Stats show that companies investing in positive workplace cultures have 12% more productive employees. This is just one of the positive effects of thriving work cultures on ROI.
But how do you measure them?
This is exactly what we'll cover in this article.
Let’s start with a brief overview of business benefits that positive work cultures can bring:
- Boosting employee productivity and efficiency:?A positive workplace culture promotes teamwork, open communication, and collaboration. When employees feel comfortable and encouraged to ask for and give constructive feedback and share their ideas, their performance levels tend to increase.
- Reducing turnover and recruitment costs:?People who work in an environment where they feel appreciated and do meaningful work are less likely to present turnover intentions. In other words, when employees connect with the culture in the office, they stay.
- Enhancing customer satisfaction and loyalty:?Happier, more engaged, and empowered employees will respond more to customers’ needs. When comparing companies with high employee engagement to those with low one, Gallup discovered a 10% difference in customer loyalty between the two categories.?
- Minimizing absenteeism and workplace conflicts: The same Gallup study mentioned above has proven that companies with higher employee engagement levels—a result of a healthy workplace culture—have an 81% lower absenteeism rate.
- Leveraging employee potential and creativity: Employees with higher levels of psychological capital, social capital,?and?workplace well-being are more capable of reaching their?full?potential. More specifically, 67% of US workers believe workplace culture strongly impacts their level of innovation and creativity.
While everyone agrees that a positive workplace culture influences employees’ engagement levels and overall performance, most leaders don’t know the ROI of investing in it. Here are a few practical steps to measure the financial impact of workplace culture initiatives.
- Benchmark your company culture against industry standards: This will provide context to the financial performance of the workplace culture you’ve struggled to build. It will also help you identify the strengths and weaknesses of your cultural initiatives and measure the progress.
- Leverage advanced workplace analytics: Collecting data is crucial for proving that your organization's workplace culture has a positive ROI. Space utilization, employee satisfaction, and presence reports are just a few metrics you'll want to use to build an ROI business case for company culture initiatives.
- Assess the cost of culture-driven turnover: Consider the financial impact of hiring and onboarding, reduced productivity during the hiring and onboarding process, and a bad reputation. Once you have all these costs, compare them to building and maintaining a healthy workplace culture.
- Quantify training and development impact: You should also include the costs of training and investing in new employees’ development in your business case for investing in workplace culture.
- Explore how cultural factors boost customer satisfaction and profitability: One of the most heavy-weighing arguments that a strong company culture has a significant financial impact is the?higher level of customer satisfaction.?Highlight the intrinsic link between an organization’s culture?– that aligns with the values and expectations of its customers – and the level of customer satisfaction and loyalty.
- Collaborate with the finance team: Team up with the finance department in your organization and ask for help in analyzing the data you’ve collected and turning it into compelling insights presented in a way that aligns with those key metrics that the C-suite resonates with.
- Review financial metrics before and after cultural initiatives: A before-and-after report is the most compelling tactic for demonstrating a positive ROI for your cultural initiatives within the company. Present a comparative analysis of the key financial metrics before and after your specific actions to improve the company culture.
This is an excerpt of an article originally published on www.yarooms.com.
For more statistics on the workplace culture ROI and recommendations on tools for gathering insights from workplace data, read the full story here.
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