leaving, all the way back to the source, you’ll see culture as a key driver. Consequently, if during your interview process you aren’t asking what the company’s culture is like and talking to people who currently work at the company to hear from them about the culture; you’re making a mistake.
I’ve worked in places that had a great culture (eg Fallon) and worked at places that had a horrible culture (eg Fallon after the Publicis acquisition). A great culture gets you out of bed on a rainy day when you feel less than 100%. A poor culture has you looking for reasons to avoid going into the office.
More than a year ago, I stumbled across this great deck from Netflix on their culture. As the first slide states in black and white: Freedom and Responsibility are the key pillars and they need to work in harmony. It sounds incredibly simple; doesn’t it? But, if creating a great culture was simple and if creating a culture that attracted great talent were easy, the job turn over rate would be nil.
The deck is fun. It’s inspiring. But, it’s also smart and it’s on point with where the market is today and is going. I think some of the best thinking is contained within slides 95 thru 108. Those slides focus on how they are marrying culture with compensation…and you can see how their approach is attracting top talent.
I think Netflix is on to something. The market will always dictate the value of a person. Getting into a constant cycle of counter offers because you reward employees X times a year at specific intervals, is taxing, time consuming and has a negative impact on culture.
I’m seeing more and more companies…usually heritage brands…investing in cultural transformation. They have to if they want to compete against the startups, Google’s, Facebook’s and RedBull’s of the world. To give you an example of what your company is competing with when it comes to culture, check out Valve’s (one of the leading video game developers) employee manual. How can you not be inspired when you see a section titled “Risks” that leads with this paragraph:
What if I screw up?
Nobody has ever been fired at Valve for making a mistake. It wouldn’t make sense for us to operate that way. Providing the freedom to fail is an important trait of the company—we couldn’t expect so much of individuals if we also penalized people for errors. Even expensive mistakes, or ones which result in a very public failure, are genuinely looked at as opportunities to learn. We can always repair the mistake or make up for it.
Wait a second…a culture that doesn’t force you to have 100% of the data…that doesn’t just reward modest 3% growth based on risk averse decision making? Um, sign me up, is what most people would say.
Money is nice. Titles make you feel important. Both can attract talent. But, what ultimately retains great talent is a culture that rewards that great talent. But, rewarding goes beyond dollars and cents. It’s recognition. It’s autonomy. It’s promoting them when they deserve to be promoted, not making them wait til the annual review cycle. It’s letting them work from wherever they want to, because they always over deliver. It’s all of those and so much more.
Culture is one of those things that you can’t really describe, but you can feel it when it’s there and you know when it’s missing. It was there at Fallon…when I started at Fallon, you could feel it. It was more than the decor, the nonexistent dress code, the beers in the conferences rooms at 3, the open door policy (yes, I once walked into Pat Fallon’s office, had a beer and talked shop), true commitment to innovation and an elimination of bureaucracy. It was all of that and more.
When I’m evaluating a potential opportunity, I always start with evaluating that company’s culture. It’s the most important element. Unfortunately, few have it. But, you need get it quickly, because savvy and desirable talent won’t wait for you to evolve…they’ll move on.