Corporate Cultures and Their Impact on Recruitment and Retention - Essay Example

Corporate cultures and their impact on recruitment and retention Every family has its culture, every society, and community boast of their culture, every country to has its culture. Culture portrays the image of the unit and is the sum total of the values, attitude, behavior, and beliefs of the people, which holds the organization together. Culture speaks of the personality of the person or the organization. Culture is derived from the word ‘cultured’, which means the characteristics have been incorporated and are not original; they have been ‘cultivated’. In other words, the ‘cultivated’ attitude and behavior pattern with time becomes its ‘culture’. The past decade or so has seen the business world too formulate its culture commonly known as corporate culture. Just as the pearls become ‘cultured’ after they bear the thrashing of the waves, a business organization too formulates its culture after a lot of trials and tribulations. Today the corporations stress a lot on their corporate culture as it is a very important factor in the effective management of the ‘human’ capital. People are known by the company they keep, as much as, a company is known by the people it keeps. How exactly does a company focus on its people? What do they do or need to do to make the right human investment? Can any set norms be followed in recruitment and retention? How does this affect the IT industry today? Is the culture of a company supporting or restraining its growth? This paper will focus on the steps necessary to strengthen and maintain the organization’s culture. It will also highlight what steps an organization can take to attract and retain people. By the close of the twentieth century, business houses came to accept that people, not cash, buildings, or equipment differentiate one company from another. “Corporate culture is moving into the limelight and proving to be an untapped asset for employees and businesses alike”, according to (Louis A. Musante). Researches have shown that at the time of economic turndown the companies having strong and adaptive cultures are better able to handle the financial crisis than those with weak and poorly defined cultures. The right combination of people and culture can mean the difference between the financial success and failure. As technology advances corporate culture will assume an even bigger role especially in the IT sector as competition increases. Organizations today recognize the need to attract the right brains to thrive in the competitive market and retain the employees. “…the primary way to drive new innovation is by investing in people first”, (Linda Stanford, IBM 2005). Stanford maintains that a culture of innovation defined by its ability to anticipate customer needs and market dynamics will succeed in the next era. The Global CEO Study 2004, in which IBM surveyed 456 CEOs worldwide revealed that growth and innovation was impossible without a renewed focus on people. The norms of an organization are transmitted from generation to generation and are responsible for its financial success, which is the ultimate goal of any business organization. Understanding and assessing the company culture at every stage is vital. Change is inevitable and constant. The managers or the leaders have to keep pace with the abrupt changes that take place in the global business; they should be able to adapt to these changes. “Flexibility is vital, but so is a stable focus on the long-term strategy”, states (Richard Hagberg, 2003). Hagberg Consulting Group (HCG) conducted a survey of a wide variety of industries worldwide to assess the culture. The survey measured 33 elements of corporate culture including such factors as loyalty, trust, information sharing, accountability, teamwork, acceptance of change, external focus, organizational politics, and participation in decision-making. This survey became a pointer and the organizations made a conscious effort to foster those cultural characteristics that are helpful and to change those that stand in the way of the organization’s financial success. The research revealed that the financially successful organizations were aware of what is going around as far as the competition, their customers, and the changing technology are concerned. The leaders at the helm of affairs were conscious of the threats and opportunities that they face. It is essential that the management keep the employees motivated and involved at all times. The employees have to feel a part of the organization; they should share the vision and the mission of the organization that they work for. Once this is done they get a sense of belonging; they feel more energized. They work harder and more efficiently and remain committed. The most financially profitable companies realized, according to the research, that to remain successful and at the top, the quality of the people has to be retained. They invest heavily in the ongoing development of their people. If culture cannot be defined, it cannot be measured or managed. Culture consists of infinite variables and the environment from which it grows changes on a daily basis. Although companies such as IBM and Wal-Mart have for decades understood the value of managing culture, most companies have not. When it comes to a sustainable competitive advantage, a company's culture is one of the most difficult things for competitors to copy. Many have studied the internal processes of General Electric or Toyota for years but were unable to duplicate their performance. The key to sustaining a profitable company or a healthy economy is the productivity