Observing the Effects of Company Culture on Overhead Costs

Let’s take a look at the impact of company culture on overhead costs

We often see company culture as an abstract concept with even more abstract results. Some might not even understand what the term means. But having a solid company culture can affect your business in so many ways, from the way you recruit to how much money you lose and spend on your operation. Bad company cultures become costly, and unless you correct the situation, things will only get worse. Let’s take a look at the impact of company culture on overhead costs. We’ll also take a look at a few ways to cut these through cultural changes.

The Economics of Disengagement

Disengagement is like a cancer in any company and can start chipping away at its foundation over time. Disengagement leads to less efficiency and greater employee turnover. It has been estimated that disengaged employees cost a business up to a whopping £15 billion per year and that the averaged disengaged employee costs a company £3,400 for every £10,000 of salary earned.

Rising HR Costs

One of the areas that will be the most affected by a poor company culture is HR. Every employee that leaves has to be replaced, which incurs more costs. You have to post new listings. These listings then have to be pushed so you can attract top candidates. These will have to be pre-screened and interviewed, and then trained. The worst is that there is absolutely no guarantee that these people will stay.

Culture of Waste

Another way that having a poor company culture can cost you is when it comes to waste. It has been estimated that the average office worker wastes around 10,000 sheets of paper per year and 500 disposable cups. Multiply that by the number of employees in the average office tower, and it’s easy to see how these costs can add up. The worst part is that the measures to reduce these costs would not only allow them to reduce costs, but could be implemented in a matter of weeks.

Lowering Overheads through a Cultural Shift

A new culture first has to be drafted laying out its core principles. These have to be communicated and written down so that all employees, management, and executives have a single point of reference. This then has to be communicated in your job listings and become central to your recruiting strategy.

Employees have to be chosen with the culture in mind first and foremost. Sometimes, hiring someone who’s dedicated and fits your culture would be a better choice than someone who’s slightly more qualified who might be trying to use this position as a springboard.

Reducing waste should also be a priority. If you notice that waste is part of the culture in your organisation, you need to change that immediately. Go green. Not only will you be able to get good PR, but you’ll reduce costs as well. We also suggest you check out a site like Utility Bidder where you can compare quotes on green energy from some of the country’s top suppliers at the touch of a button.

Company culture costs companies in more ways than one. The good news is that this can be corrected if you are ready to commit to change and have everyone on board.

The British Institute of Recruiters is the Professional Body operating The Recruitment Certification Scheme

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