How Does Employee Culture Affect Retention?

by Extension Engine | September 8, 2022

Estimated time to read: minutes

Recent studies have found that toxic work culture is the number one reason people leave their jobs. With increasing inflation, profits have gone down, so it might be impossible for smaller companies to issue much of a pay raise. Without even the offset of financial compensation, losing staff due to a negative employee culture could seem inevitable. 

But toxic work culture is completely preventable, and it’s everyone’s responsibility to prevent it. Employee culture shapes the workplace, and the workplace affects every other aspect of a business.

In this article, we’ll discuss employee culture and how it affects retention. We’ll also give tips on how to create a positive employee culture.

Mission Statements

Having a particular employee culture within the workplace is normal. Nothing happens in a vacuum, and coworkers interact with each other all day. But, as a leader in the organization, the shape of those interactions is largely up to leadership.

The best way to shape company culture is to get in front of it. Start by writing a mission statement — a record of the aims and values of your organization.

An effective mission statement lets employees know what to expect and what’s expected of them.


Employee culture often starts with a set of goals and expectations, but it doesn’t end there. Company culture must be promoted consistently, and employees need to be able to voice their concerns and grievances or simply ask for help.

At its core, employee culture is based on communication. If employees are comfortable talking to each other and their leadership, ideas flourish. An open corporate culture also discourages bullying and helps boost employee retention rates.

Careful Hiring Practices

You, as the manager, can do a lot to promote a positive employee culture. But some of it is in employees’ hands. Notably, in a 2021 survey, roughly 30% of workers experienced bullying in their place of employment.

Most people who have experienced workplace bullying report that the bully was their boss or another superior. However, a significant portion of bullying is done by coworkers, who perhaps spread harmful gossip or undermine someone’s efforts in the company.

The good news is that, as the boss, you can do something about workplace bullying, regardless of who is experiencing it. Start with your hiring and firing practices. For example, some employers “hire slow and fire quick,” because that gives them time to find the best candidate and allows for swift termination if a new hire starts causing trouble.

Employee Culture and Retention

Employee retention is a major issue (especially with the current state of the economy). Yet there are ways to increase retention, and fostering a positive employee culture is one of them.

We’ve covered a few ways to improve employee culture, but there’s always more to discover. To learn more about running a business, please visit our website. Training employees is another great way to reinforce culture and increase retention, and we can offer tips on how to design a training course.

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