5 Metrics to Track the ROI of Company Culture
Startup culture. It’s that concept that your investors say you need just a little more of, yet criticize you for not working hard enough when you take your team out for fun team building activities. All jokes aside, culture is important. Just like sales, marketing, and a great leadership team are needed to start and grow a company, a great culture is needed to scale it.
The problem here is that unlike revenue numbers or a growth percentage, the ROI of culture is not easily measurable, which makes it potentially challenging to get it the love it deserves (bigger budget) from the higher ups. When trying to convince your boss (or yourself if you’re the boss), to spend more on team activities to build the culture, here are a few metrics to look at.
5 Metrics to Track Culture
If an employee likes where they work, they are likely going to convince their friends to work there too. On the flip side, if they hate the job, they’ll most likely make sure their friends stay far away. So, take a look at your numbers. Are all your applicants coming in cold? If so, it may be time to re-invest back into your people.
Social Love ❤
On the same note as above, if your employees love the place they work, they are going to tell the world. When you give an engineer (let’s call her Susan) 3 furry little puppies simply because it was Tuesday, you bet she posted that online. Then 140 of her connections see the name of your company, and 20%+ clicked through to learn more about you. You know what we call that? Free advertising. But it’s better because it’s advertising in result from employees loving their job.
This is going to be a bit controversial, especially for those startup CEO’s reading this, but this is a core metric to check. You should have a fairly empty office by 5:30 pm on most days in a week. Every day, check your office around 5:30 pm. Out of those days, is it normal to still see the office fairly full? Does it vary? Is the office often more empty? If it’s the latter, then you might have a strong culture with a solid work-life balance, where people can live their lives outside of work and not feel pressured to “hustle” a few more hours every day.
I recognize there are some days where that hustle is necessary, like when prepping for a launch or fixing a giant bug in a software. BUT, if the norm, day in and day out, is having employees working until 7:00 pm and neglecting their personal lives, you may have a strong business but a weak culture.
Low Employee Retention
If people aren’t enjoying where they work, they are going to leave. If they like where they work, they are going to stay. It’s really simple, and although this isn’t the most key metric when evaluating the strength of your culture, it is the most key when evaluating ROI. When employees quit, it is expensive. CEO’s need to spend their limited time to source for new candidates, interview, hire, and then train them. This is not cheap, and the best way to deal with this less is to create an environment where people want to stay for a while. The key to high employee retention is high engagement.
Overall Happiness Level
This one takes some emotional intelligence to determine, but is your company generally happy? Do people have smiles on their faces when walking in and do they stick around for lunch to hang out with coworkers, or is this the dreadful job they talk about every Thursday night at bingo. Ideally, are they doing team activities, like Thursday night bingo, with their coworkers? This is one where you need to be honest with yourself. If that is challenging, there is a good solution here. Talk to 10 employees a day and see how they are doing. Are they happy? If not, your company culture could be a small reason.
At the end of the day, these employees put a lot on the line to work for the companies they work for. They deserve an awesome company culture to enjoy every weekday. Use these metrics to see if you have a great company culture. If you do, keep it up! If not, try starting with some fun team building activities to get the ball rolling.