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Company Culture and Its Impact on Your Business’ Bottom Line

Five perils of a negative company culture

Look no further than recent news headlines for examples of poor company culture. From Uber to Wells Fargo, numerous businesses are having their toxic internal environments exposed. What once was a dirty little secret in business is now being addressed openly in news reports and blog confessionals.

If you’re a business owner wondering whether your company culture could stand a little improvement, it is important you understand just how detrimental a negative work environment can be. Your business can be affected in many ways, including whether your company remains profitable or not. Consider the following five perils of negative company culture; you just might be motivated to start making drastic changes around your office.

High Attrition Rates

Businesses with a poor company culture tend to have higher attrition rates. Employees don’t stick around for the long term, thereby not moving up the ladder into management. With a revolving door of hiring and training, business owners are left to pay increased onboarding costs as well as recruitment fees to talent agencies.

Low Employee Morale

Low employee morale is one of the most noticeable side effects of poor company culture. Workers are not excited about coming to work and tend to have reduced social activity in the workplace. Low employee morale tends to be contagious and can spread through multiple departments if not promptly attended to.

Reduced Productivity

Those unhappy employees have a direct impact on productivity. Unhappy employees don’t tend to be go-getters and usually only put in minimal effort. When a company doesn’t make an effort to develop a culture of camaraderie, the results will show in reduced output. Everything from products available for sale to customer service interactions can be influenced.

Higher Employee Benefit Costs

Employee benefit costs can increase substantially when staff knows they work in a less than pleasant atmosphere. Team members will call in sick more often, causing an increase in sick pay benefits. Since other employees must pick up the slack due to a sick employee’s absence, overtime pay is often required.

Reduced Sales Growth

Reduced sales growth is one of the costliest consequences of poor company culture. Unmotivated employees don’t tend to be high achievers when it comes to meeting sales goals or interacting with new clients. This failure to seize sales opportunities can have a snowball effect, with an ongoing decrease in revenue generation.

Improving company culture takes dedication and an understanding of current conditions. You can’t fix your internal business environment if you aren’t in touch with what is happening inside your company. Whether you work with a human resources specialist to improve your company culture or attend workshops and seminars to learn talent tips for your team, it is absolutely imperative you address the situation. Sticking your head in the sand only works for flamingos; it definitely isn’t an option for business owners. Will you be making improvements to your company culture this year?

Company Culture and Its Impact on Your Business’ Bottom Line
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