by Karla Cloete
So, what is cultural fit anyway?
Cultural fit is the workplace’s personality. It includes the company’s mission within society, along with its strengths, and challenges. A workplace’s culture can be defined by its values, attitudes and mindsets. Work ethic, communication and leadership styles all fall under this definition.
Everything from larger forces such as the staff-management interactions to small things like banter in the office are all crucial parts of the culture, down to the founder's beliefs and how they play out in the boardroom. According to Forbes, culture is a manifestation of the relationship between you and your employer, among other things. The hiring process is usually the first taste of the company's culture.
Cultural fit is another name for the old idea of person-fit. Person-environment fit theory was first postulated by Jacquelynne Eccles and her colleagues in the 1980s. This ecological model considers how the characteristics of an individual interact with the characteristics of their environment, and how they affect each other in turn. Furthermore, the theory states that this fit will shape a worker's motivation, workplace behaviour and mental health.
Person-fit ensures congruent values, while poor fit creates maladaptation.
Why does cultural fit matter?
The importance of cultural fit is as multifaceted as the concept itself.
Firstly, it’s something employees value.
A survey of 5000 adults across Europe and America by Glassdoor found that 56% of workers ranked their company’s culture higher than salary. Half of UK employees (45+) in the UK put culture first, while 65% of US millennials rated culture higher than income.
According to The Multi-Generational Job Search Study 2014, 43% of potential employees defined ‘cultural fit’ as the single highest determining factor in choosing a new job.
Furthermore, a strong and healthy company culture increases productivity instead of draining it. Low morale leads to a massive loss of productivity and less customer-focused behaviour, according to the US Department of Labour.
Not to mention that teams who share values spend more time being on the same page, which means more collaboration and better communication.
“Hiring for mission and value alignment is arguably the most important piece of the puzzle to get right,” said Greg Besner, founder of CultureIQ. “If someone isn’t inspired by your mission or on board with your values, then the employee won’t feel as incentivized to contribute. Further, other employees will know if a new colleague isn’t getting the culture or doesn’t care, and this can tear your company apart.”
Culture determines the health and functioning of a workplace. Cultural fit at the managerial level is essential as discontent and negative practices can trickle down into the whole team and create a very unpleasant workplace.
Secondly, it’s a cornerstone for employers who not only want to keep their employees but also want to keep them happy.
Hiring for cultural fit ensures your employees aren’t just satisfied but thriving and performing at their best. It also keeps those loyal employees for the long term and decreases turnover rates.
Replacing an employee is expensive: between recruiting, onboarding and training the costs can quickly pile up. According to The Huffington Post the loss of an employee can cost a business 1,5-2x their annual salary. The cost per hire can be about $4000 and is almost a month-long process. In short: poor cultural fit is costly.
It also helps to attract new talent and can be one of the cornerstones of your hiring strategy. When hunting for top talent, your company's culture can either be a major selling point or a big fat red flag.
While many employees consider company culture in their job search, many companies also judge applicants on how they fit into their culture.
For example here at Atara, we look for team members who are passionate, authentic and accountable.
Hires make and break companies. So does the culture. Which is why we consider it in our executive search process.
How to approach it:
First, for a good culture you need to make good hires. CEO Jay Wilkinson shares this chart in his TEDx Talk:
His approach weighs both potential performances against potential cultural fit when considering a new hire.
Cultural fit is just one lens we can use to look at an employee. As per Sarag Benstead from BreatheHR:
But company culture needs to stretch beyond the hiring process.
“After an employee is hired, consider the rest of the employee life cycle … and look for ways to embed the company’s values throughout the employee life cycle,” said Besner. “Every policy, process, and program is an opportunity to reiterate the mission and values.”
Managers should be trained to represent the values and instil them into the daily experience.
A company’s values and missions need to permeate through every aspect of business: from the boardroom to the breakroom, employees should feel the alignment in everything management does.
According to Joe Marino from Hueman: “ Millennials , in particular, look to leadership to set the cultural tone, so executives and managers must present a unified front when implementing cultural standards.”
Good hires and good management. The case for cultural fit is that simple, and that complicated.
Atara Partners are leading the way in tailormade executive search, bringing you that much closer to making your next great executive hire. Find out more about how we can help your business grow here.