Hiring and retaining top new talent are crucial aspects of any successful business. When you keep your talented employees happy and engaged, it helps keep your workforce steady and lowers the costs of finding and training new hires. Nowadays, there’s so much competition for skilled workers that it’s essential to invest in both employee retention and talent acquisition if you want your business to stay ahead of the game.
Talent acquisition is expensive, as are the costs of losing internal talent due to high employee turnover. There are many factors to consider with both employee retention and talent acquisition. Still, I believe that culture is a crucial factor to take into consideration, and one that is too often overlooked. In this blog, we are going to explore the relationship between talent acquisition, employee retention and how culture can play a role in improving both aspects of a business.
The relationship between employee retention and talent acquisition
While acquisition focuses on attracting new talent, retention focuses on keeping existing talent. However, the two are closely related, as an organisation that fails to retain its top talent will need to invest more in acquisition efforts to fill the resulting gaps. On the other hand, a company that prioritises retention can reduce turnover costs, preserve internal knowledge and experience, and improve employee morale and engagement, making it more attractive to new talent. Therefore, an effective talent management strategy should focus on both retention and acquisition to create a cohesive, high-performing team that is both productive and engaged.
The impact of organisational culture on employee retention and talent acquisition
To keep costs down, retaining talent is essential, and one of the best ways to do this without investing in expensive benefits and well-being packages is to ensure cultural fit throughout the organisation. If your employees feel valued and aligned with the culture they work in, they’re more likely to stick with you and be more productive, in fact, a study from Deloitte suggests that strong cultures have a 40% higher employee retention rate than those with weaker cultures.
Building a strong culture that drives engagement will build morale, productivity and commitment, leading to greater internal capabilities as people are working towards an aligned purpose. A notable example of this is Patagonia, a company built around its culture, values and purpose, which as a result, has achieved impressive employee retention rates.
On the other hand, employer branding is all about proving why someone would want to join the organisation and the best way to do that is to be transparent with your culture – data from Glassdoor suggests that 77% of adults consider culture before applying for a job and 56% of employees value culture over salary. Make people want to join your organisation because their values and strengths align with your culture, take Patagonia again, their entire brand is based on this purpose and that’s why so many people want to work there.
Not only does this make organisations more attractive, but it also helps employees make a more informed decision about the company (culture) they want to work in. Ultimately often leading to higher retention due to greater cultural alignment/fit – saving time, money and effort by avoiding expensive hiring processes that lead to high turnover because the culture fit was off.
Creating and maintaining a positive organisational culture for retention and acquisition
In order to portray a positive culture externally (to attract new top talent to your organisation) you must first develop and embed it internally (also helping employee retention). This starts at the top.
Leaders set the vision and direction of an organisation, that’s why they’re the leaders, right? Therefore, they are the ones who are best placed to set the culture that is most closely aligned with strategy and optimal for supporting it. Leaders must decide on what this looks like, communicate why these decisions have been made and embody it in every area of their work.
Once the target is set, it is vital to understand the starting point – by doing so, you’re able to see the gaps across the organisation and work towards alignment. At Culture15, we look at the culture at the behavioural level as we believe understanding behaviours and norms are the key to understanding how work gets done within an organisation, which ultimately is the culture.
Once you understand the underlying behaviours, they can be aggregated up to form company values, like Collaboration or Innovation, which are the key capabilities used to describe your culture at a higher level. By aligning actions/behaviours with values like these, you’re able to articulate your culture throughout your organisation, as well as publicly, whilst maintaining the granular measurement that drives the internal cultural alignment.
Therefore, it is essential to build a clear picture of your culture internally and work towards alignment to keep top talent, then use it to build your employer brand externally to attract new talent.
In conclusion, employee retention and talent acquisition are two vital concepts for every successful business – they can be expensive and time-consuming and have significant implications for any organisation. There are many factors to consider with both, but cultural fit plays a key role. By driving a strong culture internally, you can build a more aligned and productive workforce, making it a place that people want to work in, leading to greater internal capabilities and improved retention rates. By doing this, you improve your employer brand and make your organisational culture more attractive externally. Attracting top talent and allowing for more informed decisions to reduce costs made from mistakenly hiring the wrong people.
Ultimately though, this must begin with the culture internally. You must first fully understand what your culture looks like and how this compares to your desired culture. If you’re reading this and want to learn more about measuring your current culture vs. the culture you wish you had to attract new talent, book a call with us today, it’s what we do.
Culture15 is your complete toolkit for tracking culture change. CEOs and Exec Teams at world-leading organisations use Culture15 analytics to ensure success by aligning their culture with what they need to execute their strategy. If you’d like to find out how to define the culture and values you need, diagnose the culture you have and close the gap, talk to our team.