Even prior to the pandemic, Canadians said they were becoming increasingly unhappy with their organizational culture.
Then COVID-19 took the world by storm and companies were hit with a wave of change far greater than anyone could have anticipated. These ongoing changes, which included extensive lockdowns and an extended period of working remotely, have further eroded many company cultures and left some employees feeling disconnected. Many people are finding it increasingly challenging to collaborate, a vital part of solving tough business problems. Even worse, we’re seeing high levels of burnout and more short-term leaves and resignations, all of which are impacting productivity and engagement. At the same time, the war on talent is heating up, making it harder to replace top talent.
In Canada, we’ve experienced some of the most extensive lockdown restrictions in North America and extended periods of remote work. According to our Global Culture Survey 2021, these factors hit Canadian work cultures harder than our neighbours to the south. When asked about how their organization helps their people successfully adapt to change, 61% of Canadian respondents—versus 67% of Americans—feel their work culture enables successful internal change initiatives, like those needed to respond to COVID-19.
This has left many Canadians feeling drained and anxious about the ongoing uncertainty, as they navigate work environments that, in many cases, look and feel drastically different than they did two years ago.
What’s more interesting, and concerning, is the growing divide between how senior leaders and employees view culture. In Canada, 63% of senior leaders believe they have a distinctive culture that sets them apart from their competitors, whereas only 41% of employees (defined as those below management level) share this belief.
Employees seem to be losing trust that their organizations will be flexible enough to meet the demands of the new working world, and we’re seeing the fallout. Many are leaving for organizations with cultures that are more aligned with their values and our new reality.
leaders are walking the talk;
leaders are actively engaging employees for their feedback and acting on it; and
incentives and benefits are being adapted in support of our new reality.
When optimized, these critical cultural attributes can help employers attract and retain top talent and maximize their organization’s potential.
Leadership table stakes: Leaders need to make sure they’re focused on providing feedback and coaching, establishing networks for and regularly communicating with employees, offering opportunities for training and development, and giving employees access to the right collaborative technology. These have become table stakes.
Only 58% of Canadian respondents agree their senior leaders set the tone from the top, compared to a striking 73% in the United States, where as we know, lockdown restrictions haven’t been as rigorous. Furthermore, only 56% of Canadians agree their leaders consistently act as role models for their organization’s purpose, values and culture, compared with 65% in the United States and 60% globally.
Now more than ever, senior leaders need to have both a clear and compelling vision and walk the talk. Canadians want to see their companies’ leaders follow through on their commitments to their people. They want to see their leaders setting a clear path towards building trust by giving their people a shared sense of purpose, while also making sure they feel valued, connected and visibly supported.
Only 56% of Canadians agree their leaders consistently act as role models for their organization’s purpose, values and culture, compared with 65% in the United States and 60% globally.
Fewer than a third (31%) of Canadian employees polled (again, defined as those below management level) believe their organizations are gathering and acting on employee feedback. In fact, health and safety is one of the top organizational aspects flagged as needing improvement by Canadian managers and employees, while it’s one of the lowest priorities for senior leaders.
Something we can all agree on: It’s unanimous. Canadian senior leaders and employees agree that recruiting and retaining talent is a top priority.
It’s clear that there’s a significant opportunity for leaders to better understand and align with their employees’ needs, priorities and concerns. Doing this will demonstrate care and a willingness to take action on behalf of employees. It will arm leaders with what they need to know, say and do to set the right tone for the path forward, while ensuring alignment between themselves and their employees. People ultimately need to feel heard by and connected with their leaders.
Fewer than half (46%) of Canadian respondents agree their organization adjusts employee incentives, compensation and benefits to help their people successfully adapt to change, compared to 59% in the United States. Before the pandemic, in many cases, perks and benefits provided by organizations were table stakes. But now, employees are looking for benefits that foster a shared sense of community, make their lives easier and show that leaders care. Employees are hungry for their organizations and leaders to provide incentives and benefits that fit with their new realities.
The world has changed, and so have the needs of our organizations and people—and our incentives need to reflect this new reality. Ask yourself: Does my organization offer the right incentives to create a culture where people feel valued? Answering this question and taking action will send the message that leadership cares and is listening to what employees say matters most.
If you ask, you’ll need to deliver: Leaders need to be prepared to act on feedback if they ask their people about their benefits preferences.
Prioritizing your organizational culture isn’t a nice-to-have—it’s a business imperative that has a direct impact on your bottom line.
Canadian organizations agree that recruiting and retaining talent is one of their biggest opportunity areas, with the highest number of Canadian respondents (31%) including it in their list of organizational aspects to be improved.
Having a culture that’s optimized in support of your vision, strategy and values is directly tied to an organization’s ability to attract and retain talent. This is one way we can quantify the value of culture today. When people feel good about the culture at their organization, it creates stickiness and loyalty: they’ll want to work for and grow with you.
On the other hand, if your culture is suffering and no action is being taken, be prepared to lose the war on talent that’s escalating in major urban centres across Canada. One study estimated that the cost of turnover as a result of workplace culture was more than $223 billion between 2014 and 2019, even before the pandemic put things into overdrive. Add to that the loss of productivity and the impact on your remaining employees, and the dollar value climbs even higher.
One study estimated that the cost of turnover as a result of workplace culture was more than $223 billion between 2014 and 2019, even before the pandemic put things into overdrive.
Organizational culture is—and will continue to be—a critical business differentiator. Now is the time for Canadian companies to walk the talk to keep top talent.
If you want to harness the productivity gains and other benefits of a strong workforce, then culture needs a seat at the table when you’re developing your workforce strategy and operating model. Know your organization’s strengths and focus on a critical few improvement points.
Start asking yourself: Are you taking care of your people? How effective are you and your leaders at walking the talk? How often are you communicating and engaging with your staff?
While changes won’t happen overnight, if you want to hold onto your biggest asset—your people—then it’s time to prioritize culture.
Ready to optimize and evolve your culture, keep your top talent and attract even more? We can help—reach out to start a conversation today.
“Toxic workplace cultures hurt workers and company profits,” Beth Mirza, Society for Human Resource Management, September 25, 2019.
National Solutions Leader & National People & Organization Leader, PwC Canada
Tel: +1 403 509 7578
Partner, National Workforce of the Future Consulting Leader, Toronto, PwC Canada
Tel: +1 416 687 9014
Partner and Leader of the Consulting Group for Quebec, PwC Canada
Tel: +1 514 205 5409
Partner, Management & Organizations, Consulting, PwC Canada
Tel: +1 514 205 5149