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Impact of Company Culture
Key Takeaways
- Glassdoor reports that 77% of US adults consider a company's culture before applying for a position within the organization, while 65% state that company culture is "one of the main reasons" they choose to stay with their current employer. Moreover, 71% of American employees report that they will start looking for new work opportunities at other companies if their current employer's culture changes/deteriorates.
- O.C. Tanner found that culture was consistently cited as twice as important as pay (income and benefits) as well as almost three times as important as job security when individuals were asked about the company attributes that would most likely influence their decision to join and stay with an organization for at least five years.
- Jobvite determined that 32% of American adults are willing to take a pay cut of 10% or more to work for a company that is aligned on values and interests.
- 5W Public Relations confirmed that between 60% and 83% of American adults, depending on age, believe it is "important" that the companies they purchase from are aligned in terms of values. Moreover, over half of all Americans state that they will boycott an organization that they previously purchased from if the company takes a stance on an issue that is contrary to their personal beliefs.
Introduction
The research team has curated a set of nine reports that offer quantitative data points that demonstrate the impact of company culture on worker retention and customer lifetime value (LTV) in the United States. These research studies, surveys and the like have been organized by sub-topic (employee retention: overall, employee retention: pay, customer lifetime value) for ease of review. As stated during the initial phase of research, current statistics on the topic of interest were limited in the public domain owing to the highly specific subject matter. As such, the research team included slightly dated (2018/2019) reports to add robustness and corroboration to the delivered findings.
Employee Retention: Overall
O.C. Tanner
- O.C. Tanner published a 2021 Global Culture Study (link here) which provides insight into how company culture and alignment on values impacts employee retention by generation, including in the United States.
- When individuals were asked about the company attributes that would most likely influence their decision to join and stay with an organization for at least five years, culture was consistently highlighted across generations as the most significant factor.
- Moreover, culture was consistently cited as twice as important as pay (income and benefits) as well as almost three times as important as job security.
- The full breakdown of the study's findings by generation is depicted directly below for further generation-specific insights.
Glassdoor
- A slightly dated (2019) Mission & Culture Survey (link here) published by Glassdoor validates these findings from O.C. Tanner by determining that at least two-thirds of American adults consider a company's culture and values when applying for, staying and considering leaving employment.
- In particular 77% of US adults consider a company's culture before applying for a position within the organization, while 65% state that company culture is "one of the main reasons" they choose to stay with their current employer.
- Moreover, 71% of American employees report that they will start looking for new work opportunities at other companies if their current employer's culture changes/deteriorates.
TinyPulse
- Specifically on the point of workers' willingness to depart an organization if its values are no longer aligned, the TinyPulse Employee Retention Report from 2018 (link here) similarly found that American employees are 24% more likely to leave their current company if they rate its culture poorly.
Robert Half
- Meanwhile, Robert Half more generally determined in its 2018 report Organizational Culture: The Make-or-Break Factor in Hiring and Retention (link to summary here) that 35% of American workers would choose to pass on the ideal job opportunity if the associated company's culture and values were not a good fit.
Ernst & Young
- In particular, Ernst & Young stated within its 2021 Gen Z Segmentation Study (link here) that alignment on values and culture is essential for Generation Z.
- Most notably, 63% of this generational cohort report that it is either very or extremely important that their employer share their personal values.
Employee Retention: Pay
Jobvite
- Jobvite's 2018 Job Seeker Nation Study (link here) offers one of the most precise estimates of the financial tradeoff that American employees are willing to make to work for a company that is aligned on values.
- Specifically, the talent acquisition expert's survey found that 32% of American adults are willing to take a pay cut of 10% or more to work for a company that is aligned on values and interests.
- Consistent with the preceding reports, Jobvite also discovered that 15% of US adults have turned down a job offer due to company culture, while almost all (88%) state that culture is "at least of relative importance" in their job decision-making process.
- A similarly timed report by LinkedIn on American Workplace Culture Trends (link here) confirms the relative importance of culture over pay for many Americans, by determining that 65% of US adults would prefer a lower pay rate than working at a company with a poor workplace environment/culture.
Customer Lifetime Value
5W Public Relations
- The 5W PR 2020 Consumer Culture Report (link here) is one of the few credible, recent research studies that quantitatively demonstrates the link between company culture and consumer lifetime value.
- Most notably, the advertising firm confirmed that between 60% and 83% of American adults, depending on age, believe it is "important" that the companies they purchase from are aligned in terms of values.
- Moreover, over half of all Americans state that they will boycott an organization that they previously purchased from if the company takes a stance on an issue that is contrary to their personal beliefs.
- The full breakdown of the study's findings by age is depicted directly below for further generation-specific insights.
Forrester Research
- Slightly dated (2018) reporting by Forrester Research validates the preceding findings from 5W PR by similarly determining that over half (52%) of US adults "actively consider company values" when making a purchase.
- The importance of culture increases among younger generations, with approximately 70% of Millennials stating that they are conscious of company values when purchasing a product from a brand.
Research Strategy
For this research on quantitative data points that demonstrate the impact of company culture on worker retention and customer lifetime value, the research team leveraged the most reputable sources available in the public domain, including O.C. Tanner, Glassdoor and Ernst & Young. As stated during the initial phase of research, current statistics on the topic of interest were limited in the public domain. As such, the research team included slightly dated (2018/2019) reports to add robustness and corroboration to the delivered findings.