If you found it hard to compete for talent last year, brace yourself. The talent war is about to get even tougher.
While CEOs recognize the economy is slowing down, their own prospects for growth remain strong. The Q4 2019 Vistage CEO Confidence Index survey shows that only 21% of Wisconsin CEOs surveyed thought the economy recently improved. That’s compared to 26% nationally.
However, that same survey found that 68% of small and midsize businesses in Wisconsin expect higher revenues this year, and 58% plan to hire more workers.
This has two important implications.
First, companies are all trying to hire at the same time to support growth. Second, talented employees are in a position to choose from multiple opportunities. But few workers are looking for jobs right now. With a Wisconsin unemployment rate of 3.4%, there are more jobs than people.
That’s why many small and midsize businesses focus on better compensation packages or employee perks. While that’s a reasonable approach, it overlooks a potentially more powerful tool for talent recruitment and retention: culture.
Why culture is a gravitational force
Culture is the powerful, unseen force that connects and motivates your employees. It becomes the brand of your business. It can include things such as the way people communicate with each other, how they set goals, how leaders explain the company’s mission, and how teams work with each other.
Culture influences whether the best people choose your company, remain with you or leave. In fact, strengthening your company’s culture can deliver three important benefits.
- Employee engagement and performance will improve. A strong culture acts like a magnet that keeps good employees close to a company. When employees feel like they fit in, they form an emotional connection to their work and colleagues.
- Outside talent will want to work for you. Your company has a certain vibe that’s obvious to outsiders, even if it’s not obvious to you. It stems from your culture and can be felt by the way your employees interact with customers and talk about work with their family and friends. Talented people who like what they hear will notice and want to work for you.
- People who don’t fit your company will leave. Culture defines acceptable behavior for employees, and it calls out inappropriate behavior. Job candidates or employees who are unwilling to abide by those rules won’t want to work for you.
In Vistage’s latest survey of small and midsize businesses, fewer than one in 10 said they were satisfied with the strength of their culture. That compares with the national average of slightly more than one in 10.
In other words, there’s major room for improvement. Strengthen your culture and you might be able to steal talent from your competitors.
Four ways to start
Leaders can start with these four steps.
1. Accept that culture starts at the top.
If you’re the CEO, you must create, promote and reinforce your ideal culture before your employees will embrace it. If you’re leading a team, take responsibility for explaining the culture to your team. Hold members accountable.
2. Determine quantifiable metrics that measure culture.
Culture is a tricky thing to measure, but it’s not impossible to quantify. Because it’s directly connected to hiring and retention, metrics related to employee turnover, time-to-hire and employee engagement can shed light on your cultural strengths and weaknesses. Annual engagement studies and pulse surveys can help you understand what you need to do to keep employees.
3. Lead by example.
Ask yourself: How do I show up to work every day? Do my actions reflect our cultural values? Am I walking the talk? If you don’t live your culture, your employees won’t either.
4. Communicate your mission, vision and purpose — clearly and consistently.
Explain it visually – by using posters, for example – and verbally. Let employees know exactly what they must do to support your vision. Culture will weaken or mutate if you don’t define or measure what people must do to support it.
CEOs who want robust business results and an office of productive, thriving employees should use those four steps to create a culture with intention.