How Culture Overcomes the UK’s Socioeconomic Drama
May 25, 2023

Idea at a glance

Our previous blog went into detail regarding the UK’s current political and socioeconomic position, particularly focusing on how this has impacted the workforce and organisations’ most powerful asset, human capital. Not read it yet? Click here. Culture is now a business imperative and is only set to become more important as the ageing demographic worsens. Culture influences so many aspects of an organisation, but most importantly, it is an absolute necessity for organisations to attract, retain, and maximise talent. This blog will first define organisational culture, as its illusive nature can lead to misunderstandings. Then, it will examine the culture’s impact on attracting and retaining talent and productivity.


What actually is culture?

Many have misconceptions about what culture actually is due to its illusive nature and importance. Deri Latimer illustrates this by stating,

‘I used to believe that culture was “soft” and had little bearing on our bottom line. What I believe today is that our culture has everything to do with our bottom line, now and in the future.’ (Indeed, 2023)

Even academically, culture has a range of definitions; the most appropriate in this context, however, is ‘the shared values and norms of the organisation’s members’ (Lee and Yu, 2004). Practically, it helps to examine Johnson and Scholes’s cultural web, identifying six interrelated elements that help to make up the paradigm:

  1. Stories
  2. Rituals and routines
  3. Symbols
  4. Organisational structure
  5. Control Systems
  6. Power Structures


Culture & Attracting Talent

Culture is key to attracting talent in an increasingly competitive job market. Given the close relationship between culture and brand image, fostering a culture deemed attractive to prospective employees will help enhance your reputation. Glassdoor’s Mission & Culture Survey highlighted the importance of this finding: over 77% of adults across the US, UK, France, and Germany would consider a company’s culture before even applying for a job there, and a further 79% would consider the mission and purpose (beSlick, 2022). There are two core ways that culture attracts talent.

Firstly, a strong culture builds an organisation of employees who act as brand ambassadors. Gallup research has shown that employees with strong connections to the culture show higher levels of engagement, and engaged employees are more likely to refer friends (Dvorak and Pendell, 2018). Importantly, 71% of workers say that they use referrals from current employees of an organisation to learn about job opportunities (Dvorak and Pendell, 2018). Referrals can also lower the cost per hire by reducing the need for external sourcing, speeding up the hiring process, and increasing the quality and fit of candidates (LinkedIn, 2022). Culture is clearly an effective and affordable way to naturally attract talent. Moreover, incentive programmes can be designed to encourage and reward this behaviour.

Secondly, talented people generally want to work for organisations with strong cultures anyway, so not only is it a way to encourage talent, it encourages the best talent. Research has shown that the best talent pays attention to an organisation’s brand, mission, and values, preferring ones that personally resonate and organisations that demonstrate a willingness to develop and invest in their talents (Dvorak and Pendell, 2018).


Culture & Retaining talent

Culture arguably has an even greater impact on retaining talent, with ‘The Culture Economy’ demonstrating that poor company culture costs UK businesses £23.6bn a year in 2018 (Bradley, 2018), partially due to the cost of replacing staff who have left due to poor workplace culture. This is unsurprising given that culture is the second most important factor, behind pay, in deciding whether to stay in their current role or accept a new position.

As Hay’s 2022 report on ‘What Workers Want’ found culture as the second most important factor, behind pay, in deciding whether to stay in their current role or accept a new position (Burt, 2017). It’s unsurprising then that 34% of those who quit their jobs do so because of poor culture (Bradley, 2018). Moreover, just because an employee doesn’t classify their reason as culture does not mean it’s not culture. Looking at another survey that collected the top 30 reasons why people left their jobs, the following were cited regularly (Hughes, 2022):

  • the commute,
  • an outdated workplace,
  • working hours
  • management’s disinterest in staff well-being.

