Poor company culture is costing the UK economy £23.6 billion per year

A new report claims that a third of people (34 percent) who leave their job, do so because of perceived poor company culture. The report, authored by breatheHR claims the associated cost of bad company culture is around £23.6 billion per year. The survey of 2,500 people analysed in The Culture Economy, also suggests that well over half of SME leaders (60 percent) consider company culture as a ‘nice to have’ in their business.This mindset has a number of knock-on effects. According to the Chartered Management Institute, effective leadership could improve Britain’s productivity by 23 percent. However, with over half (53 percent) of employees surveyed who distrust their senior management, thinking their bosses ‘didn’t appear to know what they were doing’, there is some work to be done.

In addition, the survey claims three-quarters (75 percent) of SME decision makers are satisfied with their business productivity and one in five (22 percent) don’t measure business productivity at all.

Other key findings:

• Wider impacts of a positive work culture – SME decision makers stated positive culture led to: improved morale and relationships (50 percent); employees going the extra mile (44 percent); better customer service and satisfaction (43 percent); improved individual performance and productivity (43 percent) and reduced employee turnover (35 percent)
• Trust in business leaders – a fifth of workers (20 percent) don’t trust their senior management. Of these, the main reasons for distrust was because: they don’t feel supported by them (59 percent); they don’t appear to know what they’re doing (53 percent); they’re not transparent (45 percent), they play too much office politics (41 percent) and are self-centred (41 percent)
• Generational differences – interestingly, the highest levels of trust in leaders and management were amongst young people 18-34-year olds (63 percent) and the lowest was among 35-54-year olds (56 percent)
• Engaged and focused Brits – three-quarters (76 percent) of the UK workforce are engaged and focused at work, compared to 8 percent who admit they aren’t
  Patrick Woodman, head of research for the Chartered Management Institute, said: “As this timely report shows, a strong, inclusive company culture is essential for long-term business performance. The tone is set from the top, so management and leadership play a crucial role and creating the conditions for workers to thrive. In particular, transparency and communication are vital for building trust and engendering a sense of purpose among staff.

“The top three things every manager should start to do are share their thinking with their team, admit to their mistakes and uphold their company values. Employers must also recognise the pivotal role played by managers at the heart of their organisations, and support and develop them to succeed.”

Richards continues: “Our results also uncover a trust epidemic happening across UK businesses. Again, this is fuelled by poor workplace cultures plaguing SMEs, resulting in them losing their top talent. Although there are many small businesses with fantastic and inspiring cultures, over half of them still don’t value its importance – this is largely due to time constraints. As such, we’ve alleviated some of the work by creating a culture plan and recommendations to follow. It’s time for those business owners to sit up and pay attention. After all, it makes business sense to do so.”