In past columns, I have stressed the importance of developing a positive workplace culture. Positive workplace cultures result from shared values, norms and behaviors. Employers create favorable cultures through honest and transparent leadership that leads by example, emphasizes open communication, shows regard for employee well-being, promotes civil behavior in the workplace, etc.
A positive organizational culture helps attract and retain talent and promotes employee engagement. According to a recent report published by the Society for Human Resource Management (SHRM), workers in positive organizational cultures are almost four times more likely to stay with their current employer. However, employers are significantly more likely to perceive their organization’s culture as favorable than their employees. According to SHRM’s study, in the U.S. only 61 percent of employees rate their culture as good or excellent.
But having a good or excellent culture does not mean that employees will not engage in turnover. According to SHRM’s analysis, employees in organizations with good to excellent cultures tend to seek employment opportunities elsewhere for the following reasons:
- Inadequate pay
- Insufficient opportunities for career growth and upward mobility
- Lack of opportunity for learning and professional development
- Inadequate benefits, e.g., retirement, medical, dental or other
- Lack of workplace flexibility
Pay raises have decreased over the past year and will likely remain low in 2025, averaging a projected 3.5 percent. In 2024, it has been reported that four in ten workers did not receive a pay increase. Healthcare costs are expected to rise 8.7 percent in 2025, meaning that employees will likely see increases in their medical plan premiums, and perhaps, deductibles and copayments. As a result, according to BambooHR, one-third of employees (33 percent) feel negatively about their current financial remuneration — a jump from 23 percent last year — and 50 percent of employees feel they struggle to make ends meet due to rising costs. These changes will result in company turnover, even among those with positive cultures, as the job market improves and employees try to improve their financial position.
The lack of opportunity for learning, professional development, career growth and upward mobility will have a similar impact. In 2024, 24 percent of respondents sought to leave an organization with a positive workplace culture because of insufficient learning and professional development opportunities. This was especially true among Gen-Z and millennial employees.
These situations, left unaddressed, will lead to challenges for even the best-run organizations, whether they are restaurants, manufacturing facilities or hotels. The level of job growth expected in 2025 and the current labor shortage will keep the demand for workers high. Therefore, it is important for employers to allocate their resources effectively in these two areas to minimize the likelihood of turnover of valued employees in 2025.
