It’s no secret that tech startup culture has received some negative attention in recent years. Getting a business off the ground and running it day to day takes innovation, effort, and determination; it’s no easy feat to develop a product or service that meets demand, craft a successful business model to maintain your delivery of that product or service, keep up with competitors, and make enough profit to keep the lights on.
It’s understandable that culture building can sometimes fall through the cracks. But failing to establish a positive culture can be damaging to your business leading to higher turnover rates, lower morale, decreased productivity, and—believe it or not—lower profits.
Are you concerned that your startup needs a culture reboot? If so, you’ve come to the right place! Keep reading to learn more about the warning signs of a negative startup culture, why it’s important to improve it, and how to get it done.
Why Culture Is Important to Your Startup
A positive, thriving culture is a must-have for any successful company. In fact, applicant tracking system and recruiting software company Jobvite estimates that 44% of job seekers believe company culture is a very important factor to consider during the application process, and 88% cite company culture as at least relatively important. Need more proof? Take a look at these additional stats provided by Jobvite:
- 15% of job seekers say they’ve rejected an offer because of company culture
- 32% of job seekers say they’re willing to accept a 10% reduction in pay for a better company culture
It’s safe to say that culture is more than a buzzword. But why is culture so important? And why is it an especially crucial element for new and emerging businesses?
For starters, we know that good company culture is an important factor in keeping employees happy. We also know there’s a direct link between culture and productivity. The University of Warwick’s Department of Economics found that happy workers are 12% more productive than the average worker, while unhappy workers are 10% less productive than the average worker. This suggests that a better culture experience leads to happier employees, and happier employees equals better productivity.
Without a positive culture, startups may trend lower on employee happiness and productivity data, leading to low attrition rates, decreased profits, and increased risk of failure. Since new businesses are most at risk in the first five to 10 years of operation, it’s crucial you get ahead and work on building a positive culture early.
Signs of a Negative Startup Culture
Now that you know that culture is an essential factor for success, but how do you know if your business needs a focus on culture— or a full reboot? Believe it or not, it’s not always obvious. Here are three signs of negative company culture that all leaders should watch out for.
High turnover rates are a sign that a company may lack a strong culture. Employees want to feel cared for, valued, and accommodated in their professional lives. The Year of the Employee and the Great Resignation showed us that workers are increasingly unlikely to endure a toxic work environment that has negative effects on their mental health or professional growth; they want jobs that serve their careers and care about their wellbeing.
If your startup is experiencing high turnover, you may want to tackle the issue immediately by examining why your employees are quitting, and examine if culture is part of the problem. It’s a costly issue for any company to have, but it can be devastating to businesses in their infancy.
Overemphasis on Perks
It’s no secret that startups—especially tech startups—often rely on trendy perks as a defining element of their culture: gourmet coffee machines, gaming rooms, nap pods, free snacks, and on-site gyms, just to name a few.
But a company’s perks (no matter how sweet) are not enough to ensure your employees’ happiness at work, and an overreliance on them is a bad sign. Why? If you’re trying to attract and retain employees with only surface-level benefits, your company could be lacking in important areas like professional development, fair compensation, and empathetic leadership.
Lack of a Role in Decision Making
One of the defining characteristics of a startup is the shared nature of responsibility among employees. In contrast to corporate culture, where workers oversee one or two primary tasks, startup employees often must wear many hats. In addition, startups usually have a flatter organizational structure over a hierarchical one. Their multifaceted job descriptions coupled with a short chain of command could earn them a seat at the decision-making table, but that’s not always the case. Employees expressing frustration that they don’t have the chance to contribute to decisions and have their voices heard can be a sign that the culture at your startup isn’t one of collaboration.
How to Improve Your Tech Startup Culture
The above challenges aren’t the only warning signs of a negative culture, but they are some of the most visible. If you’ve noticed even just one of these, it might be time for a culture correction. Here a few culture must-haves that every tech startup could consider:
Set core values. Core values serve as a central point of connection and guidance when collaborating and making decisions. They also inform how employees should treat others and how they can expect to be treated by peers and superiors. Without the presence of core values to positively influence these dynamics, company culture may suffer.
Hire the right people. You can’t build a great culture with people who don’t support it. Make sure you dedicate a portion of the interview process to assessing a candidate’s cultural fit. Do their values align with those you set for the company? Are they going to help you create a collaborative, flexible, and positive work environment? Give them time to ask questions. Do they have feedback or thoughts when you outline your culture and values? Don’t sabotage your goals by hiring employees who are likely to cause disruption.
Provide professional development opportunities. Tech companies can provide space for employees to grow in various jobs because of the ever-evolving nature of the industry. It’s a good option (for both business and culture) to provide access to a variety of training, certifications, and classes. Your employees will stay up to date on the latest industry trends and technology, and professional development will become a key part of your culture.
Practice flexibility. In the age of remote and hybrid work models, some workers have become resistant to rigid in-office schedules and requirements. Providing flexible work options demonstrates that you trust your employees and respect their leadership and autonomy. Understand what’s right for your industry and for your team and implement what works best for you and your talent.
Build a Positive Culture
It can be hard for startup leaders to think strategically about culture, but it’s important to remember that a toxic, negative, or even a lackluster work environment can lead to consequences, any of which can harm your company, your success, and your people. Now’s the time to start building a positive culture at your tech startup and give you a competitive hiring edge.
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