Using Culture Change to Attract and Retain Talented Employees

September 27, 2018

Using Culture Change to Attract and Retain Talented Employees

Employee engagement has become a major initiative in organizations attempting to improve their performance. It makes sense: Engaged employees are committed and more likely to volunteer their energy toward organizational goals. How to create this energy is not as clear. We believe the key to engagement is to create a culture that will unleash energy toward organizational goals and improved performance. 

Let’s take the example of the latest entrants to the labor market. There are 60 million millennials in the work force, and they comprise the largest group in our working population. As a group, millennials change jobs more frequently, posing a problem for companies that seek stability in their workforce. This raises the question of what millennials are looking for in an organization. Studies suggest they are looking for an organizational culture that allows them to be appreciated, to be challenged, to have a voice, to engage in work that has purpose and significance, to work in a workplace that feels like “home,” and to feel the flexibility of controlling their work schedule. This may not be a complete list, but it lays the groundwork for the kind of culture needed to attract and retain millennials. And millennials are just one of the populations served by organizations today.

So, how does an organization create a culture that attracts and retains talented employees? We propose two conditions that are essential to culture change. The first is a compelling need for change, and the second is a commitment from top leadership to create the conditions for change. We will address both.

There is a strong consensus among organizational leaders that we live in a brisk, expanding economy and a tight labor market. This presents us with both opportunity and challenge. The opportunity is clear: Organizations need people to fill positions that are being added to meet the demands of growth in their business. The challenge is also clear: organizations are faced with the reality of attracting and retaining employees in a competitive market for talent. It has become a buyers’ market for job seekers, and the cost of recruiting and retaining talented people has gone up. This poses a dilemma for companies that have traditional cultures built on the values and policies that fail to offer job applicants and talented but highly sought-after employees the kind of work environment they desire. We believe any company that seeks job applicants from the available pool of talented job seekers will need to change its culture if it is to have any chance of filling its jobs. And we believe that talented employees will be attracted to companies that have cultures that they want to work in, thus making employee retention a major issue. In sum, an organization’s culture is becoming a competitive advantage for both recruiting and retaining talent.

We have recognized the need for organizations to compete for talent. The challenge for these organizations will be to create a culture that will give them a competitive advantage. This won’t be easy. There are forces in the organization that will fight change and try to protect the status they currently have and the leadership style they prefer, which is likely to be very different from what will be required to change. This resistance will likely be found at all levels of the organization, from leadership to rank-and-file workers.

Changing the organization’s culture requires courageous leadership. It also requires a belief that people basically want their organization to succeed. It requires trust that people will expend the energy needed to perform their jobs and even go beyond what is expected. It requires that respect for workers be demonstrated by acknowledging the importance of their contributions to the organization. A leader who does not have faith, trust, and respect for employees as people will likely fail in any attempt to create an employee-centric culture. 

In a major culture change at a General Motors engine plant in Tonawanda, New York, Plant Manager Donald Rust was able to turn a toxic culture into an employee-centric culture, with great results. Here are some of the lessons learned from this successful culture change:

  • The men and women who make up your workforce are your most valuable asset.
  • If you are looking for continuous improvement from your workforce, try these three rules of engagement: 

1. Exhibit your faith in people

2. Demonstrate your trust in them

3. Show your respect for them

  • Align your organization with a sense of purpose and a plan of action. 
  • Listen, listen, listen--and then take action to remedy problems.
  • If you want culture change, you need to lead by example.
  • Once you initiate a culture change, there is no turning back.
  • Human energy is not directly measurable; it is re-released at the discretion of each individual.
  • Low energy will always be present in a toxic work culture, creating negative performance outcomes.
  • A bully manager will best serve in a management capacity somewhere outside your organization.
  • Wasting human energy is a terrible loss.

In conclusion, if you are hiring or concerned about retaining talented employees, you would benefit from taking a good look at your organizational culture. A culture that addresses the needs and preferences of its employees will have the dual advantage of fulfilling your employment requirements and unleashing the energy needed to perform at a high level.

The Authors: 

Donald L. Rust is the former plant manager of the Tonawanda, NY, engine plant of General Motors. Rust and his management team saved the plant from the brink of closure, and with the cooperation of the workforce, changed the culture of the plant. As a result of this culture change, the plant became the most efficient and productive engine plant in General Motors, setting a world record for the number of quality engines produced in one day.

Alan G. Weinstein is an organizational psychologist with experience as an executive coach to CEOs, a college professor, business consultant, author, and entrepreneur. He was a consultant to the Tonawanda engine plant, witnessing firsthand the toxic culture that existed there before Don Rust became plant manager and the transformation that Rust, and his management team achieved through culture change. 

Rust and Weinstein are co-authors of Unleashing Human Energy Through Culture Change: From a Toxic Culture to a High Performance Organization.