SHRM Report Underscores Global Importance of Workplace Culture

SHRM Report Underscores Global Importance of Workplace Culture

Workplace culture remains vital for organizational success. Regardless of the country where they live, employees who rate their workplace culture highly are more satisfied at work and more committed to their organization, according to a new SHRM report: “The State of Global Workplace Culture in 2023.”

In fact, employees who rate their organization’s culture as “good” or “excellent” versus “poor” or “terrible” are 790% more likely to feel satisfied at work and are 83% less likely to be actively looking for a new job.^[1]

“Workplace culture has never been more important than it is now, and I find it to remain true for the foreseeable future,” said Andrew Adeniyi, founder and CEO of AAA Solutions, an inclusion, equity and diversity consulting firm in the greater Indianapolis area.

In 2023, SHRM broadened the annual study’s scope and depth by surveying over 11,000 employees from 15 countries. This expansion allowed SHRM to obtain a more comprehensive global perspective and gain deeper insights into workplace cultures worldwide, explained Ragan Decker, Ph.D., SHRM-CP, lead researcher at SHRM.

Despite the evolution in the study’s methodology, the core findings paralleled those of last year’s report. One key trend was the enduring resilience of positive workplace culture perceptions.

“This positivity persists even in the face of the political and economic turbulence experienced in both 2022 and 2023,” Decker said. “What’s more, irrespective of the country where employees reside, SHRM research over the past two years affirms the numerous benefits of fostering and sustaining a positive workplace culture for both employees and the business bottom line.”

While feelings of positivity emerged as the key trend, it’s important to note that the results are a snapshot in time and may not be universally true for all workplaces.

“It very much depends on the organization,” said Sarah Harvey, founder of Savvy Conversations, a Chichester, England-based consulting firm focused on helping organizations build culture. “I know of some organizations where workplace culture is viewed very positively, and employee satisfaction is higher than it has been in recent history. On the flip side, some organizations who have been working hard at achieving positive engagement scores and pride themselves in focusing on creating a positive workplace culture have seen dips in employee engagement despite their concerted efforts.”

5 Dimensions Influence Workplace Culture Perceptions

Respondents were presented with more than 50 employer practices. SHRM Research then examined which practices were consistently associated with positive workplace culture perceptions and how those practices could be grouped to create actionable areas for employers.

“We found that five key dimensions influence employees’ workplace culture perceptions regardless of the country where they work,” Decker said. “These dimensions are summarized in SHRM’s Global Workplace Culture Model.”

This model offers a concrete framework for organizations worldwide that seek to position themselves as sought-after employers, and it highlights critical areas of focus for organizations seeking to improve their workplace culture.

Equitable Leadership Practices are by far the most influential dimension in the Global Workplace Culture Model. This is the foundation on which all change efforts should be built and the one employers will likely see the biggest payoff from addressing.

“The investment in enabling the leaders to understand, internalize and apply those concepts is key,” said Silvio Trindade, a Sao Paulo-based human resources director at DocuSign-Latin America. “It is important because it aligns with the majority of the company’s philosophy/values and because the profile of the workforce has changed. It is a game changer when it comes to attracting, developing and retaining talent.”

Kerri Nelson, Ph.D., director of policy and partnership research at SHRM, noted that this principle is not a recent revelation. “As far back as 2018, SHRM Research revealed that 88 percent of U.S. workers considered fairness to be of very or extremely high importance in the workplace.[2] What’s more, recent SHRM research has shed light on an interesting shift in worker expectations. Forty-five percent of individual contributors say they have higher expectations for their organizational leaders now as compared to seven years ago.[3] These findings collectively highlight the enduring desire for equity among workers while underlining the changing landscape of leaders’ roles in fostering equity in the workplace.”

Additionally, career fulfillment—doing work that feels meaningful, having a job one feels proud of and having opportunities to grow—is the most important predictor of employee commitment. Employees who rate their career fulfillment highly are four times more likely to be committed to their organization than those who do not and are 12 times more likely to feel satisfied at work than those who do not.

