It is widely accepted that a strong and cohesive company culture is the key to success. Forbes reported that businesses with strong cultures had a 4x increase in revenue growth and 96% of HR leaders are now prioritising cultural fit, according to a survey by ThriveMap. Yet, just over three-quarters (77%) of companies admitted to using gut feeling when assessing candidates for roles.
“For decades the HR hiring manager was the best People Analytics capability companies had. They worked without any data backup, operated based on a gut feeling and what had come before. Gut feeling is brilliant but it is the imperfect and human equivalent of processing lots of data and coming to a conclusion. Except….if that hiring manager has a bad day it will affect who’s going to get hired.” Our Chief Scientific Officer, Dr Boris Altemeyer, reveals. Until recently there weren’t any People Analytics platforms like Cognisess Pro which could consistently, reliably and scientifically identify candidates whose values would match a company’s culture. Recruiting solely on gut feeling can be risky, with no concrete data to backup hiring decisions it can be hard to ensure which new hires would enrich the cultural fabric of an organisation – rather than dilute or disrupt it. With culture fit becoming such an important factor within HR performance, should companies be taking this gamble?
The disadvantages of hiring a poor cultural fit within a company
- Higher employee churn. If an employee’s values clash with the businesses culture, they may start seeking a new role elsewhere. A study by Columbia University uncovered that the likelihood of job turnover in companies with poor cultures is 48%, compared to businesses with a strong company culture (13%).
- Reduced job performance. If an employee doesn’t feel comfortable in an organisation they won’t perform at their best. Meta analysis by Kristof-Brown found that employees who fit in with their company, coworkers and managers perform better in their job.
- Employees are less engaged in their role. Gallup reported that 63% of employees aren’t engaged in their role. With disengaged employees costing U.S companies nearly $550 billion a year, this is a costly issue. In contrast, the meta analysis by Kristof-Brown also found that employees who relate to their company culture are satisfied in their role. Hiring people who will engage and thrive in a company culture will reduce costs long term.
How People Analytics is harnessing data to provide organisational and cultural insight
Until recently there have been limited tools for HR to match potential talent to their company’s prevailing culture and prevent an unsuitable organisational hire. Traditional testing methods, such as psychometric testing, give limited insight into whether an applicant would thrive or struggle in a company’s environment.
They also don’t factor in potentially different cultural dynamics across departments. These can be subtle, so they can be difficult to calibrate and quantify. But it is vital to identify and understand them, as an employee who thrives in one department may not necessarily fit into another. Factoring in these ‘subcultures’ will help companies make better hiring decisions.
Cognisess Pro’s Culture Fit tool is able to identify any potential cultural differences between departments, as well as the overarching company culture. For example, clients Knight Frank, the UK’s leading independent real estate consultancy, recently utilised this tool. Our People Analytics software was able to accurately distinguish the slight differences between their commercial and residential departments, such as comparing their task switching abilities, alongside analysing the dynamics their strong overall company culture.
What is Culture Fit and how does it work?
Our Culture Fit tool is one of many specific talent assessment tools on our Cognisess Pro Platform. It is currently used by companies such as AB InBev, the world’s leading brewer, to measure and benchmark the cultural values of their organisation throughout the world. This provides internal insights that can inform HR hiring decisions as we as other organisation design tasks.
Firstly, existing employees complete our Culture Fit survey on our platform. This allows us to map how an organisation’s cultural values are internally understood and lived. These results provide a benchmark for our science team who analyse this survey data and then build a specialised set of culture assessments for the company – this is used during the recruitment process to assess applicants against the core values identified in the employee’s survey results. It is worth stressing that the cultural profile created for a client is bespoke to the culture of their organisation. It is not based on a generalised or standardised set of cultural norms. This assessment set is used alongside our other cognitive, emotional intelligence and personality assessments in the recruitment process – as may be relevant to particular functions or job roles. As a result of applying this tool, AB InBev was not only able to identify whether a candidate was suitable for a specific role but had a clear insight into the probability of them thriving in their unique company culture.
For more information watch our Chief Scientific Officer, Dr Boris Altemeyer, explaining the tool.
There are many disadvantages of hiring candidates who are a poor culture fit for a company. But, by using our Culture Fit tool recruiters can identify the strongest culture fits in the candidate pool. If you would like to try our Culture Fit tool book a FREE demo today.