Insureon Blog

3 Blunders that Can Tank Your Small Business Culture

2. May 2016 07:46

bored business people in a conference room

Corporate culture was a buzzword long before the New York Times published an exposé on the alleged nightmarish experience of working for Amazon. It even predates millennials, Silicon Valley, and ping-pong tables in the break room.

But before you dismiss corporate culture as touchy-feely nonsense, think about how important job satisfaction is for employee retention. If you want to build a business that people want to work for, avoid these three blunders that can tank you culture.

Blunder #1: Letting Culture Take Care of Itself

Many entrepreneurs take a hands-off approach to culture, assuming that it will simply grow out of the everyday actions of their employees. For the most part, they’re right. A culture will develop if left unattended. Unfortunately, it might not be the culture they envisioned when they started the business.

“You’re either going to have a culture that has been intentionally built or there will be a culture forming because nothing is being done directly to build it,” says Peter Rosen (@pfrosen), the founder and president of HR Strategies & Solutions. “A culture can be anything, like people showing up late for meetings and it being tolerated. That becomes part of the culture.”

Do you want a business where people collaborate? Have high energy? Put clients first? Those values need to be articulated.

Cultural fit tip: According to Rosen, establishing your company’s values is the cornerstone of building a business culture. However, it’s one thing to create values; it’s another thing to make sure they are integrated into the fabric of the organization.

Reward individuals who exemplify the business's values. You can even incorporate your values into your performance reviews.

Blunder #2: Ignoring Culture When You Hire

Once you’ve established your values, think about them when you’re hiring. “Let’s just take a sense of urgency as a value,” says Rosen. “Somehow in the interview process, you’re going to want to question candidates to determine if they have a sense of urgency.”  

That’s not always easy to do in interviews where candidates often say what they think you want to hear. In some cases, a personality test may help you figure out the best fit for your business. You might also find that the more interviewing practice you get, the more accurate your instincts become.

Cultural fit tip: Hiring for cultural fit does not mean you get to ask questions about the candidate's cultural background. Avoid questions like the ones listed in this Huffington Post article, and consider buying Employment Practices Liability Insurance. It helps cover your defense expenses if an employee or job candidate accuses you of discrimination.

For more information, check out "What Is Employment Practices Liability Insurance (EPLI)?"

Blunder #3: Keeping a Bad Apple

Finding, hiring, and training new employees is huge cost for small-business owners, so it’s little wonder that many hesitate to let an employee go. However, sometimes it’s the right thing to do. (Related reading: "Small-Business Owners: What Happens When You Hire the Wrong Person?")

According to Rosen, the impact of one person in a small business is a lot greater than it is in a large organization. “If they’re not living the values and demonstrating them on a regular basis, it’s going to be pretty obvious to their coworkers,” he notes.

Terminating the relationship lets your other employees know that the culture really matters to you. Your values aren't just a nice poster on the wall; they’re the principles that inform your business decisions.

Culture fit tip: A tight-knit group can be slow to warm up to a new hire. Make sure current employees understand the how the new person fits into the organization, and give everyone a chance to work out the kinks before you assess their cultural fit.

Establishing your business’s culture can help keep employees satisfied and engaged. Unfortunately, that appears difficult to do. Learn more in “Why Small Businesses Shouldn’t Hire 70% of Employees.”

Tags:

EPLI | General | HR | Small Business | Tips for All Small Businesses

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