SHRM Report: Workplace Culture Fosters Employee Retention Worldwide

Despite variations in how workers rate their organizational cultures globally, workplace culture remains critically linked to motivation. 83% of those who rate their workplace culture as good or excellent are motivated to produce high-quality work as compared to 45% of those in poor or terrible cultures. 

SHRM’s latest report, The State of Global Workplace Culture in 2024, explains the profound impact of workplace culture and the underlying forces behind employee retention. As key stakeholders driving organizational culture, HR leaders play a critical role in supporting a thriving culture.

“Workplace culture isn’t just a buzzword; it’s a critical business asset,” said Ragan Decker, Ph.D., manager of Executive Network/SHRM Business research at SHRM. “Organizations that invest in building cultures that are open, empathetic, civil, honest, fair, and focused on meaningful work gain tangible benefits, including increased employee loyalty.” 

In a global society, HR leaders must understand what it takes to create a workplace culture that drives loyalty and success on a global scale. SHRM’s report identifies five elements that are universally linked to positive cultures in organizations.

Five Elements of Positive Workplace Culture

1. Honest and Unbiased Management 

Management is honest with employees and addresses bad behavior within the team. Additionally, managers lead by example, and employees feel safe providing feedback about management without fear of retaliation.

2. Civil Behavior

All employees are treated fairly, regardless of gender, race, age, religion, or other personal characteristics, with no negative comments about identity or inconsiderate treatment from co-workers or managers.

3. Meaningful Work and Opportunities

Employees understand how to advance their careers within the organization, have opportunities for growth, and feel their careers are meaningful. 

4. Open Communication

Employees feel comfortable engaging in candid and honest conversations about work topics with both colleagues and managers.

5. Empathy

Empathetic managers are viewed as better supervisors, and empathetic employees are seen as better performers.

Once you understand the five elements, you can see how they play out in the key findings from SHRM’s research.

Celebrating the Power of a Positive Culture

A positive organizational culture is a competitive advantage. When employees feel that their company values them, respects them, and provides them with meaningful work, the results are clear: higher loyalty, better productivity, and lower turnover. 

Workers in positive organizational cultures are almost four times more likely to stay with their current employer, according to the latest SHRM report. Among employees rating their organization’s culture as good or excellent, just 15% say they are actively (or will soon be) looking for a new job. On the flip side, a toxic culture can lead to significant disruptions: 57% of those who rate their organizational culture poorly say they are actively or soon will be looking for another job, a statistic that should make HR leaders sit up and take notice.

For workers who rate their organizational culture highly, they are often strong promoters of their company. Over 8 in 10 employees at organizations with a positive culture say they’re likely to recommend their organization to people looking for a job. Conversely, for employees at organizations with unfavorable cultures, only 4% say they are likely to recommend their organization to people looking for a job.

Revealing the Human Cost of Toxic Work Culture

Among employees working in poor or terrible cultures, the top reasons cited for leaving a job are:  

• poor manager (54%)
• unfair treatment (54%)
• inadequate pay (54%)
• lack of empathetic leadership (47%) 
• insufficient regard for employee well-being (47%)

“This serves as a reminder of the high cost of neglecting workplace culture," said Decker. "Employee turnover is expensive, both in terms of recruitment costs and the lost knowledge when people leave. Aside from pay, the reasons employees cite for leaving poor workplace cultures can be addressed through intentional investments in building a better culture.”

On a Global Scale: Exploring Differences in Perception of Workplace Culture Among Countries

Globally, workplace cultures stand out as positive. When asked to rate their organization’s culture, 56% of workers responded that their culture was good or excellent, and 26% rated it as slightly good. On the opposite end, 10% responded with a slightly poor assessment, and 8% considered their workplace culture poor or terrible. 

The differences in perceptions of workplace culture are also pronounced. For instance, workplace culture perceptions are more positive in India, the United Arab Emirates (UAE), Egypt, and Saudi Arabia, and less positive in Japan, France, and South Korea. 

When digging deeper to understand what differentiates workplace cultures in better-performing countries from those in worse-performing countries, it was discovered that over three-fourths of workers in India and Egypt have been able to establish meaningful careers working at their organizations. This contrasts with only about one-third of workers in Germany (35%) and Japan (32%) who’ve been able to establish meaningful careers—an important factor in driving positive workplace culture.

From Executive to Individual Contributor: Exploring Differences in Perception of Workplace

When examining organizational culture ratings across job levels, we see significant gaps between lower-level and more senior-level employees. Executives (82%) are significantly more likely to rate their culture as good or excellent than individual contributors (47%). This gap is greatest in China and Egypt while lowest in India and the UAE.

Cultivating a Positive Culture for Sustainable Growth

HR leaders’ role in shaping workplace culture is more crucial than ever. By focusing on the five key elements—honesty in management, civil behavior, meaningful work, open communication, and empathy—you can build a culture that not only attracts top talent but also retains it. 

At the same time, HR leaders must be mindful of the financial and human costs of a toxic culture. By staying vigilant about toxic workplace behavior, you can create a workplace where employees feel safe and engaged, contributing to the success of the organization.