of the workforce, our human capital. In the American economy, where over half of the gross national product is allocated to the information sector, it is obvious that knowledgeable people are the driving force (Jac Fitz-Enz). In order to grow and remain profitable, financially successful organizations continually improve the quality of their employees, particularly their management. In his book “Execution,” Larry Bossidy suggests that given the uncertainties of business, the one thing organizations can control is the quality of their employees (cited by Jac Fitz-Enz). Culture and communication (Fay Hansen)     Jennifer Lacy, director of research for The New York Times Job Market, presented the findings of a survey of 300 job-seekers in the New York area conducted for the New York Times. Seventy-five percent of the respondents reported that workplace stress had an impact on their decision to look for a new job. However, "there is a general perception among employees that working long hours is important for career advancement," Lacy says. This notion, and the pay and promotion policies that support it, often undermines attempts to promote work/life balance. Recruitment and Retention When an organization expands rapidly or its business changes significantly, leaders then face a critical choice: invest in employee growth and development, thus making a long-term commitment to current employees, or bring in new talent. New talent is certainly necessary at times to keep the organization vital. However, bringing in new people is the riskier and the far more expensive choice compared to investing in current employees who have the potential to grow and who have demonstrated loyalty. To attract new talent the corporate culture becomes vital as today the job-seekers also assess a company before applying for a job. The company’s culture affects the decision of a job seeker and he would look at various factors. He would try to get an idea of the hours per week, and whether flextime and telecommuting are possible. He would also assess the general work environment, the interpersonal relations that the employees share, the dress code, the ambiance of the place, the training and development programs that the company normally provides to its employees, the onsite perks like child care facilities or sports and recreation at the workplace. Organizations whose cultures foster a spirit of cooperation, teamwork and trust are more enjoyable to work for. The feeling of shared fate, that “we’re all in this together,” creates focus and alignment of effort, builds a higher level of loyalty and commitment, the desire to build a quality product and provide quality service, and the willingness to go the extra mile. To sum, they look for a place where they would fit into the culture, get recognition, and have prospects for growth. When employees feel a strong connection with an organization they are motivated to work hard and do whatever it takes to further the organization’s goals. They identify with the organization and see its goals as their goals. When these values are strong in the corporate culture – in the living daily culture, not just on paper – loyalty flourishes, and turnover of employees declines, significantly lowering the cost of hiring and training. The stronger the bond between the organization and its employees, the greater the commitment and motivation to learn about your own corporate culture. A critical assessment also takes place to learn which cultural attitudes and behaviors are conducive to success and which are detrimental. A survey was conducted by Richard Hagberg to assess the employee’s views of their organizations’ corporate culture. It showed that what was supposed to be the corporate culture was true only on paper but not effectively implemented. Data suggests that executives may unconsciously attempt to sell their own views to employees rather than listening to employee ideas and concerns. The chart below is evidence of this fact: Retaining employees, especially the high-performing employees, can be challenging in this fast-paced employment world. No matter what the current economic climate may be, organizations must be sensitive to the importance of retaining their top performers. Management must establish systems that increase the likelihood that those who get results are recognized and promoted. “Managers readily agree that retaining your best employees ensures customer satisfaction, product sales, satisfied coworkers and reporting staff, effective succession planning, and deeply imbedded organizational knowledge and learning” states (Susan M Heathfield). She maintains that losing a middle manager costs an organization up to 100 percent of his salary. Employee retention is essential for another vital societal reason. Over the next few years while Baby Boomers (age 40 to 58) retire, the upcoming Generation X population numbers 44 million people (ages 25-34), compared to 76 million Baby Boomers available for work. This simply means that a lot fewer people would be available to work. Methods have to be devised to increase employee involvement in decisions. They should be given an opportunity to participate in the solutions. Survey and anonymous feedbacks should be undertaken which helps spot changes in the attitude and morale of the employees. An atmosphere has to be created where the employee feels free to voice his opinions, problems or even suggest ideas for growth. The expectation from an employee have to be clearly defined with time frames. Changing this constantly creates unhealthy stress and makes the employee feel insecure. When a new recruit comes in it takes him a while to