A poor company culture may be costing you more than you realize.

Many companies, when faced with the need to reduce costs, consider several cost-cutting measures. Some companies may focus on cutting energy costs, reducing spoilage and minimizing downtime. Others may attempt to clamp down on stationery and other office supplies. And still others may take aim at discretionary spending. (say “buh-bye” to free gym membership and the company’s snack cupboard.)

All of the above-mentioned cost-cutting initiatives may produce results, but there is another pesky “cost gremlin” that many companies, unfortunately, ignore. This gremlin is sometimes difficult to spot because it doesn’t necessarily show up as an expense line item on a company’s financial statements. Nevertheless, it can easily gnaw away at a company’s bottom line. That gremlin is the not-so-small matter of company culture.

Blueprint Creative recently teamed up with Antilles Economics, an insights consulting firm to conduct a Barbados Employer Branding Surveywhich was designed to uncover insights that business leaders can use to better manage their businesses. One of the insights uncovered was that Barbadian companies with poor company cultures may be facing higher-than-average operating costs when compared to their counterparts with engaged company cultures. Here’s why:

  • Higher labor costs

Companies with poor company culture are more likely to have higher labor costs than companies with engaged cultures. This is because the market tends to impose a ‘culture tax’ on companies with poor cultures. When participants of the Barbados Employer Branding Survey were asked whether they would leave their current job to work for an employer with a poor corporate culture if they could earn a higher salary, only 19.6%of respondents responded in the affirmative. Of those that were willing to leave their jobs and work at a company with a worse corporate culture, when asked “what is the absolute minimum salary increase you would require?”, 7.4%required a raise of at least 5%.30.9%required a 10%raise. An additional 61.7% required an increase of 25% or more. So, yes. If you do have a hostile work environment, you may be able to entice some individuals to work at your organization, but you’ll likely have to pay a steep price which will manifest itself as higher labor costs than your competitors with more engaged cultures.


  • Higher recruitment costs

The survey revealed even more bad news for companies with poor cultures. When asked “Would you leave your current job for the samesalary if your new organisation had a better culture?”, 66.9%said “yes.” Some respondents were even willing to take a pay cut in order to work at a company with a better culture. When asked, “Would you leave your current job for a lowersalary if your new organization had a better culture?”, 32.9% responded in the affirmative. These results suggest that companies with poor cultures are more likely to face a revolving door of talent when its employees take the opportunity to work for companies with better cultures. As a result, companies with poor cultures are likely to spend more money on expenses such as on vacancy ads and are also more likely to spend more time interviewing and selecting new employees for the posts left vacant by former employees.

  • Compromised reputation

Companies with poor cultures may also be taking a hit when it comes to intangibles such as the quality of their products and services. This is because as talented, “in-demand” employees leave companies with poor cultures, these organizations may be forced to rely on a pool of less-qualified, less experienced workers. These individuals are more likely to deliver shoddy workmanship and poor customer service, resulting in a tarnished reputation for their employers.

Fortunately, if you think that your company culture is having a negative impact on your profitability, there are steps that you can take to address the problem. Have a frank conversation with your HR Manager about your concerns, and work together to put forward a plan to develop a culture of openness, trust and respect across your organization. If you don’t have an HR Manager on board, you can reach out to an HR consultant with experience in helping companies improve their cultures. You can also bring a branding agency on board to help develop an internal communications program that complements your shiny new HR initiatives.