Many factors go into a hiring decision. For instance, human resources personnel and hiring managers often consider applicants’ work experience, hard skills, and soft skills. In recent years, the importance of whether or not a candidate fits the company culture has become even more apparent, too. In fact, some businesses have begun to give cultural fit equal weight with other attributes or even prioritize it. What exactly is it, though, and why is it important in a small business?
Defining Cultural Fit as It Relates to a Small Business
In a nutshell, cultural fit is how well an employee’s mentality and behavior line up with the particular values and culture of your business. Unfortunately, businesses don’t always have a handle on what the company culture is truly like in their company. One scenario is when, on paper, the business espouses a philosophy of letting its employees be as independent as possible. In practice, team leaders micromanage the employees. So, companies big and small are not always in tune with the culture in the business.
Now, a small business may pride itself on its family-oriented company culture, particularly if it is a family-owned business. Or it may tout itself as lean and determined. It may emphasize that its employees need to be able to make quick, good decisions, or it may explain that its employees need to be well-versed in carrying out orders. Some small businesses, however, don’t fully understand what culture fit is and why it’s important. When they do hiring, they don’t consider that aspect of applicants’ profiles, and that’s a big mistake.
Defining Company Culture for Small Businesses
What is company culture? It’s the set of values, beliefs and behaviors that are shared by employees within an organization. These can be formal or informal, but they all have one thing in common: They help to shape how people behave at work.
The tone for how your company interacts with clients, suppliers and customers is set by a positive company culture. Having a well-defined company culture helps expose your company to better opportunities as you grow, because it helps attract the right talent, client, and reputation for your organization.
Company Culture Is Amplified in a Small Business
From our experience, we’ve seen that practically everything is amplified in a small business. That is a major reason why hiring for culture fit is critical. There are fewer employees and fewer channels of communication. More direct contact takes place between customers/clients and every employee in the business. If something goes wrong, it’s liable to go wrong on a bigger scale.
Indeed, just one “bad” hire can do horrendous damage to a small business. The damage need not be anything as direct as an employee angering an important client, although that can and does happen. Rather, it can be indirect and build up to a devastating level over time.
Consider the following:
Someone who doesn’t fit with the company culture of the business is hired. Let’s say this person resents following a 9-5 workday at a traditional business and doesn’t really follow the dress code.
This person’s attitude affects the morale of the other employees, who bristle at the new hire who comes in late, leaves early, and wears jeans and T-shirts. Employees’ productivity and morale drops.
Now, there is absolutely nothing wrong with a business that lets its employees set their own hours as long as they get their work done and to dress as they see fit. However, not every business is like this. Suppose you’re a business such as a retail store that needs employees to come in on time, leave on time, and follow a certain dress code. Your employees need to be able to understand and follow the values of your business.
Limited Space to Experiment
A small business doesn’t have as much room as a larger business to navigate and make mistakes. So, it’s worth investing additional resources and time to find a proper cultural match. In a larger business, someone who is a bad culture fit might affect the morale of the immediate team members, but that may be where the ripple effects stop. In a small business, potentially everyone in the company could be affected.
The Ripple Effects of Negative Cultural Fits
Earlier, we touched on a few ways in which bad culture can affect the business. Here’s a bulleted list that outlines a more extensive list of examples.
- Bad work quality
- Lowered productivity
- Lowered job satisfaction
- Decreased morale
- Poisonous work environment
- Higher employee turnover
- Stressed, possibly resentful employees
- Decreased profits
- Fewer clients or customers
Say that Bob and Jane see their co-worker at a small independent bookstore constantly arrive late and leave early. He calls in sick often and shows up in T-shirts and jeans. He kind of ignores the store’s customers. Bob or Jane (maybe both) may begin to question why they’re even bothering to be productive employees when this guy does what he wants and gets paid the same as them. They resent the employee and begin to think less of their boss for hiring this person. Bob or Jane leave the position, and the search must begin anew for another employee.
Even if your business is laid-back, a poor culture fit can still be harmful. Take a business that encourages employees to wear T-shirts and jeans and to come into the office whenever. A new employee is hired who checks off all the hard skills on paper. Everyone’s excited, but problems may arise quickly if this employee prefers a traditional way of working. For instance, the employee may not mesh with other team members and lose motivation to work. It’s costly to keep an unproductive worker around, and if that worker leaves, to go through another hiring process.
Diversity Is Important
You can still have diversity in your small business while hiring for cultural fit. Actually, having a diverse workforce can help your business become quite successful. We want to emphasize that a cultural match does not equal hiring people from the same backgrounds and with similar experiences.
Nailing Down the Right Cultural Fit
To be sure, business culture can be tough to nail down. Since it’s important that everyone in the business align with its values, how can a business succeed if half of the employees are creative thinkers and half are more rigid thinkers? It’s because culture goes deeper than that. What type of thinker you are matters less than attributes such as self-awareness and ability to collaborate effectively. So, a business filled with employees who practice different methods of thinking/approaching problems can still be extremely profitable. These employees just have to align with a company culture of, say, respect, and collaboration. Having diversity in your business is an excellent thing, but the culture fit still needs to be there.
On the most basic and practical level, the right employees matter for small businesses because they don’t have as much time and resources to spend on hiring. When you hire the right type of person, you hopefully won’t be hiring all over again in a few months when that person or other employees leave. On a deeper level, making several poor hires for culture (or even just one bad hire) may lead to a toxic work environment and hurt the bottom line of your business. If the business keeps hiring people who don’t work out, there may be a mismatch between the perceived (“on paper”) culture and the actual culture. Alternatively, hiring processes may need to be changed, and the people doing the hiring should become more aware of cultural issues.
To understand if an applicant will be a good match for your business before they’re hired, learn how Sprockets’ Applicant Matching System can help.