What is Organizational Culture and How Does it Impact Hiring?

When you think about your ideal job, you probably aren’t just thinking about your job duties. You might also imagine how you want to feel at work — supported, trusted, and valued. You might think of everything that would make a company a great place to work: a supportive boss, friendly coworkers, transparent executive leadership, growth opportunities, and work-life balance. When you do that, you’re imagining the organizational culture. 

And organizational culture matters: employees are 3.7x more likely to be engaged at work when they feel connected to company culture. That connection also increases retention, with employees 55% less likely to be looking for a new job. Strong company culture is also a hallmark of fast-growing, profitable businesses.  

Understand the connection between company culture and recruiting processes so you can develop hiring strategies that attract and retain the right people for every role. Keep reading to find out why organizational culture has such a big impact on hiring.

What is Organizational Culture?

Every company has organizational culture, which you could also call its atmosphere. It refers to how it feels to work at an organization, what it values most, and even how the company views itself. According to SHRM, company culture is defined by its values, which originate in its beliefs about:

• Human nature: How do the company's interactions with employees, vendors, and clients reveal what it believes about human nature, e.g. that people are inherently good or bad; open to change or rigid; dynamic or reactive?
• Its relationship to its environment: How does the company view itself within its community? 
• Acceptable emotions: What kinds of emotions can be expressed freely and which are discouraged? What kinds of people are successful at your company as a result?
• Effectiveness: How does the company define and measure individual and overall success?

Here are some examples of questions that can help you describe your company culture:

• How does leadership communicate with employees? 
• Is it fast-paced or slow to change? 
• Does your human resources team measure employee engagement? 
• Is there a strict hierarchy culture, where roles and job duties are rigidly defined?
• Is your company active in its local communities? 

For example, at a real estate agency, the organizational culture might be competitive and fast-paced. On the other hand, at a nonprofit, the culture might be collaborative and methodical. Let’s take a look at how this affects the hiring process.

How Organizational Culture Affects Hiring

While company culture has always been a consideration for employees, it’s taken center stage since the onset of the pandemic. We’ve experienced the Great Resignation, a lasting shortage of workers, and now, “quiet quitting,” which Gallup says is mostly made up of people who are “not engaged” at work. 65% of U.S. millennials said culture is more important than salary when job hunting.

Organizational culture impacts employee referrals, the company’s employer reputation, and hiring costs. It determines who will apply to the company’s open positions, who will accept jobs, how long they’ll stay, and how employees talk about it. Culture also determines who is interviewed and hired, whether or not they feel a sense of belonging, and which opportunities they have access to — their entire employee experience. 

In short, organizational culture can make or break recruitment strategy.  If you want a diverse, innovative, collaborative workforce, your organization must cultivate work culture that’s in line with those values.

1. Goes Hand-in-Hand with Employer Brand

Your employer brand should be a reflection of company culture as it exists — not what you want it to be in the future. If you misrepresent company culture, job candidates will find out, whether before or after they’re hired. Either way, you risk losing qualified candidates and new hires, who often spread the word about an unpleasant interview process or bad employment experience.Tip: Ask current employees how they would describe your company culture to see if it’s in line with your employer brand.

2. Determines Efficacy and Efficiency of Recruiting Workflows

Organizational culture sets the stage for how quickly the company can hire new employees and what defines quality of hire. Quality of hire refers to the success of the employee after they’re hired — length of employment, goal achievement, promotions, etc. Companies that operate at a faster pace should be wary of hiring too fast and creating high new employee turnover. Those that hire more slowly are at risk of losing out on great candidates. 

If company culture is fast-paced and decisive, that can result in faster hiring decisions. On the other hand, a lengthier recruiting process can bring in more candidates and potentially a better-fit candidate. Both should keep in mind that their hiring process tells candidates a lot about what to expect from the workplace.Tip: Upgrade or implement recruiting software to increase candidate flow, hire faster, and build a large, qualified talent pool.

3. Attracts Likeminded Candidates

It’s logical that candidates who have similar values, work styles, and attitudes would be attracted to similar corporate cultures. That’s great news for finding candidates who are a cultural fit, especially for organizations with a clan culture, characterized by tight-knit teams and team-building activities. 

But too many culture-fit candidates can result in a homogenous workforce and a lack of innovation. Recruiters and hiring managers should also look for culture adds, candidates whose skills, background, and experience bring something new to the company.Tip: Ensure job descriptions and job interview questions use fair, gender-neutral language. Assemble diverse hiring teams to reduce bias in hiring. Although it’s not formally defined, organizational culture is at the heart of your company. It’s present in how employees interact, how supervisors manage their teams, and how departments work toward company goals. It impacts every part of people management, from recruiting to offboarding, and that’s why recruiters and HR professionals need to understand it. 

Are you looking for ways to strengthen organizational culture and learn more about its impact on hiring? Download our Rapid Recruiting resource bundle and find out what your organization needs to hire the right person for every open role.