Benefits of Company Culture, Company Culture
Great Place To Work® has studied high-trust workplace cultures for almost 30 years. Our data represents over 100 million employees’ perspectives. It unlocks the mystery of what makes a great employer, regardless of size, industry or region of the globe: trust.
At its core, a great workplace is one where employees trust the people they work for, have pride in what they do, and enjoy the people they work with.
We know that high-trust workplaces are better for people, but they are also proven to be better for business. Here are just a few of the performance results you can expect to enjoy when you build a great organizational culture.
1. Superior financial results
According to independent investment firm FTSE Russell, comparative cumulative stock market returns among the publicly held Fortune 100 Best Companies to Work For® are nearly 3x greater than the market average.
Another independent study of the100 Best Companies found that great workplaces achieved superior results over a several-year period across metrics including: operating income per employee, operating margin, growth rate, and return on assets.
Clearly, workplaces with a high-trust culture have a competitive bottom-line advantage in the marketplace.
2. Lower employee turnover
Research from the Society for Human Resource Management (SHRM) estimates that the total average cost of turnover is 90% - 200% of the exiting employee’s base salary, and more than 12% of pre-tax income for the average company.
Best Workplaces have substantially lower voluntary turnover than their peers, on average about 50% less.
The 2019 Fortune 100 Best Companies to Work For® were no exception. Their average voluntary turnover rate was just 12% across employees. The national average was 27% over the same period.
Retaining employees adds up to big savings over time.
3. Better customer service, happier customers
According to Great Place To Work research, employees working at Certified great workplaces are 34% more likely to believe their company provides excellent customer service.
4. Employee Well-Being
A four year-research project led by Alex Edmans of the London Business School examined the link between employee wellbeing and financial performance across the high-trust companies recognized by Great Place To Work® and Fortune.
Edmans found employee well-being at these companies preceded positive financial performance, rather than the other way around.
“The 100 Best Companies to Work For delivered stock returns that beat their peers by two to three percent per year over a 26-year period,” said Edmans in a TedX Talk on the topic.
“Simply put: companies that treat their workers better do better. And this fundamentally changes the way that managers should be thinking about their workers.”
5. Innovation
Everyone agrees innovation is a crucial competitive advantage in an ever-changing market. But how do you get there? By building an “Innovation by All” culture of trust and inviting all employees into the process.
This kind of environment cultivates more quality ideas and greater implementation speed – all of which result in 5.5 times the revenue growth of peers with a less inclusive approach.
6. Agility
Our research into organizational agility has shown that high-trust workplaces move faster than organizations not built on trust.
In fact, at the best, 33% more employees report “People here quickly adapt to changes needed for our organization’s success.”
Besides creating an environment of transparency, collaboration, and innovation, trust means that companies can make quicker decisions — and then act on them.
7. Higher HCAPS Scores
At high-trust companies, employees are empowered to make decisions that they believe will serve the customer without undue oversight or bureaucracy, and this ultimately serves the business.
Among healthcare organizations on the 100 Best, Hospital Consumer Assessment of Healthcare Provider and Systems (HCAHPS) satisfaction scores average 4% higher than the national average for “Overall Hospital Rating.” Scores were 7% higher for whether patients would “Recommend the Hospital.”
8. Strong employer branding
More consumers are looking to brands that align with their values — and looking for companies that care. Job hunting is no different.
Building an employer brand known for treating employees with respect and generosity is not just the right thing to do. It's a smart recruitment strategy.
93% of employees at the 100 Best Companies to Work For say they're proud to tell others where they work. That’s free marketing.
To learn more about the correlation between high-trust cultures and business success, join our email list for our latest research and events.
