Correlation Between Culture, Turnover, and First-Line Supervisors

Instead of wondering how to make employee retention goals and tools fit into your current corporate culture, consider making a fundamental change to your culture with the consistent belief, executive buy-in, and full organizational engagement in employee retention as one, if not the, most important focus of your organization.

February 26, 2024
Richard Finnegan
Articles

During a recent keynote presentation, a woman in the front row asked how much company culture matters regarding whether first-line supervisors can impact turnover and also be held accountable for it.

My off-the-cuff answer was that holding leaders accountable to an important metric establishes the culture, it becomes the culture. This is far different than permitting the so-called culture to determine if training supervisors to conduct Stay Interviews, build plans to keep each individual employee, and then holding those supervisors accountable to a retention goal is the right fit.

Culture Can Be a Fuzzy Metric

True confession, I’ve never liked getting involved in discussions about corporate culture because it’s a fuzzy term with no agreed-upon definition and zero spot-on metrics. Every company wants a good one, whatever a good one is. And there is general belief that companies that create good cultures do everything better.

And what do we want our cultures to be? Harvard Business Review published a study where organizations prioritized their own cultural descriptions by selecting from nine alternatives. The overwhelming choices were (1) results and goal achievement named by 89% percent of participating companies, and (2) a caring, warm, and collaborative culture chosen by 63%. The remaining culture descriptions such as learning, safety, and authority garnered no more than 15% of organizations’ self-rating votes.^[i] So we have all agreed we want to achieve company goals while playing nice. And I would want to work in that company, too. Now what?

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Further Reading: MIT says “Toxic Culture” driving “The Great Resignation”

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The Popular but Incorrect Belief about Culture

There is a grand-canyon-sized hole in the way corporations execute their cultures…and that hole is at the bottom. It is customary for organizations to hire McKinsey or other gold-standard consulting firms to guide their executives through the culture identification process, then survey and focus-group employees to develop a plan to fill those culture gaps. That plan is then presented to the corporation’s board of directors with upscale graphics, and all ultimately believe the implementation trail from top to bottom is totally within view.

But that execution, along with each projected profit improvement, reaches fruition only if the employees who sell and deliver your services buy in. And their buy-in is 100%-contingent upon the quality of their direct supervisors. Here’s what Gallup has to say about our supervisors’ impact on our carefully articulated corporate cultures:

Companies choose the wrong managers 82% of the time.^[ii]
And those same managers account for 70% of the variance in employee engagement.^[iii]

Gallup goes on to share how these data drive the lack of top-to-bottom culture-building success:

“A major challenge for leaders of large organizations is that there is no common culture — often even in prominent, highly regarded companies. This is true regardless of those organizations’ lofty mission statements that are written to bind all employees toward a common purpose.”^[iv]

Or said more plainly, your culture goes nowhere if your employees…and especially your top performers…don’t buy-in, fully engage, and stay. These top performers need great supervisors, tens on ten-point scales, recalling as I’ve written previously here that top performers do their jobs four times better than the rest. But your top performers are scattered across many supervisors including your best and your worst. How effectively the so-stated corporate culture impacts you as an employee depends on which supervisor you get. Or said another way, whether you draw a long straw or a short straw on your first day of work.

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Further Reading: To Retain Your People, Supervisor Trust Stands Alone

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How to Build an Employee Retention Culture

When meeting with executive teams to establish retention goals, we ask how important is employee retention when compared to other corporate metrics. The answers are usually high but vague like “very important”. We then ask which metrics are more important than retention, and eventually someone will say revenue/sales/service/quality…the usual highest and most-talked-about measurements. We then ask for some specific ways leaders will be held accountable to our just-established retention goals in the same ways they are held accountable to the other most important metrics…with our purpose being that retention goals only matter if supervisors on all levels are held accountable to them.

It’s easy to make the case that employee retention is as important or more important than sales or quality…because America is clearly running out of workers, the pandemic has impacted worker attitudes in that there seem to be fewer excellent ones, and constant hiring is the doom loop for worker quality.

So if I had a new opportunity to respond to that woman’s question about corporate culture, I would say this:

“Instead of wondering if employee retention goals and tools fit into your current corporate culture, go fundamentally change and re-build your culture with a consistent belief that employee retention with associated actions will drive your organization toward one of if not the most important metrics of our times.”

Besides, the above-noted HBR study told us what companies want in their cultures is (1) results and goal achievement and (2) a caring, warm, and collaborative culture. By building an organization where top-performing employees want to stay, everyone wins.

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