Home Recruitment Observing the Effects of Company Culture on Overhead Costs

Observing the Effects of Company Culture on Overhead Costs

by Newsdesk

We often
see company culture as an abstract concept with even more abstract results.
Some might not even understand what the term means. But having a solid company
culture can affect your business in so many ways, from the way you recruit to
how much money you lose and spend on your operation. Bad company cultures
become costly, and unless you correct the situation, things will only get
worse. Let’s take a look at the impact of company culture on overhead costs.
We’ll also take a look at a few ways to cut these through cultural changes.

The Economics of Disengagement

Disengagement
is like a cancer in any company and can start chipping away at its foundation
over time. Disengagement leads to less efficiency and
greater employee turnover. It has been estimated that disengaged employees cost
a business up to a whopping £15 billion per year and that the averaged
disengaged employee costs a company £3,400 for every £10,000 of salary earned.

Rising HR Costs

One of
the areas that will be the most affected by a poor company culture is HR. Every
employee that leaves has to be replaced, which incurs more costs. You have to
post new listings. These listings then have to be pushed so you can attract top
candidates. These will have to be pre-screened and interviewed, and then
trained. The worst is that there is absolutely no guarantee that these people
will stay.

Culture of Waste

Another
way that having a poor company culture can cost you is when it comes to waste.
It has been estimated that the average office worker wastes around 10,000
sheets of paper per year and 500 disposable cups. Multiply that by the number
of employees in the average office tower, and it’s easy to see how these costs
can add up. The worst part is that the measures to reduce these costs would not
only allow them to reduce costs, but could be implemented in a matter of weeks.

Lowering Overheads through a Cultural Shift

A new
culture first has to be drafted laying out its core principles. These have to
be communicated and written down so that all employees, management, and
executives have a single point of reference. This then has to be communicated
in your job listings and become central to your recruiting strategy.

Employees
have to be chosen with the culture in mind first and foremost. Sometimes,
hiring someone who’s dedicated and fits your culture would be a better choice
than someone who’s slightly more qualified who might be trying to use this
position as a springboard.

Reducing
waste should also be a priority. If you notice that waste is part of the
culture in your organisation, you need to change that immediately. Go green.
Not only will you be able to get good PR, but you’ll reduce costs as well. We
also suggest you check out a site like Utility Bidder where you can compare quotes on
green energy from some of the country’s top suppliers at the touch of a button.

Company culture costs companies in more ways than one. The good
news is that this can be corrected if you are ready to commit to change and
have everyone on board.

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