Happier Employees and Fewer Risks: The Power of Culture Audits

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Any manager or business owner knows that the success of an organization rests not only on a sound business plan that is executed well, but also upon a strong workplace culture that is actively cultivated.

As an employment lawyer with years of experience navigating the intricacies of workplace dynamics, I have witnessed firsthand the profound impact that a positive culture can have on an organization's workers, bottom line, and reputation. I can also (easily) determine what kind of culture your business has—and what can make it better.

A Positive Workplace Culture Makes All the Difference

The importance and benefits of a positive workplace culture simply cannot be overstated. Employees report that a positive workplace culture is of even greater importance than salary level. Study after study has confirmed that employees who work in a positive environment trust their managers and peers, feel secure in their jobs, and are willing to put in extra hours at work when needed. As a result, these businesses consistently outperform their counterparts that have weaker cultures.

I have also seen the detrimental consequences of allowing toxic behaviors to fester unchecked at work: distracted, insecure employees operate with a kill-or-be-killed mentality, often feel trapped in their workplace, and are simply checking the box until another (better) opportunity comes along. Worse yet, this toxicity can foment circumstances that lead to litigation, which can incur legal fees and costly judgements, and also further weaken a culture. Workers are often called upon to gather documents and provide testimony, stealing time away from a business’ operations and productivity—not to mention fueling gossip in the workplace.

But how can a business obtain an objective understanding of the state of its workplace culture? Or effectively measure whether the culture is working well or not working at all? A culture audit is the perfect tool.

What Is a Culture Audit?

A culture audit is a strategic workplace investigation designed to uncover the underlying dynamics of a work environment. It consists of a thorough and thoughtful examination of an organization’s cultural norms, values, and practices.

The objective is first to identify the kind of culture that currently exists in a workplace, then to detect and mitigate risks, and finally to identify ways to enhance productivity and bolster employee morale. Think of it the audit as preventive medicine for your business.

An auditor will gather data on workplace behaviors and beliefs by interacting with its employees through surveys, focus groups, and individual interviews. Auditors might also review company core values, handbooks and policies, and other documentation. On the basis of this data, an auditor can provide the organization with a view into its culture: the positive and negative features, which aspects should be nurtured, areas of opportunity where improvements can be made, and instances in which intervention must definitely occur.

A culture audit empowers employers to act: to address potential workplace issues proactively, instead of being forced to react once something has gone awry in the office.

Culture Audits Mitigate Risk

At a most basic level, culture audits can serve to identify and address legal and compliance liabilities before they escalate into disputes, internal or external reports, or full-blown litigation. An audit can reveal, for instance, employment discrimination, harassment, or retaliation, be it a systemic issue or a particular interpersonal problem. They commonly uncover organization- or department-wide communication challenges that lead to misunderstandings and conflict.

Further, culture audits sometimes help expose compliance-related concerns related to workplace safety, workplace data reporting, and financial practices. As a result of a culture investigation, teams often become aware of deficiencies in following certain policies or implementing proper workforce training.

The positive result of a culture audit is that employers are able to proactively address and mitigate issues through reassessing its policies, engaging in employee and supervisor training, or conducting executive coaching, among other remedies.

Culture Audits Improve Engagement and Retention

A poor workplace culture shifts an employee’s focus from their work to surviving the environment, and they are less productive as a result. Or they might leave altogether. According to a 2023 Talent Retention Report published by iHire (a workforce platform for employers and employees), a plurality of respondents—35.7%—attributed their voluntary resignation to a toxic or negative work environment. The next largest group of resignees (28.9%) said that a difficult manager was to blame. These resignations, and the related costs of worker replacement, could have been prevented if the underlying issues were identified and addressed through a culture audit.

Owners and management teams are commonly unaware of what employees really think about their workplaces. A culture audit can take the temperature of your workforce and help you understand an employee’s experience: Do employees feel valued and supported? Are they appropriately challenged or overly burdened by their work? Are processes and policies making sense in action? Do workers understand personnel policies and are they regularly trained on implementing them? Do employees believe that they have room to grow and advance in your organization?

Asking these critical questions and acting on the answers will allow leaders to make informed decisions that promote cultural alignment and enhance employee satisfaction. By making workers’ day-to-day experience better, they are more likely to become and remain engaged in their work, driving business performance.

Moreover, employees of a company that cares to conduct culture audits are less likely to leave the organization out of frustration or feeling unseen, thereby increasing talent retention and reducing the high costs of employee turnover. In fact, culture audits can even be used in recruitment and hiring to showcase the company’s genuine interest in its employees’ experience and continuous improvement, helping the organization attract top talent that is aligned with its values from the start.

Even the simple act of inquiring about the employee experience and genuinely listening to them helps them to feel valued. It provides a sense of agency and participation, as their input becomes part of what drives culture and change in the company.

Culture Audits Show Commitment to Improvement and Innovation

Cultures evolve in response to internal and external factors. Events like growth, changes in leadership, changes in clientele, or regulation can all impact a work culture. Conducting culture audits regularly can help a business remain committed to improvement and innovation.

Soliciting feedback from all employees allows an organization to tap into diverse perspectives and harness the collective intelligence of their workforce to drive growth. Culture audits can also prompt employees to provide insights and recommendations for enhanced innovation and creativity. Maybe a lower-level employee outside of R&D has a great idea for how to bring a product to market; or another employee who would not regularly be engaged on questions of software selection knows of a great tool to support increased collaboration. Especially in organizations where there are not existing channels that naturally allow for such insights to be brought to the fore, a culture audit can help get them in front of management’s eyes.

Culture Audits Can Improve Your Brand

Consumers are increasingly making market choices based not only on price and quality, but upon the reputation of the business from which they are obtaining goods or services. Purchasers want to know that their dollars are supporting a company that treats its employees well, financially and interpersonally. Listening to employee voices through a culture audit must be part of this effort.

Additionally, activities such as conducting an audit that seeks to foster a more positive workplace culture can also ultimately mean happier employees, which will only serve to improve your customer’s experience. And customer experience is everything: an overwhelming majority of consumers want to buy from entities that treat them wellin the sales process, and report that a positive experience with your employees is more influential than good advertising.

Employees are selecting employers on the same basis. News travels quickly of the salacious details of a toxic workplace, and they are always fodder for headlines and public scrutiny. Consumers and potential employees alike care now, more than ever, about ensuring they are not unwittingly complicit in behaviors that do not align with their own personal values.

A business with socially responsible practices and an inclusive work environment will win out over one that has unfair labor practices, marked by discrimination and harassment, or a lack of focus on social responsibility. Culture audits can play a key role in positioning an organizational culture to attract both customers and top talent.

Regardless of your business or industry, a culture audit is a vehicle that allows a business to prioritize a positive workplace culture as a feature of its overall organizational strategy, and help ensure that it remains agile, compliant and competitive in our ever-changing landscape.