Company Culture 4 min

Beyond the Free Lunch: What Company Culture Is and Why It’s Important

Posted by Ashley Mugnolo

Here’s what hiring managers hear a lot: “What is the company culture like?” I can’t tell you how many times I have been told that the culture was great, only to discover further into the interviewing process – or the job itself – that perhaps the hiring manger didn’t quite know what company culture is […]

Here’s what hiring managers hear a lot: “What is the company culture like?”

I can’t tell you how many times I have been told that the culture was great, only to discover further into the interviewing process – or the job itself – that perhaps the hiring manger didn’t quite know what company culture is or why it was important.

So what exactly is company culture? What is it not? And why is it important?

How is company culture defined?

Barry Phegan, a corporate culture consultant at companyculture.com, defines company culture as, “The company’s shared beliefs, values and practices — the unique way an organization sees the world and acts. It is what employees do and what their actions mean to them.”

To wrap the mind around how culture at your organization might be described, think about your own family; the values you share (like recycling), your unique way of talking (those little inside jokes and nicknames), as well as your backgrounds and experiences — this is the stuff that makes up your family culture. Those same sorts of things are what make up your organization’s “work family” culture.

Culture is partly what the company as a whole believes in, is willing to stand up for, and demonstrates through its actions. Zappos, the online shoe and clothing retailer, is an example of a company with highly defined culture.

Zappos showcases its culture through a company culture blog so that prospective employees can get a feel for what the workplace is like before joining it. The e-tailer is also committed to sustainability, philanthropy, and sets aside a chunk of their budget for employee appreciation activities.

Zappos’  Zappos Family Core Values, as seen above, includes a list of bullets that define their culture. They even offer new hires $2,000 to quit after their first week of training if they decide the job isn’t for them.

What is company culture not?

Raise your hand if you have been told that a company has great culture because employees get a free lunch once a month or have access to a free, fully stocked coffee bar? [Raises hand.] Don’t get me wrong, these are great perks! Employees love them. But these types of perks are like sprinkles on a sundae. They add value, but don’t define the dessert.

Company culture is also not what an employee or group of employees bring to the table. Employees will come and go. Hire employees that fit your culture, don’t build your culture to fit your employees. Like turnover, true company culture is constant.

Why is culture important?

Creating and sustaining a positive, identifiable company culture has been shown to lead to:

  1. Increased Productivity

In a recent survey of business owners carried out by The Alternative Board (TAB), 86 percent of respondents say they believe company culture directly impacts productivity. Being a good fit with your company culture tends to make you a happier employee. Studies show that happy employees can be up to 31 percent more productive than those who aren’t happy.

  1. Decreased Turnover

Companies with a weak or a poor culture can expect a turnover rate of almost 50 percent. A strong culture can help deliver a turnover rate of near 13.9 percent.

  1. “Self-Recruiting” Employees

On average, a US company spends $4,000 per employee on their recruitment, interviewing and hiring process. So, how does having an amazing company culture help cut these costs? If an employee is happy with their job, they are more likely to tell their friends and former co-workers about it, which serves to generate interest from qualified professionals who have a track record with your current employees You can promote this by encouraging your employees to share great culture moments on their social media channels or share company updates. Instagram is a great platform for this, like the time Oneupweb had an office solar eclipse viewing party (see Instagram photo below).

So there you have it, the rhyme and reason of company culture. If you’re looking to join a company with a great culture, check out our current job openings.

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