Warning Signs of Bad Company Culture

Your company’s culture—how your employees work together and support each other, how committed they are to the company and its mission—is a fundamental component of business success. When the workforce meshes as a team, when individuals take the initiative to solve problems and anticipate customer needs, their companies turn in better financial results, provide stronger customer service and enjoy higher retention rates among employees.

All this means that paying attention to company culture is about more than making employees feel good. It sets your firm apart and lowers costs. However, it’s not something that can simply be "managed."

Culture is made up largely of people and their behaviors. And, by their nature, people need to be encouraged, educated and, in general, paid attention to if they’re going to be effective teammates and employees. So your company’s culture is something you always have to keep an eye on. If it begins to sour, performance may suffer at every level and you may find yourself scrambling to replace employees at a time when the business can’t afford internal disruption.

Here are some common signs that your culture is turning negative.

High Absence Rates or Frequent Tardiness

Workers can call in sick or show up late for a number of perfectly legitimate reasons, such as illness or a family issue. But an unusual rate of absence or an increase in tardiness can also be signs that they’re feeling overly stressed or under-appreciated.

Chances are, you keep track of absences and lateness already. But it’s useful to regularly step back and look for patterns in the behavior of both individual employees and groups. For example, when one department’s absence rate is noticeably higher than those of other teams, it’s worth looking at what, if any, issues may be at play to cause dissatisfaction.

Absence is a symptom, and the key is to understand the cause. Whether employees are under undue pressure, feeling harassed or spreading around the flu, it's critical to identify why something’s happening before you can look for ways to address it.

High Employee Turnover

High turnover imposes a number of costs on a business: There’s the financial costs of recruiting and onboarding new workers, as well as the loss in productivity that occurs when experienced employees leave and new ones must get up to speed. There’s the disruption that occurs within the team as a new personality is introduced and works their way into the company’s culture.

Here again, record-keeping is your ally. Keep track of whether the turnover rate is higher in some places than in others. Also, conduct exit interviews to get the departing worker’s honest feedback about what they liked—and didn’t like—about their job, their team, their managers or the company. You may not like everything you hear, but what you hear may save you further challenges down the road.

Lack of Employee Motivation

When people don’t appear motivated to do their best work, it usually indicates they’re not particularly enthused about their job or their company. Chances are, that lack of enthusiasm is a sign that employees don’t feel close to the organization or its mission.

How do you bridge the gap? By communicating. By sharing information about the business, you’ll encourage workers to feel valued and involved in the company.

Regularly distribute updates about the company’s wins, including new customers and new employees. Share ideas you’re considering for future lines of business. Recognize workers who’ve achieved solid results or hit milestone anniversaries.

And don’t shy away from sharing bad news. People appreciate honesty. By giving them the whole picture, you’ll make workers feel as if they’re closely connected to the company.

Job Applicants Don’t Turn into Hires

If you’re attracting applicants for open positions but having trouble convincing them to accept an actual offer, they may be seeing something they don’t like about your company from the outside.

The issue may lie with your talent acquisition process. If you’re requiring too many interviews or the path goes on and on, candidates may get frustrated and walk away. If that’s the case, look for ways to streamline your pipeline as much as you can.

There’s also a chance your managers and team members are revealing issues with the company’s environment. If they don’t quickly respond to messages or answer questions, they may be signaling that they’re not particularly engaged themselves. If they’re aloof or rude, they’re implying the company tolerates their behavior, which gives candidates good reasons to look for work somewhere else.

To find out what’s going on, follow up with candidates who’ve declined your offers. Tell them you want to understand their decision and ask about their interactions with the company at each step, from the time they first reached out until the moment they turned down the offer.

Solution: Take a Holistic Approach

If your company culture is under strain, chances are you’ll see more than one of these warning signs. Remember that these are signs of a larger issue—they’re not the issue itself. Addressing issues in the company culture entails focusing on the overall culture. This isn’t about absences, or turnover or any other issue by itself. It’s about learning why employees feel distant and disengaged from the organization.

Managers play an important role in developing and supporting your company’s culture. So be sure to educate them on why it’s important, and be clear about the company’s values and the type of culture it should maintain. Provide training to help them with communications and other management skills, and make sure they have time to interact and listen to employees regularly, and follow through on concerns they may hear.

And don’t forget: Leadership counts. Demonstrate the culture’s importance by respecting it yourself.