What do Microsoft, General Mills, and FedEx have in common? They are all clients of Great Place to Work, a global human resources consulting firm that specializes in organizational trust.
With offices in 43 countries and on six continents, Great Place to Work advises businesses, government agencies, and nonprofit organizations about leadership and culture. It is also the source of Fortune Magazine’s annual 100 Best Companies to Work For list.
Company culture directly impacts the bottom line, says Charles Fair, head of consultancy at Great Place to Work’s United Kingdom office in London.
“It’s important for an organization to get its culture and values right,” says Fair. “It’s better for business profitability.”
But if a company’s main objective is profitability, this may prove short-sighted. Often, this holds true even more when a company goes from privately held to publicly owned, he says. “This can result in less management integrity because of pressure to hit quarterly earnings and targets.” He cites U.S. banks chasing subprime mortgages (which contributed to a crash of the economy) as an example.
Rather, it is the view of Great Place to Work that a company will be better off in the long run if it operates according to solid principles of ethics, long-term integrity, and respecting its employees as thinking individuals. However, making a shift to this way of doing business can pose short-term costs, as these high standards expose a learning curve and may also prohibit otherwise attractive deals.
Ultimately, though, when a company becomes a great place to work, the balance sheet usually ends up enhanced. One of the main reasons for this, according to Fair, is enhanced employee engagement. “When people are happy and engaged at work, the product tends to be better, and HR costs are lowered,” says Fair, who also alludes to the societal benefits arising from a happy workforce. “The bill to the National Health Service would be reduced if people were happier at work.”
Great Place to Work assists its client companies in assessing existing company culture, changing it as needed, and sharing the positive results with others. “We hold a mirror up to organizations,” Fair says. “We audit people practices that can drive culture.”
He acknowledges that it can pose a challenge for a company to shift from a traditional, top-down, hierarchical environment to a culture of engagement and empowerment, but that the move is worth it in the long run.
One of the keys for a company to become a great place to work, Fair says, is to shift its focus from hierarchy to performance. Companies that don’t make this shift are not only at higher risk of losing employees to attrition, but are also limited on how well they can perform, especially during hard times.
“When a company has employees who are in a box, who cannot think for themselves, it is less resilient as an organization when the going gets tough,” states Fair.
Great Place to Work will soon release several white papers relating to best practices for company culture. Some of the topics include: employee perceptions of HR, getting from good to great, differing perspectives, and gender-related issues.