Poor company culture is costing the UK economy £23.6 billion per year

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breatheHR launches The Culture Economy report revealing a third of Brits (34 per cent) who quit their job, did so because of company culture

breatheHR, HR software provider for SMEs, reveals the cost of bad company culture: a staggering £23.6 billion per year. The report, The Culture Economy, found a third of British employees quit their jobs due to bad workplace culture (34 per cent).

Despite this, breatheHR found over half of SME leaders (60 per cent) consider company culture as a ‘nice to have’ in their business.

This mindset has far-reaching knock-on effects. According to the Chartered Management Institute, effective leadership could improve Britain’s productivity by 23 per cent. However, with over half (53 per cent) of employees – surveyed by breatheHR – who distrust their senior management, thinking their bosses ‘didn’t appear to know what they were doing’, there is some work to be done.

In addition, the survey revealed three-quarters (75 per cent) of time-strapped SME decision makers are satisfied with their business productivity and one in five (22 per cent) don’t measure business productivity at all.

Jonathan Richards, CEO and founder, at breatheHR comments:

“Culture isn’t a soft option. It has a clear impact not just on business success, but on the economy and our society. This includes productivity, an area many SMEs struggle with and don’t have the time to dedicate to it. However, one way to boost productivity levels is improving management quality and giving employees autonomy and purpose, as our report reveals. All of which validates the fact that businesses are now operating in a culture economy, and small businesses who fail to realise this won’t last long.”

Other key findings:

  • Wider impacts of a positive work culture – SME decision makers stated positive culture led to: improved morale and relationships (50 per cent); employees going the extra mile (44 per cent); better customer service and satisfaction (43 per cent); improved individual performance and productivity (43 per cent) and reduced employee turnover (35 per cent)
  • Trust in business leaders – a fifth of workers (20 per cent) don’t trust their senior management. Of these, the main reasons for distrust was because: they don’t feel supported by them (59 per cent); they don’t appear to know what they’re doing (53 per cent); they’re not transparent (45 per cent), they play too much office politics (41 per cent) and are self-centred (41 per cent)
  • Generational differences – interestingly, the highest levels of trust in leaders and management were amongst young people 18-34-year olds (63 per cent) and the lowest was among 35-54-year olds (56 per cent)
  • Engaged and focused Brits – three-quarters (76 per cent) of the UK workforce are engaged and focused at work, compared to 8 per cent who admit they aren’t

Patrick Woodman, head of research for the Chartered Management Institute, said: “As this timely report shows, a strong, inclusive company culture is essential for long-term business performance. The tone is set from the top, so management and leadership play a crucial role and creating the conditions for workers to thrive. In particular, transparency and communication are vital for building trust and engendering a sense of purpose among staff.

“The top three things every manager should start to do are share their thinking with their team, admit to their mistakes and uphold their company values. Employers must also recognise the pivotal role played by managers at the heart of their organisations, and support and develop them to succeed.”

Richards continues:

“Our results also uncover a trust epidemic happening across UK businesses. Again, this is fuelled by poor workplace cultures plaguing SMEs, resulting in them losing their top talent. Although there are many small businesses with fantastic and inspiring cultures, over half of them still don’t value its importance – this is largely due to time constraints. As such, we’ve alleviated some of the work by creating a culture plan and recommendations to follow. It’s time for those business owners to sit up and pay attention. After all, it makes business sense to do so.”

The full Culture Economy report is available here.

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2 Comments - Write a Comment

  1. Culture of an organisation has always been a vital part of emotional wellbeing of the staff resulting in positive or negative effects on productivity and health issues.
    In their initial Organisational Risk Assessment the HSE included it but removed it from their Risk Assessment early in the 21st Century because “it was too difficult to measure”.
    Obviously BreatheHR managed very well and have clearly shown the importance of Culture.

    In our Organisational Risk Assessment we measure Culture, Resilience and other important factors as well as the 6 Management Standards approach for both Micro and Macro companies
    http://www.annmccracken.co.uk/stress-and-wellbeing-risk-assessment/

  2. Superb article – lots of worrying yet very plausible facts / stats – should not surprise us – a message to managers and leaders – do not take the “Kings shilling” if to follow the metaphor you get ill at sea or worse you make the whole ship ill. Rebecca you shine a bright light into a dark corner of leadership & management – a major selection & development opportunity folk think does not matter – here you show this major error.

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