Although culture is not specified once, by referring back to Johnston and Scholes’s cultural web, all of these fall under it. For example, too long a commute is caused by organisational structures not allowing hybrid, remote or flexible working, thereby falling under the cultural web. The real percentage of those who leave may be even higher than 34% due to misunderstandings as to what falls under the remit of culture.

This is not limited to the UK; Blue Beyond Consulting found that 80% of US and Canadian workers said it was important that company values were consistent with their own. Yet only 57% of employees reported that their values did align, with just around half of respondents stating that this misalignment would actually lead them to quit. It’s important to remember that previously it’s been shown that higher-quality talent prioritises values more, so while the percentage willing to quit is small, it could still have a devasting impact. So not even hiring people born across the Atlantic will circumvent the importance of culture.

As discussed above, labour shortages are only set to worsen, increasing the importance of culture; however, the younger generations also place more emphasis on values, diversity, inclusion, and overall culture. Blue Beyond Consulting also identified generational trends, with data signalling that workers under 45 were more likely to quit over company values (Christian, 2022). Similarly, in the UK, Fields Tyler states:

‘Our data was very clear that workers under 45 were more likely to quit over company values. They’re more likely to have grown up in more diverse spaces, and their values are increasingly being reflected in the workplace.’

Given that values are a critical element of culture, with values arguably forming the foundation of corporate culture, it’s clear younger generations will not tolerate the same discrepancies between their values and their organisations. And with it being an employee’s market, they won’t have to. The good news is that small changes have a huge impact. For example, take a look at the power that empowering Gen Z and Millennials has on retention (Deloitte, 2022).

Culture has always been important, but with labour shortages and the increased importance people place on culture and values, especially among the younger generations, an organisation’s ability to retain top talent could be the difference between success and bankruptcy.

Culture & Productivity

Given the UK government’s 2.5% real GDP growth goal and the workforce’s below-average productivity rankings, UK businesses have a large gap to bridge from where we are to where we should be. Moreover, simply hiring more people to make up the difference is no longer an option readily available, so maximising the workforce one currently has is a business imperative. The relationship between culture and productivity is strongly linked, with Todd Davis stating:

‘Strong productivity is the result of many things, but at its foundation is a winning culture.’

The primary link is that when a culture strongly aligns with employees’ values and beliefs, they are more likely to be engaged. Highly engaged employees are 17% more productive than their less engaged counterparts. (Gallup, 2017). Moreover, an employee disengaged from the organisational culture and purpose leads to increased chances of absenteeism. Studies have shown that merely by improving engagement, 81% of absenteeism can be reduced, resulting in a 14% difference in productivity. Not only does poor culture encourage people to miss work where ordinarily they wouldn’t, but it also causes work-related stress and resultant sick days, with HSE finding that work-related stress is the second-greatest cause of lost working days (Liversedge, 2022).

In recent years, more respect has been given to organisations that recognise the importance of the health and well-being of their people. While some business leaders may believe this is out of their scope as employers, research has found that around 40% of the UK’s productivity loss, equivalent to £39bn a year, is due to employees’ unhealthy lifestyle behaviours and poor mental well-being (Vitality, 2021). This is yet another way culture is essential to converting some of this missed productivity; ingraining healthy routines, allowing for organisational structures that promote well-being, and creating an inclusive, purposeful culture that does not trigger or worsen mental health problems are all essential.

Therefore, organisations can harness more productivity by creating a culture with values that align with their employees and integrating health and well-being into the cultural web.


In conclusion, as businesses continue to face labour shortages and fierce competition for top talent, organisational culture has become a point of parity in business. Essentially, this means cultures are no longer a differentiator between organisations but the bare minimum required to compete. The impact of culture on employee engagement, productivity, and overall financial performance cannot be overstated. Companies that prioritise creating a positive, high-performing workplace culture that aligns with their values and mission not only attract the best candidates but also foster a sense of loyalty among their workforce. By investing in culture, organisations can ensure they can attract and retain the human capital required to execute their strategic objectives.

As the old saying goes, if you don’t build your culture, one will form on its own (and you might not like what you get).

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