Barbadian companies with hostile environments may be paying a “culture tax”.

Barbadian companies with poor working environments may be paying a “culture tax” that has the potential to significantly increase their organisation’s operational expenses. The “tax” is pretty unique when compared to other taxes, because it isn’t imposed by the government, but by the very workers which companies with poor cultures are seeking to entice.

This is one of the insights included in a report entitled “The Employee View of The Employer Brand”, which is being published by Antilles Economics, an insights consulting firm, and Blueprint Creative, one of Barbados’ leading strategic branding agencies. The report compiles several eye-opening insights collected via a survey of employees across multiple sectors across Barbados.

The researchers from Antilles Economics and Blueprint Creative found evidence suggesting that companies with poor cultures are more likely to encounter higher wage bills than their counterparts with better working environments. When participants of the survey were asked if they would leave their current job to work for an employer with a poor corporate culture, 80.4% responded that they wouldn’t. However (and here’s where the “culture tax” comes in), 19.6% of respondents indicated they would leave their current job to work for an employer with a poor corporate culture if they could earn a higher salary.

Of those individuals who were willing to leave their current jobs and work at a company with a poor culture, 30.9% would require a salary increase of at least 10%.  45.7% of respondents indicated that they would need, at a minimum, a 25% increase, while 16% indicated that they would need a pay increase of more than 25% to leave their current job to work for an employer with a poor corporate culture. In other words, the workforce “taxes” companies with poor cultures by demanding higher wages to compensate for the poor culture which they must endure.

The culture tax may also manifest itself in other ways. In addition to facing a potentially higher wage bill imposed by the 19.6% of persons willing to trade a higher salary for a poorer working environment, companies with poor cultures are also more likely to spend more time and money filling vacant positions. This is because of the workforce’s general willingness to leave their current positions and move towards better working conditions, resulting in potentially higher turnover rates for companies with poor cultures.

Commenting on the results of the survey, Renée Newsam, Agency Account Director at Blueprint Creative noted that companies with poor cultures may face a continuous loop of advertising vacant posts, interviewing and selecting new employees, training those new employees, then eventually losing them to competitors with more enviable cultures. In addition, she said, this constant loop may result in low productivity and significant downtime, along with high stress, low morale and excessive workloads for employees who haven’t yet “escaped” to greener career pastures.

Many times, when faced with the need to reduce expenses, companies turn to the “usual suspects” that tend to soak up cash. Some companies seek to reduce costs by eliminating downtime and overtime. Others seek to reduce or completely eliminate discretionary spending.

But as the results of the survey show, companies can also potentially reduce their costs by addressing their company culture and seeking to avoid the “culture tax” imposed by the market. Newsam said that one of the easiest ways to escape the culture tax is to develop an engaged culture where employees can be the “best versions of their work selves”.  She also said that developing an engaged culture doesn’t necessarily have to be an expensive venture, and that many local, regional and international organisations have found ways to improve their cultures even with small available budgets.