Why is workplace culture on the decline?

Embedding culture within an organisation is proving to be a constant challenge for HR leaders across Australia.

HR Leader recently spoke to Neal Woolrich, a director in the human resources advisory team at Gartner, about the declining rates of workplace culture across Australian organisations. Woolrich touched on a combination of factors that could be driving the decline.

“Workplace culture is declining due to a combination of factors affecting the three key segments of our workforces – leaders, managers and employees. An overwhelming number of HR leaders we’ve spoken with recently have reported managers as the top challenge in embedding culture within their organisation.

“This is due to managers lacking the skills or resources to drive cultural change within their teams, as well as not enforcing the culture they want,” said Woolrich.

“Of course, it’s not fair to place the blame solely on managers, given they are already feeling overwhelmed by the expansion of their responsibilities. Many simply aren’t equipped to lead change.”

Woolrich explained that employees oftentimes have trouble connecting to an organisation and workplace – misunderstanding the culture that is already established.

“Employees also struggle to connect with organisational culture. Many don’t know the kind of culture their company wants to have, or they are unsure of what behaviours they need to adopt,” said Woolrich.

“Another challenge is ‘cultural tensions’, when employees need to balance competing values. An example is the tension between speed and quality – we ask our employees to work quickly but not in a way that sacrifices standards.”

“For many leaders, culture is a vague concept, so we need to bring it into their world of hard business metrics. Rather than just saying ‘we’re innovative’, what are the metrics that prove this, such as process cycle times or customer feedback quality?”

The contemporary workplace also creates barriers to fostering workplace culture.

“Overlaying all of this is hybrid work. In the more distributed way of working today, it’s harder for organisations to define and measure the culture they want, while also ensuring the culture is changing for the better,” said Woolrich.

The run-on effect of poor workplace culture can appear across various business intricacies, with employee performance being negatively impacted the most.

“Weak organisational culture is highlighted in many different business and talent metrics. The most obvious findings are related to employee performance and their intent to stay. Both are 25 per cent lower in organisations with weak cultural connectedness compared to those that are strong,” said Woolrich.

“Interestingly, organisations with weak cultures often consistently underperform in revenue goals and reputation.”

Overall, gaining that buy-in from employees when it comes to workplace culture is crucial – or else motivation and engagement can quite easily dwindle.

“It all comes back to employees’ sense of alignment and connectedness. If they aren’t rationally aligned with what the culture should be – in simple terms, ‘how we do things around here’ – then they will struggle to do their job in a way that contributes as effectively as possible to the organisation’s objectives,” said Woolrich.

“If they aren’t emotionally connected, don’t feel surrounded by people like them, or don’t feel part of something bigger than themselves, it is hard to motivate them to go above and beyond or find new ways of doing things better.”

Kace O'Neill

Kace O'Neill is a Graduate Journalist for HR Leader. Kace studied Media Communications and Maori studies at the University of Otago, he has a passion for sports and storytelling.