get used to the corporate culture, to adjust to new surroundings, new rules, and new expectations. The successful retention efforts should begin with a proper orientation. People need to feel wanted, valued and appreciated. They want to be stable and do meaningful work. Building a stable workforce takes considerably more than just throwing money at people or giving them use of a fancy car. The corporate culture should support teamwork in an atmosphere of trust. To achieve workforce stability employers must invest in growth and retention of its people and follow definite strategies. Corporate cultural impact on the IT sector Corporate culture is the key to recruitment and retention of top talent. Today the sector is booing and the turnover of employees is the highest than any other industry. If a candidate has received campus placement by an IT giant, he can be sure to receive a more attractive offer from a competitor. Such is the IT market today. We live in a time of unprecedented technology usage but mere technology does not suffice. The fastest processor and the biggest databases can be rendered futile unless there are people to provide backup support or continuously update the software. The IT companies spend a good amount of their resources in training people. This apart, they have to provide right ambiance for work and growth. They have to ensure the right rewards and perquisites that are prevalent in the industry. IBM feels that a work/life balance is vital to attract and retain the right talent. “Modern organizations face a skills quandary. On one hand, their workforce is aging and skilled workers are in increasingly short supply, while the demands of clients driven by globalization and advanced technology are becoming more complex. So any organization that fails to maximize opportunities for all employees will fall into a talent gap and miss business opportunities,” feels (Kylie Nicolson, 2005). IBM being a multinational company needs to focus on cultural diversity. IBM’s cultural diversity strategy relies on raising the general level of awareness of different cultures within the organization. It is very important to understand the local culture, its people and their diversified needs and motivation levels. For instance IBM, Australia would celebrate Chinese New Year for its people in Sydney. It has to adopt the local culture and flow along with the people.   Workplace surveys, Hansen feels, still register high levels of employee stress stemming from work/life conflicts. Large groups of women and minority workers remain unemployed or underemployed because of family responsibilities and bias in the workplace. IBM is attempting to incorporate benefits to attract women and the disabled. Building a diverse workforce rests on an employer’s ability to attract and retain female and minority employees who may not be able to work without flexible scheduling or benefit programs designed to help them meet personal needs and family responsibilities, according to Hansen. IT is regarded as the key change agent in cultural transformations, but this perspective is tilted. Cultural transformation is driven by people--leaders at all levels of the company. IT can serve as a catalyst for change and provide a template for implementing that change. Very often the existing culture is forced to adopt a new technology platform without sufficient regard for existing user patterns and processes. This makes the technology a burden. Corporate culture and the example set by top managers can make or break work/life programs. Studies and researches suggest that the culture of the financially successful organization's value and reward risk-taking. Employees are encouraged to experiment and try out new approaches. Management listens to new ideas. Innovation and creativity are valued, rewarded and recognized. They have established a cultural norm that supports employees for continually challenging outmoded or inefficient systems, procedures, and assumptions. Established ways of doing things are constantly reassessed. Inefficient processes are re-engineered. Globally companies are realizing the importance and need to invest in the human ‘capital’. They can no longer take people for granted and sit back. The global economy is expanding, business opportunities growing but the available workforce steadily reducing. A culturally strong organization succeeds in attracting and retaining the top talent and can expect to climb the ladder of success. Works Cited: Stanford, Linda. Corporate culture is the key to unlocking innovation and growth, URL: accessed 16 Oct 2005 Musante, Louis A. Better Living Through Culture, URL:< http://www.optimizemag.com/article/showArticle.jhtml?articleId=17700582> accessed 16 Oct 2005 Hagberg, Richard. Organizational Cultures that Get Financial Results, URL:< http://www.hcgnet.com/content/Insights/Organizational_Cultures_that_Get_Financial_Results.pdf> accessed 16 Oct 2005 Hagberg, Richard, Corporate Culture - Distorted View from the Top, URL:< http://www.hcgnet.com/content/Insights/Distorted%20View%20from%20the%20Top%20Article.pdf> accessed 16 Oct 2005 Fitz-enz, Jac, Human Capital: The Profit Lever of a Knowledge Economy, URL:< http://www.bettermanagement.com/Library/Library.aspx?LibraryID=2696> accessed 16 Oct 2005 Hansen, Fay, Truth and Myths of Work/Life Balance, URL:< http://www.workforce.com/archive/feature/23/36/99/index.php> accessed 16 Oct 2005 Heathfield, M Susan, Top Ten Ways to Retain Your Great Employees, URL:< http://humanresources.about.com/od/retention/a/more_retention.htm> accessed 17 Oct 2005 Nicolson, Kylie. Cultural diversity, IBM style, URL: accessed 17 Oct 2005 Read More