Ignore workplace culture now and you will kill your company, TechWire columnist warns

Editor’s note: Veteran entrepreneur and investor Donald Thompson writes a weekly column about management and leadership as well as diversity and other important issues for WRAL TechWire. His columns are published on Wednesdays.

Note to readers: WRAL TechWire would like to hear from you about views expressed by our contributors. Please send email to: info@wraltechwire.com.

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RESEARCH TIANGLE PARK – As they’re getting blasted with layoff news on a daily basis and struggling to make sense of the difficult economy, many C-Suite leaders are also facing a largely hidden challenge – the struggle to find workers. Even more surprising, the most significant factor isn’t salary or remote work options. Prospective employees and those who leave jobs cite one thing over and over again – healthy company culture. 

While this factor might seem incomprehensible for some readers, a recent survey by HR software giant Paycor revealed 62% of respondents said the U.S. faces “a permanent talent shortage.” In addition, Paycor researchers cited a number of reasons that have led to the problem, including baby boomers retiring at unprecedented levels and significant declines in birth rates and immigration. As a result, they conclude that by 2030 (which is much closer than you think), jobs will outnumber workers for good. 

What got my attention though is the link between a permanent talent shortage and leadership. “Organizations with the most effective leaders will see higher employee engagement, and that will lead to lower turnover, higher retention and healthier company cultures,” the researchers explained.

Donald Thompson

IGNORE CULTURE AT YOUR OWN PERIL

According to Paycor, the top three priorities for HR leaders in 2023 are retention, recruiting and culture. The tie between these initiatives hinges on strong leadership that creates culture-centric organizations. 

“The phrase ‘money can’t buy happiness’ has never been more evident. In a highly poachable market, employees and managers alike are putting company culture first above salary and compensation,” said Raul Villar Jr., chief executive officer of Paycor. “While money can get people in the door, the one thing even the toughest industry competitor can’t beat is an incredible company culture – its values, beliefs, behaviors and default attitudes. …Companies with toxic or even just mediocre cultures will have no choice but to continuously raise wages as their primary tactic for retention.”

If you want a more pressing picture of Villar’s warning, imagine your organization in 2030. Are you CEO or a C-Suite leader or have you turned over the company to the next generation of leaders? If you jumped six and a half years into the future, would the company be fully staffed and ready to win in the marketplace? 

CULTURE, HAPPINESS AT WORK AND STRONG TEAMS

The current political rhetoric about change via a diversity lens may have you thinking twice about acting boldly in the face of the negativity you’re seeing and hearing in the media, but your employees and future employees are looking to you for leadership. There is no stopping change. Cultural transformation is on the horizon, and diversity is happening whether leaders embrace it or not. 2030 is certainly a defined marker, but if you want an even clearer perspective, ask your young professionals how they view the significance of corporate culture.

Millennials and Gen Z are the most diverse generations in history – this is a fact. They have grown up in a world that is more connected and aware of social issues. Not surprisingly, the result is a more intense focus on DEI when considering where to work and where to spend their money. Millennials, for example, are more likely than Gen Xers or baby boomers to consider an organization’s DEI policies when determining where to work. 

Culture is essential for millennials and Gen Z based on their awareness of systemic discrimination and inequality. They see the inequalities inherent in access to education, healthcare and economic opportunities. Their collective reaction is a call for more diversity and inclusion – particularly in the workplace. While I have yet to see hard evidence, the anecdotal assessment seems to be that millennials and Gen Zers are more deeply committed to the idea of fairness and giving everyone an equal chance for success. They’re not just out for their own individual gain; they view success as “ours,” not “mine.”

The cry for diversity also carries into how young professionals view teamwork. They recognize that diverse teams are more creative, innovative and productive. Since they better reflect what the future is going to look like, their viewpoints are more naturally attuned to cutting-edge ideas, like inclusive language usage and culture-centric leadership, as guiding principles. 

This is where your leadership and the organization’s future intersect. If the supposition about a permanent talent shortage is real, and most HR executives are prioritizing talent acquisition and retention, then the C-Suite response is critical. In fact, building an inclusive workplace culture now may determine whether your organization makes it in the future. 

WORKPLACE OF THE FUTURE 

Management and leadership thinking is often focused on building on things that worked in the past and using historic successes to prep for what may lie ahead. In the case of a permanent talent shortage, that script needs flipping. Instead of creating hierarchies based on what “we” want, we should be building the type of teams and workplace excellence that the future demands. In other words, what young professionals need to be successful. 

Of course, the value in our leadership is that we can guide young people away from ideas that didn’t work based on our experience and executive acumen. But, remember how outlandish some of the dot.com perks seemed in the late 1990s and early 2000s, like wearing whatever clothes you wanted to work, bringing your dog to the office, or even massages, yoga or chef-catered lunches onsite? The people reacting against those ideas were usually older and more conservative thinkers. Yet, today, we see those perks as the first steps toward workplace wellness initiatives and comprehensive wellbeing programs. 

To paraphrase an old saying: “the kids are going to be alright.” What they want is within our reach and, more importantly, in our hands to lead. As C-Suite executives, if we purposely block progress, we will miss an opportune moment to create the kind of change that our future employees and consumers are telling us they want. In fact, they are demanding it and turning their backs on us when we ignore them. 

Young professionals are pointing to the future: one that can benefit them, but also other employees outside their cohort who see culture change as a central facet of their work lives. They want to work for companies that share their values. They demand that employers provide a safe and inclusive work environment. If they perceive an organization is not authentically committed to creating a diverse and equitable environment, they will be more apt to leave for a competitor. 

The workplace of the future will center on people engaging with others who are not necessarily like them in any way, EXCEPT that they all feel safe, treated fairly, heard and respected. If the timetable for success in changing your culture is just over six years, then you should feel the timer counting down today. This view of the future isn’t just some conceptual point in time, it’s how you create a culture-centric organization that drives workplace excellence right now that will enable you to get there…Or not.

About the Author 

Donald Thompson founded The Diversity Movement to literally change the world. As CEO, he has guided its work with hundreds of clients and through hundreds of thousands of data touch points. TDM’s global recognition centers on tying DEI initiatives to business objectives. Recognized by Inc., Fast Company and Forbes, he is the author of Underestimated: A CEO’s Unlikely Path to Success, hosts the podcast “High Octane Leadership in an Empathetic World” and has published widely on leadership and the executive mindset. As a leadership and executive coach, Thompson has created a culture-centric ethos for winning in the marketplace by balancing empathy and economics. Follow him on LinkedIn for updates on news, events, and his podcast, or contact him at info@donaldthompson.com for executive coaching, speaking engagements or DEI-related content. 

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