Culture fit has become a top hiring priority for many companies. It is based on the idea that employing like-minded individuals who embrace the organization’s culture, values, and goals will produce the most successful and efficient teams. According to recent studies, more than 80 percent of employers prefer hiring based on culture fit. And, terminating an employee due to a poor culture fit can cost up to 2.5x the base salary. So what does culture fit really mean, and why is it so important for the ultimate success of your organization?
Organizational psychology guru Adrian Furnham defined cultural fit as “a fit where there is congruence between the norms and values of the organization and those of the person.” (“The Psychology of Behaviour at Work”, 2nd Edition). A good cultural fit is associated with many benefits, including greater job satisfaction, better performance, improved employee well-being, higher retention rates, and stronger strategic alignment. Here is why:
1. Greater Job Satisfaction
In a sense, corporate culture fit is the glue that holds companies together. By providing a list of important characteristics, employers can ensure a high likelihood for the new hire to successfully adapt to the company’s core values and beliefs. Alignment with the corporate culture helps individuals achieve their professional and personal goals, leading to a greater job satisfaction and happier life.
2. Better Performance
The most productive teams achieve outstanding results because employees enjoy working together in a shared commitment of getting the job done right. If company procedures and processes provide support for achieving extraordinary results, a good culture fit will help to ensure better performance and higher productivity for everyone involved.
3. Improved Mental and Physical Health
Studies show that a great culture fit and a positive work environment promote good physical and mental health. In other words, if a company's culture fits an employee’s personality, he or she is less likely to exhibit daily signs of fatigue, anxiety, and depression. As a result, we have a healthy employee with a strong sense of self-worth!
4. Higher Employee Retention
Organizations with good culture fit benefit from having a happier and more productive staff who stays with the company longer and who is willing to work harder to achieve great results. The General Social Survey (GSS) that collects demographic and psychographic data on all US residents revealed that individuals who mesh well with the organizational culture are less likely to leave their jobs.
5. Stronger Strategic Alignment
Truly successful companies are able to align culture with their business strategy by pulling the functional parts together with a common purpose and holding them accountable. The likelihood of achieving this alignment largely depends on how well individuals fit in with the rest of the organization, as well as how willing they are to work together toward achieving the common goal.
Employees who are hired based on culture fit tend to be more productive than those who don’t share the values of an organization. They tend to be happier with their jobs and stay with the company longer.
The bottom line: if the company and an employee don’t get along, employees go elsewhere to find a better fit.
Cultural fit is difficult to assess, as it largely depends on a candidate’s compatibility with the organization’s values and the way it operates. Subscribe to our blog to learn more about different ways that will help you hire ideal candidates based on culture fit.