For employers that cannot afford to “buy their way out” of a talent shortage, ensuring that employees have a meaningful career is the best alternative. Harvey suggested offering coaching and mentoring to encourage personal growth, engaging in corporate social responsibility initiatives and creating an inclusive workplace environment as strategies that can support employee feelings that they are “doing valuable work.”

“Don’t underestimate the value of providing regular feedback and recognition,” she added.

The Top 10 Drivers of a Positive Workplace Culture

The top 10 drivers of a positive workplace culture belong to the Equitable Leadership Practices, Career Fulfillment and Good Manager Communication dimensions. Employers can identify their areas of weakness on these 10 features to determine which actions to target first.

Top 10 drivers of positive workplace culture:^[4]

1. Transparent communication from leadership.
2. Fair performance evaluations.
3. Employees’ pride in their work.
4. Active solicitation of employee feedback by the organization.
5. Employee can trust what the manager says.
6. Appreciation of employees’ unique backgrounds, perspectives and experiences.
7. Ability to make a complaint about a leader without punishment.
8. A meaningful career.
9. Manager seeks employee input before making decisions.
10. Opportunities for career growth.

Room for Improvement

Respectful Workplace Interactions are a common challenge, with only 50 percent of workers in all countries rating their employer highly on this dimension. HR needs to be leading vocally on this front, Trindade emphasized.

This is achieved through communication, according to Adeniyi, who believes that respectful interactions are no longer guided by the Golden Rule (“Treat others as you want to be treated”), but instead by the “Platinum Rule.”

“It’s about treating people how they want to be treated, which may be different than how I want to be treated,” he explained.

Employees worldwide struggle to balance work and personal commitments. Globally, only 32 percent of employees experience high Work/Life Integration.

“The companies, and those who represent the ‘entity,’ need to understand that it is OK for employees to leave at a certain point,” Trindade said. “It’s OK to assume that as human beings, the talents have their cycles in the work environment that may vary from company to company, depending on the industry dynamic. The employee’s life cycle doesn’t overlap the human being’s life cycle in our journey by continuously looking for improvements, whatever it means to all of us.”

Top Reasons Employees Leave Globally

Top five reasons why employees worldwide plan to leave their employer (% of responses):

·       Inadequate pay (58%)

·       Insufficient career growth opportunities (36%)

·       Poor management (29% tie)

·       Insufficient learning and professional development opportunities (29% tie)

·       Unfair treatment (28%)

Multiple Factors Influence Employees’ Decisions

It is important to note that this survey reflects the moment in time it was completed, and that it’s possible that national economic conditions may have somewhat colored employees’ subjective perceptions of the workplace.

“It is important to reiterate that employees’ decision to stay with their organization or look elsewhere is complicated,” Nelson said. “Both workplace culture and financial factors play pivotal roles in this decision-making process.”

Nelson added, “That being said, SHRM’s research shows that four of the top five reasons employees leave their employer globally are tied to workplace culture. For that reason, it’s unlikely higher pay alone can make up for the damage caused by a poor work environment. Employers that invest in fostering and maintaining a positive workplace culture can differentiate themselves in a cost-effective way that yields a high return on investment.”

Katie Navarra is a freelance writer based in New York state.

[1] Based on relative risk ratios obtained from predicted probabilities of binary logistic regression models on each outcome while controlling for social desirability and acquiescence (weighted by country size). Predicted probabilities were obtained at average levels of social desirability and acquiescence.

[2] Citation: November Omnibus, SHRM Research, 2018.

[3] The Changing Face of Leadership, People + Strategy Summer 2023 Issue, SHRM, 2023.

[4] Based on a Shapley regression weighted by country using Lindeman, Merenda and Gold (LMG) indices on organizational culture perceptions as predicted by all items of the Five-Dimension Model of Cross-Cultural Organizational Culture.