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Competencies Employee Engagement

Why Culture (And Competencies) Are HR Essentials

By Kelly Craig on January, 14 2016
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Kelly Craig

New research on job seekers’ top priorities reveals that workplace culture is far more powerful in attracting talent than many organizations suspected. 

But what does a distinct and thriving culture look like? And how do competencies help to define and communicate organizational culture in ways that resonate with employees?

The rise of organizational culture as the star attraction for job seekers is clear in the 2015 State of Inbound report that was recently released by Hubspot.

Based on research collected from 4,000 marketers and salespeople worldwide, the report identified the biggest priorities for today’s job seekers, and the results included some unexpected talent trends.

Perhaps the most surprising finding was that culture was the number-one consideration for North Americans looking at a job in a new company. Tied for first place with “opportunities for growth,” culture far exceeded employee perks such as tuition and childcare, and even outranked compensation as a key decision point.

Looking beyond the North American job market, culture was ranked globally as one of the top three considerations, along with opportunities for growth and “work-life balance.”

Your culture is your product

Clearly, culture should be a focus for organizations that want to attract more people. According to The Talent Board, a research group that studies the job candidate experience, 41 percent of candidates actively research the company’s culture before applying.

Dharmesh Shah, Founder and CTO at HubSpot, described the crucial relationship between culture and recruiting this way: “Product is to marketing as culture is to recruiting.” After spending years protecting HubSpot’s unique culture as it morphed from a tiny start-up to a 450-employee organization, Shah sees culture as a product, with potential buyers being the talented, in-demand workers who are choosing between many employment options before taking the plunge. If the organization doesn’t have a great product—and if they don’t do a good job of promoting that product—they’ll struggle to find talent. Being able to lure talented workers with great culture keeps the pipeline filled.

But it’s also essential in attracting the right talent. A strong, well-defined organizational culture enables organizations to do a better job of choosing candidates who are the right fit, and it also helps job seekers “self-select” by making more informed choices about the jobs they choose to pursue. The potential pay-off for minimizing these culture mismatches is huge: according to a statistic cited in Forbes, 89% of hiring failures are due to a poor cultural fit. With the total costs associated with turnover ranging from 90% to 200% of the employee’s annual salary, this is an issue that no organization can afford to ignore.

Culture is hard to define

So what is organizational culture? For something so integral to the ongoing challenge of attracting and retaining talent, it’s a poorly defined concept. Culture, in a business context, has been defined as everything from “a manifest pattern of behavior” to “what happens when nobody is looking” to “the way we do things around here.”

For some companies, a foosball table and a fridge full of Red Bull in the staff room are integral to company culture. For others, it’s about a commitment to balanced lives, such as on-site daycare and extended parental leave. Still others cite a company’s pro bono or charitable work as a key component of what the organization stands for. Culture encompasses the way the organization sees itself, treats its employees, and interacts with the wider world. It’s created from the top down, in the sense that company founders or executives usually set the initial tone, priorities, and direction of the organization, but it’s also created from the bottom up, as each employee internalizes and interprets these behavioral rules and uses them to guide their job performance.

The competency/culture link

While culture evolves organically, it can also be nurtured. And the organization’s human resources are integral to that mission. As Shah puts it, “The best companies are deliberate about culture. They design it and defend it.”

For Shah, corporate culture is “a set of shared beliefs, values, and practices.” The idea of culture being tied up with “practices” or “behaviors” is widespread, and it reveals a vital link between culture and competencies. Whether they’re defined as “practices” or “behaviors,” these culture-preserving elements align with an organization’s core competencies.

Unlike statements of belief or values, which can be hard to communicate, competencies translate an organization’s cultural touchstones into concrete, day-to-day workplace behaviors. These behaviors then reinforce culture by helping everyone in the organization understand how it relates to their performance on an individual level. By including core competencies in every job profile, the organization’s culture is codified into a clear set of guidelines for on-the-job behavior.

For example, a company’s culture might revolve around “putting the customer first.” It’s an admirable goal, and one that has helped companies such as Zappos and Amazon transform the customer experience and raise the bar for an entire industry. But what does it look like at the job level? How do individuals within the company know how to embody that value from nine to five on a daily basis?

Competencies are an ideal tool for translating these big-picture concepts into job-level definitions that take the guesswork out of the equation for employees. In the case of a customer-first culture, HRSG’s “client focus” competency is articulated at five levels of increasing proficiency and described through 17 behavioral indicators that provide additional context and detail. This enables employees at any level to understand and model culture-supportive behaviors in ways that are appropriate to their position.

Closing the culture gap

Research indicates that the culture gap is widening, as workers prioritize culture and companies scramble to define and support it. While workers are increasingly placing culture at the top of the list, Deloitte’s 2015 Global Human Capital Trends survey reported that culture is the number-one challenge for companies worldwide.

The reality is that fostering a healthy, thriving culture isn’t easy. But ensuring that culture can be expressed at the level of day-to-day workplace performance—for every employee—is an important part of closing the culture gap and supporting a culture that attracts top talent.

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