Carolyn Nevitte: Study reveals the secret to employee retention

Employee turnover is an ongoing concern for modern organisations. The unemployment rate in the UK is at its lowest level in forty-four years and in the face of Brexit uncertainty, the war for talent could get even more competitive, with companies having to up their ante when it comes to attracting and retaining employees. Businesses large and small are paying special attention to the finer details of their employee experience while considering how to keep their best and brightest from jumping ship.

While extrinsic motivators such as salary increases and hefty bonuses have long been used to attract talent, a recent study has provided evidence of what many of us have known for a long time — while fair pay is certainly important, when it comes to long-term loyalty, what makes a real difference is company values and cultural fit. These are issues that have never been more important. Employees want to build a career with a company whose values align with their own. They want meaning and to be surrounded by people who behave and communicate in similar ways. In many ways, they are looking for a home from home.

The Study and Its Findings

The study, published by Stanford University, explored motivators for employees and the impact of company values — and the role these factors play in retention and motivation. The researchers involved in the study were granted access to the personnel and data of a tech SME — including over five million emails spanning eight years and 440 organisational culture surveys, which described employee perceptions of the company’s values and culture.

By applying complex computational linguistics and machine learning algorithms on more than 29,000 person-month observations over eight years, the researchers came to the following conclusion:

We argue […] that values matter […] for the choice to remain at or voluntarily exit from the organisation.

The study also concluded that “value congruence” (the alignment of an organisation’s values to the employee’s values):

Predicts behaviour […] in particular, a person’s self-identification with the organisation and thus her (voluntary) choice to stay or exit.

In addition to this new data, the research team reviewed a range of prior academic studies and found:

High levels of individual cultural fit are associated with increased productivity, stronger commitment, and less turnover. Moreover, employers have increasingly emphasised screening, selecting, and socialising new hires on the basis of cultural fit rather than exclusively hiring for skills.

Meaning and Value over Money and Perks

So what can we take away from this study? Clearly, it highlights and reaffirms the importance of company values and recruiting for cultural fit. While there are certain hygiene factors you must have in place to stand a chance in the war for talent (including competitive salary, a motivational line manager, fairness and comfortable surroundings), these factors are not enough. It is the company’s values and culture that matters above all else —  and these values need to be assessed at the recruitment stage and intricately woven into every aspect of your business.

We should also remember the importance of company values, culture and reputation when it comes to recruiting employees. Following a struggle with bad press, large organisations such as Uber, JD Sports and Theranos have had to confront the fact that their employer branding matters more than perks on offer — after all, top talent isn’t likely to accept a job with a company who treats its employees poorly, regardless of how many incentives are on the table.

Values are crucial as they give employees — and companies — a “why” when it comes to work. This “why” gives you direction, allowing you to grow, make the right decisions and evolve. When companies have no values, they lack a sense of identity. They don’t know who they are or what they stand for. These aren’t the strong, enduring organisations that cautious Gen Zers are looking for — they are searching for a company that is reliable and sure of itself.

How to Bring Company Values to Life

When you decide to renew your dedication to your company’s values, how do you begin to highlight them and interweave them into your company’s processes? How can you make them real and visible to your employees — both existing and prospective?

The first step — if you haven’t already taken it — is to consider what your values are. What do you want your company to be and how do you want others to see you?

Once you have your values, you need to give them pride of place. Put them front and centre and make them visible.  Yes they should they be clear on your company’s website and in the employee handbook, on the walls and annual reports, but the highest priority should be for leaders to exemplify and communicate the values on a daily basis. This should be through their own behaviour, words and actions.

Crucially, values need to be kept in mind when recruiting, designing objectives and interacting with customers or clients. Take the time to think up new and creative ways to demonstrate your values. If flexibility is one of them, let your employees have more freedom in goal-setting. Let them decide how or where they work — within parameters.  If one of your values is about giving back to the community, you might want to find ways to support your employees to volunteer.

On top of this, you need to remember to reward and appreciate employees who are promoting your values. If your employees are demonstrating behaviours that are in line with your values, publically make mention of it. This will not only improve morale, but it will also encourage other employees to do the same.

How to Hire for Cultural Fit

One of the key lessons to take away from the study is that everyone should align in terms of values. This all starts with recruitment, which means you need to hire based on values and cultural fit.

Companies should focus on creating a list of questions that are designed to assess and determine a candidate’s character, values — and how they fit in with the company. For example, if “creativity” is one of your company values, it is certainly worth coming up with questions that explore an employee’s ability to “think outside the box” and come up with innovative solutions to pressing problems. These questions can be based on past experience and hypothetical scenarios.

Open-ended questions can also be very telling during the interview stage. Consider asking questions similar to the following:

  • What do you value at work? (this will also reveal if they have done their research into your company)
  • What motivates you most about work?
  • What drives you to succeed?
  • What do you like about working as part of a team?


When it comes to assessing cultural fit, you might have to veer away from convention. To truly get to know your employees, you might want to steer clear of a formal conference room. You might want to take your candidates out into a more informal setting, such as a cafe, where they can relax slightly and you can gain a real insight into their character. With any luck, this approach will result in a happy, engaged employee who will want to stick with your organisation for the long haul.


Carolyn Nevitte is HR Director at People Insight, a company that helps organisations measure and improve the employee experience through employee surveys, 360-degree feedback and expert consulting.